Amherst Fund’s Turner Sees Expanded Role for Angel Investors in Michigan

Shannon Beeman
May 23, 2014

Over the past year, Matt Turner, the president and CEO of Amherst Fund, has observed that venture-capital investors in Michigan are slowly moving away from the seed stage and shifting their investment sights further down the development life of entrepreneurial companies.

“This is a sign that start-ups are maturing, and VCs are focused on putting their money into companies at later stages,” he says. “At our firm, for example, we are winding up our second fund and doing follow-on investments in portfolio companies that have gained traction.”

Ann Arbor-based Amherst Fund is a privately held, medium-size investment company with two funds and nearly $30 million under management. The firm makes angel, seed and early-stage investments primarily in small companies that are developing new products and services in sectors, such as electronic-component manufacturing, retail, Iot, mobile marketing and medical devices. Amherst Fund also maintains a strong community focus and partners with other funds on private-equity deals in the local area.

The migration of VCs out of the seed stage is creating opportunities for a new breed of angel investors and angel groups to come into that space and fill an important role in the entrepreneurial ecosystem, according to Turner. These high net worth individuals and networks are willing and able to provide the very early financing that fledgling ventures need to get up and running. “In the past, there was just a small group of people working in the so-called angel space,” Turner remarks. “Now that population is growing, and angel investors are becoming very sophisticated, intelligent and relevant. There are quite a few networks active here in Michigan.”

Although angels may not have deep pockets, like VCs, they often pool their financial resources and provide enough financing to help companies reach early milestones of worthiness. “A number of angels are limited partners or venture capitalists involved in other funds,” Turner says. “This is advantageous to entrepreneurs, because they get input from sophisticated early-stage investors who can bring in VCs later on.”

Out-of-state investors tend to underrate Michigan as a place to put venture-capital dollars to work, according to Turner. “This state has a history of automotive engineering and outstanding universities,” he says. “There is a great deal happening in Michigan and it has a lot of ‘unturned stones.’” Among the top sector plays for potential investors are advanced technologies that improve computing efficiency and reduce energy consumption in smartphones, sensors and other computerized devices.

“One of our most exciting investments is in the mobile-marketing company FlockTAG,” Turner says. The Ann Arbor-based startup, which digitizes customer rewards for small businesses, was founded by David Lin, a Ross School MBA graduate and now vice president of operations at Amherst Fund. Turner also considers Fusian Coolant Systems a top investment holding. The company was spun out of the University of Michigan and provides an advanced coolant and lubrication system for use in manufacturing.

Amherst Fund is an annual sponsor of the Michigan Growth Capital Symposium, where Turner says he is able to make face-to-face contact with entrepreneurs and investors. “The symposium is a must-attend event for anyone who wants news and information about what’s going on in the venture-capital industry in Michigan,” he says.

To register for this year’s Michigan Growth Capital Symposium, click the link: