IVCA Feature: New Member Profile of Michigan Capital Network

June 19, 2024

As the new member participants in the Illinois Venture Capital Association (IVCA) keeps expanding, the current membership are given new opportunities for networking, in addition to optimizing support and partnerships, which leads to guidance and new ideas for Venture Capital, Private Equity and support industries.

The latest new member is the Michigan Capital Network (MCN Ventures), a venture capital firm investing out of Fund III and Fund IV in early-stage companies in the life sciences, advanced manufacturing, and software & tech industry segments.

The following is a Q&A profile with MCN Ventures, which explores the firm’s background and their expectations for interacting with the IVCA.

New Member: Michigan Capital Network (MCN Ventures)
Representative: Sapna Patel, Principal

IVCA: What is a brief history of and background of MCN Ventures?

MCN Ventures: In December 2003, Grand Angels was chartered as the first angel investor network in West Michigan with the intention to support budding entrepreneurs, give back to the community, and generate returns for its angel investors. 20 years later, Grand Angels has evolved into Michigan Capital Network (MCN) – an entity consisting of Michigan Capital Network Ventures and an association which manages four angel groups throughout Michigan.

MCN is one of Michigan’s largest and most active early-stage investment group, having invested over $80M in 100+ companies through five venture capital funds and over 70 Special Purpose Entities [“SPEs”]. 

IVCA: Why did the firm decide to join the Illinois Venture Capital Association?

MCN Ventures: MCN believes in the value of having a strong network. We have spent the last couple of decades building relationships with investors, other venture firms, universities, accelerators/incubators, start-ups, economic development groups and more. Many of these groups are based in Illinois and encouraged us to join the IVCA.

Additionally, we are active members of the Michigan Venture Capital Association and have found tremendous benefit from the networking and educational opportunities they provide. We hope to similarly become engrained in the IVCA.

IVCA: Your firm has a range of early-stage company investments for life sciences, ‘advanced’ manufacturing, as well as software and tech industry segments. How did that focus evolve for the film as it developed its funding rounds?

MCN Ventures: MCN invests in three industries – healthcare/life sciences, advanced manufacturing, and software/technology. When our group started investing 20 years ago in Western Michigan, we focused on these industries which we believed were core to the state. Today, the MCN team brings decades of investing and industry experience in these sectors. MCN’s portfolio is evenly allocated across the three industries in order to provide diversification.

IVCA: The firm lists 100+ companies in your portfolio. What characteristics do you consider common when in the consideration of the funding for that group of companies?

MCN Ventures: Our investment thesis remains the same across our three verticals … to target novel technologies that address unmet market needs. Our team puts a heavy emphasis on technology advancement, we look or strong differentiation and barriers through IP/patents. Additionally, as early-stage investors, we need to believe in the start-up team. Having trust and a good relationship with the CEO and executive team is critical for our investments

IVCA: Your firm has a solid Angel Network in Michigan. What is the origin of the development of those four groups, and what is your role in the maintenance of that group?

MCN Ventures: Grand Angels was the initial angel group founded in 2003 in Grand Rapids, Michigan. MCN’s first fund was a pure co-investment, passively managed angel fund that looked for opportunities to invest in the Western Michigan community. MCN’s second fund was started in 2015 as a traditional, actively managed venture fund.

We are currently investing out of our fourth flagship fund and our first opportunity fund. All of these venture funds are managed by MCN Ventures. Through our MCN Association, we now manage four angel networks across the state of Michigan – Grand Angels of Grand Rapids, KaZoo Angels of Kalamazoo, BlueWater Angels of Midland, and Woodward Angels of Detroit.

Many of our angels are also investors in our venture funds. Our venture team also leverages the expertise of our angels – many of whom are successful entrepreneurs, executives, or experts in their respective field – to support our diligence on new deals. We believe being able to leverage the collective knowledge of this 200+ member network is a strong competitive advantage for our venture deals.

IVCA: Of your fund investments by industry, which category is your latest apace, and what have you learned about funding that space that wasn’t as familiar as your other industries and companies?

MCN Ventures: Lately we have been seeing some great deals in the Life Sciences/ Healthcare space. One key learning component for me is that companies in this industry often require substantial venture investments through multiple rounds, over many years as they go through a rigorous regulatory process prior to hitting the market.

For us, this means having great co-investors early on, especially those that know the space. We have partnered with a few funds that have been great about syndicating deals, making connections, supporting fundraises, providing guidance – all of which can make or break young start-ups in the industry. 

IVCA: What does MCN Ventures hope to achieve in their interaction with the VC/PE community within the IVCA?  

MCN Ventures: As new members, we are hoping to get to know the entrepreneurial community in Illinois better. It’s a close-knit community, in Illinois and throughout the Midwest. We are looking to meet new folks, attend events, and start building some great relationships.

For the website of MCN Ventures, click here.

The 2024 IVCA Invitational tees off at the Olympia Fields Country Club on Monday, June 24, 2024. For more information, click here.

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