Ardesta launches "third wave" of area VC

The venture capital pond just landed a big new fish.

Ardesta Ventures I was founded by Rick Snyder and Chris Rizik, who have already made their mark with two previous funds, Avalon and Ardesta. The duo has successfully brought up such companies as still-growing Handylab and Esperion --which was sold to Pfizer in 2004 for more than ten times Avalon's $2.5 million investment.

Snyder, who founded Gateway Computers, got started with Avalon in 1997 --it raised $80 million and is fully invested. Ardesta followed in 2000 with a focus on small technology. "We define small technology as micro- and nanotechnologies," says Snyder. "At that time, it was the future wave of things, there were not many people talking about it."

Ardesta raised $100 million which it then invested in nine companies, including Handylab and Sensicore, which uses particle detection sensors to test water. Any monies remaining in Ardesta's piggy bank are already earmarked for the fund's existing nine companies.

"We focused on building and growing," says Snyder, who explains that with the exception of Handylab, they were with Ardesta companies from day one. "The good part is that they are now grown up and they don't need us as much. Most of these companies are now having to ship product or are close to it."

This freed up time is obviously not going to waste: Ardesta Ventures has already been allocated up to $7.5 million from the state's 21st Century Investment Fund and that amount will be matched by the Venture Michigan Fund. Snyder anticipates the new fund, like the previous two incarnations, will find companies that grow from technologies developed at the University of Michigan.

Things have improved in the world of VC from the days of Avalon. "There were only two or three funds, now there are a half-dozen or more, a more extensive capital market," says Snyder. "People are more interested in investing in this area, but there is a long way to go to catch up to [Silicon] Valley. We need to keep going and doing more."

Snyder says the key to success is patience. "You have to reinvest," he says. "It can take seven to 10 years to have a company be successful enough to have good financial results."

Ultimately, Snyder has faith in the southeast Michigan area. "There is tremendous opportunity, tremendous technology," he says. "There is a long-term talent pool here that needs development and work. That's what I've been helping build over the last 10 years."

Source: Rick Snyder, Ardesta
Writer: Kelli B. Kavanaugh