Capital firm ready for 2nd fund

Originally posted in Detroit Free Press on January 7, 2010


In another sign of the transformation under way in Michigan’s economy, RPM Ventures, an Ann Arbor venture capital firm, plans to announce today that it has raised $60 million from investors for its second venture capital fund.

The announcement is a welcome boost for the state’s small but growing venture capital industry. Many venture capital firms in Michigan and elsewhere have delayed or canceled plans to form new funds because of the financial crisis and the recession.

RPM is one of four venture capital firms in Michigan that managed to raise new pools of capital this year. The others are Arboretum Ventures, Tgap Ventures and North Coast Technology Investors.

But RPM’s new fund is one of the biggest in the state. The fund has already made 10 investments, two of them in Ann Arbor-based companies Arbor Photonics and Quantum Learning Technologies.

Plans call for eight to 10 additional investments. RPM seeks companies engaged in information technology and the physical sciences, particularly those spun off from promising university research.

“In crisis, there is always opportunity,” said 36-year-old Marc Weiser, RPM’s co-founder and co-managing director.

He and fellow University of Michigan alumnus Tony Grover, 42, started RPM in 2000. Back then their firm was called Waypoint Ventures and they finished raising $10.5 million from family and friends for their first fund four days before Sept. 11, 2001.

This fund has made 16 investments, two of them in former Michigan-based companies Applimation and Mobius Microsystems Inc.

RPM had raised about half of its goal of $60 million when the financial crisis hit last year.

Its second fund has more than 50 investors, including two state-backed investment funds, Dick DeVos’ Windquest Group, Detroit Renaissance’s venture capital fund and venture capitalists in California.

Despite Michigan’s ailing economy, Weiser and Grover say the state has lots of potential.

“A great foundation is being laid,” said Grover, RPM’s co-managing director.