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New $5 million fund to continue investment in Michigan Accelerator Fund companies

BY Friday, June 03, 2016 10:04am

GRAND RAPIDS — A new venture capital fund in Grand Rapids that will do tack-on deals for existing portfolio companies of Michigan Accelerator Fund I closed this week after raising $5 million from investors.

MAF Opportunity Fund was oversubscribed and secured commitments from backers that include institutional and individual investors as well as family offices. The fund will make follow-on investments to support companies that are already backed by Michigan Accelerator Fund I and need later-stage funding, as MiBiz exclusively reported last month.

“Over the past five years, we believe that we have built a strong portfolio within the Michigan Accelerator Fund, with several companies demonstrating excellent progress towards value accretion and a near-term exit,” Co-managing Director John Kerschen said in a statement. “As our portfolio companies mature, they have continued capital needs. Like many smaller, early-stage venture funds, we were nearly fully deployed and had limited ability to continue investing in the portfolio. Hence the development of the MAF Opportunity Fund.”

Follow-on investments would go to portfolio companies that have demonstrated progress and could generate an exit for Michigan Accelerator within two to three years, said Dale Grogan, who manages the fund with Kerschen.

Grogan previously told MiBiz that four Michigan Accelerator Fund portfolio companies may need additional capital in the near future. They include:

Vestaron Corp., a Kalamazoo-based company developing spider venom-based bio-pesticides.
Ablative Solutions Inc., which developed a catheter system to treat severe hypertension that’s resistant to medication by infusing a therapeutic into the wall of a blood vessel to deactivate nerves around the renal artery.
• Swift Biosciences Inc. in Ann Arbor, which is developing technologies for genomics and personalized medicine.
Tissue Regeneration Systems Inc., a startup medical device company in Plymouth commercializing a skeletal reconstruction and bone regeneration technology licensed from the universities of Michigan and Wisconsin.

MAF Opportunity Fund may also invest in one new deal, Grogan said.

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