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GM Loves Michigan Ventures

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In a story in the Detroit Free Press on Friday, writer Chrissie Thompson notes that four of the six companies that GM Ventures (NYSE: GM) is investing in are from its home state of Michigan leading to accusations that the venture-capital fund run by Jon Lauckner is a zip code investor. Lauckner denies that.

And to be fair, he has a point. Two of the Michigan businesses in question, plug-in hybrid developer Bright Automotive and solar energy company Sunlogics moved from out of state to vacant space in Rochester Hills, MI, once they had become involved with GM. Envia Systems, a battery materials form, may be moving to the mitten soon.

Sakti3, who make electric vehicle batteries, is based in Ann Arbor while Powermat, who make wireless charging mats for cell phones, is based in Commerce Township.

So there is a Michigan slant. But is any of this really a surprise? GM is, after all, based in Michigan. Is there anything wrong with slightly favoring businesses from its home state, especially when considering how hard a time Detroit has had in recent years? Thompson writes that, “The team has so far reviewed applications from about 400 companies. Investments will focus on five areas that executives think will drive much of the auto industry's change in coming years: clean technology; infotainment; materials that are lightweight, green or otherwise "smart"; advanced technologies such as sensors or microprocessors; and alternatives to the traditional automotive business model. The group received $100 million when it was founded last July, with more funding to come annually if GM Ventures is successful.” GM Ventures is still only a year old, and so it is natural that the first place the team would look is its own doorstep. Undoubtedly, they will look further afield as time goes by. But for now, Michigan will be very grateful for that funding.

Posted-In: Entrepreneurship Financing Startups Small Business Media General Best of Benzinga

 

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