The State of Michigan developed two investment fund-of-funds totaling $200 million to promote access to a continuum of capital, the 21st Century Investment Fund and Venture Michigan Fund.21st Century Investment Fund The 21st Century Investment Fund provides investments in private equity, venture capital and mezzanine funds, as well as potential co-investments alongside these funds.
Venture Michigan Fund:
The Venture Michigan Fund is a $95 million fund-of-funds. It invests in private equity managers that in turn invest primarily in Michigan-based early-stage companies. Capital for the fund is strictly raised by outside investors. The Michigan Department of Treasury offers those investors up to $200 million of tax voucher certificates to offset any shortfall. Credit Suisse manages the fund.
Accelerator funds facilitate investments in companies at the earliest stages of commercial development. The fund creates a pool of investment capital managed by an experienced venture capitalist or entrepreneur. The Michigan Economic Development Corporation recently contributed to the Michigan Accelerator Fund 1 and Huron River Ventures.
Angel Investors and Seed Venture Capital:
The Small Business Investment Tax Credit encourages angel investors to make investments by granting tax credits. Qualified angel investors contributing a minimum of $20,000 into a qualified small business receive a tax credit equal to 25% of the total investment. The tax credit can be carried over to the next 5 years if it is greater than the taxes paid in that year. The Michigan Pre-Seed Fund supports high-tech start-up companies with early-stage capital as they near commercial viability. Companies developing technologies in advanced automotive, manufacturing and materials, alternative energy, homeland security, defense, information technologies, agriculture and life sciences are eligible for funding.
Michigan Emerging Technologies Fund:
Michigan ETF is designed to expand funding opportunities for Michigan technology-based companies in the federal innovation research and development arena. The MEDC, in partnership with the Michigan Small Business and Technology Center (MI-SBTDC) network, matches federal Small Business Innovation Research and Small Business Technology Transfer Research SBIR/STTR funding opportunities for exceptional research and technical innovation generated in Michigan. The ETF will match 25% of phase 1 SBIR/STTR awards up to $25,000 and 25% of phase 11 SBIR/STTR awards up to $125,000.
Michigan's 15 SmartZones allow municipalities to use tax increment financing for property acquisition infrastructure; business incubators; and other park facilities, management, and marketing. SmartZones are designed to stimulate the growth of technology-based businesses and jobs by aiding in the creation of recognized clusters of new and emerging businesses. The emerging businesses are primarily focused on commercializing ideas, patents, and other opportunities surrounding university or private institute research and development efforts.
Film Production Tax Credit:
A qualified company can receive a refundable Film Production Tax Credit of up to 40% for eligible film or digital media production costs incurred in Michigan. The company must spend at least $50,000 in Michigan to qualify. For Michigan labor and crew, a 40% to 42% credit is available, reducing to 30% for non-resident labor and crew. There is a $2 million salary cap per employee, per production.
Michigan State Contact:
Michigan Economic Development Corporation
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.