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Ann Arbor Spark

April 6, 2018

What is the Michigan Angel Fund and why was it created?

The Michigan Angel Fund (MAF) is a for-profit, pooled, and professionally managed angel fund. MAF was established by Ann Arbor SPARK and supported by the Michigan Economic Development Corporation to help finance early stage companies in the state of Michigan and to attract additional angel investors to the Michigan entrepreneurial ecosystem. The fund helps move companies from public funding to the private sector.

As the managing member of MAF, Ann Arbor SPARK coordinates screenings of fund applicants, conducts due diligence, and works with the New Enterprise Forum to prepare companies for their investor presentations. Ann Arbor SPARK also works with business accelerator organizations around the state to identify quality companies for potential MAF investment.

MAF is a distinct entity, of which Ann Arbor SPARK is the managing member. The Michigan Angel Fund has no impact on SPARK’s non-profit status. It is not uncommon for non-profits to have for-profit subsidiaries, usually to help support the non-profit. The IRS allows this as long as the for-profit entity is paying taxes on gains.

100% of the funds invested by the Michigan Angel Fund are private funds. No public money is invested in the companies. If successful, the fund will return capital to the investors until they are made whole, then there is a 20% carry on profits that go to SPARK (the organization). These profits do not go to any individual (e.g. a SPARK board member), but instead help support MAF.