That Michigan’s next governor is a venture capitalist is not lost on the state’s venture capital industry.

Investors are generally pleased that the next governor, Ann Arbor’s Rick Snyder, will be someone who not only understands their complex industry - he’s from their industry.

And they’re happy that Snyder wants to boost Michigan’s entrepreneurial companies, the target of most VC investments.

The investors managing Michigan’s efforts to cultivate a vibrant venture capital industry said they are encouraged by Snyder’s approach to economic development, even if the likelihood of new cash from the state is low.

“My view is that it’s always a great thing to have someone who understands how to build a business and understands, from a venture capital and private equity perspective, how to do that,” said Kelly Williams, a New York-based manager of Credit Suisse’s customized fund investment group, which has invested $204 million in Michigan VC firms on behalf of the state. “This type of financing - it’s not intuitive. It’s very hard to explain it.”

Nonetheless, investors face the likelihood that Lansing is done investing directly in venture capital operations.

“Venture capitalists - they have the money, they have the financing,” said Bill Nowling, Snyder’s spokesman. “What they really need is government to get out of the way so they can make their investments and hopefully see their investments grow and mature.”

Snyder, who led two Ann Arbor VC firms before running for governor, may not funnel more state cash to venture capital investors. But he is positioned to boost startup companies, which investors are hunting for, by pushing for business tax reform and a streamlined regulatory system.

During Gov. Jennifer Granholm’s administration, the MEDC delivered $109 million for the 21st Century Investment Fund and $95 million for the Venture Michigan Fund. The state hired Credit Suisse to manage those two programs and distribute cash to venture capitalists with Michigan operations or direct ties to existing local investors.

Credit Suisse says the investments are paying dividends in the form of new jobs and an increasingly entrepreneurial economy.

So far, the 24 venture capital firms that received cash from the VMF and 21st Century Investment Fund have invested $79.7 million in 31 Michigan companies, according to Credit Suisse. Those companies employ some 486 workers in Michigan.

Credit Suisse will continue to manage the investments - and deliver returns to the state if and when the investments pay off. But the VMF and 21st Century Investment Fund have no new funds left to distribute, meaning the state is effectively out of the VC investment business for now.

Snyder could choose to inject more cash into those programs to boost his fellow VC investors, but that seems unlikely.

“You’re going to see a redirection of the economic development efforts to see a focus on more local businesses and the local economy and making sure the local economies are strong and diversified,” Nowling said. “That’s going to be the biggest attraction tool for venture capitalists.”

Separately, Credit Suisse and global investment firm Beringea are co-managing $185 million in cash from the state’s pension fund through the InvestMichigan! Growth Capital Fund. Through that program, they have invested $55 million directly into Michigan companies such as Scio Township-based Accuri Cytometers and Ann Arbor-based Sakti3.

Ann Arbor venture capitalist Rick Snyder, Michigan's governor-elect

Rick Snyder, Michigan gubernatorial candidate, former Gateway Inc. president, founder of Ann Arbor SPARK

The investments “prove the fact that there are great venture capital opportunities” in Michigan, said Charles Rothstein, senior managing director of Beringea’s Michigan operations.

Until Michigan started investing in venture capital, “it was a really hard sell to convince people that there were opportunities here that weren’t on the East Coast or the West Coast,” Rothstein said.

Still, as Michigan cultivates a venture capital industry and startup community, some unpleasant side effects are inevitable.

In October, for example, New Jersey-based medical devices giant Becton, Dickinson and Co. announced that it would shut down HandyLab’s Pittsfield Township operation after paying $275 million for the venture-backed startup in late 2009. HandyLab’s acquisition was hailed as a sign of the region’s entrepreneurial momentum when it was sold, but its exodus was a reminder that venture capital-backed companies are often susceptible to moving to another state.

That happened again just two weeks ago when University of Michigan microcontroller startup Ambiq Micro acquired some early-stage VC financing and announced that it was leaving for Texas.

Williams said she was not concerned about the departure of HandyLab and Ambiq Micro and that those instances should not cause the state to second-guess venture capital as an investment.

“You’re really talking about the transformation of an economy,” she said. “If you’re going to have the transformation into the type of technology economy Michigan wants to have, you’re naturally going to invest in venture capital.”

She added: “The important thing there is changing the mindset and making people think of Michigan as a destination for technology investing.”

Snyder wants to change that mindset, too. He has repeatedly cited his vision of nurturing “Michigan 3.0,” which he calls the “era of innovation.”

That era will start without a new influx of venture capital dollars from Lansing.

But the money that’s already been invested is generating the seedlings that could lead to a harvest as Michigan’s economy recovers.

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.