Resonating in Venture Capital
Michael Godwin, MBA ’10, and Jason Townsend, MBA ’10, leverage campus resources and the alumni network to launch Resonant Venture Partners.
Michael Godwin, MBA ’10, and Jason Townsend, MBA ’10, could have joined a venture capital firm after graduation. But they decided they’d rather start their own. The result was Ann Arbor-based Resonant Venture Partners, an emerging venture capital firm that makes seed-stage investments in regional startups across a variety of technology fields.
The firm, which focuses on investments in the IT, life sciences, advanced manufacturing, alternative energy, and defense sectors, closed its first deal in late August 2010. And Godwin and Townsend haven’t slowed down since.
Resonant began subscribing its first fund in July 2010. The initial investments were raised from a variety of sources, including James Mertz, MBA ’10, who had worked with Godwin and Townsend as students on the Ross School’s Wolverine Venture Fund (WVF). The pair knew Mertz and his family were veteran angel and VC investors, so when Resonant’s first deal opened up, they didn’t hesitate to make the call. Mertz and his family quickly agreed to provide the capital required for Resonant to close on the deal.
“I believe in them,” says Mertz. “They have the healthy dose of skepticism you need. I didn’t need to learn much about the deal, itself, because I trusted them.”
Godwin says that trust was born from their collaboration on the WVF, a $5.5 million student-led fund. “One of the best things about Ross is that you have the opportunity to work with high-quality people in real-world environments. The relationships you build as a result of that last far beyond graduation, and the experience together far surpasses what could be learned of each other in an interview setting. Having James as a limited partner in our first fund is proof of that respect and the strength of the bond we made at Ross.”
Sealing the Deal
Resonant’s first deal was part of a $1 million investment in Scio Security, a computer security startup led by serial entrepreneur Dug Song and U-M PhD candidate Jon Oberheide. Palo Alto, Calif.-based True Ventures led the round, which also included two strategic angel investors with extensive security expertise. As part of Resonant’s involvement, the firm will be actively involved in building the management team and technology commercialization, and Scio will maintain its Ann Arbor headquarters.
The company’s Ann Arbor roots were important to Godwin and Townsend, who strongly believe in the investment potential of Michigan and its status as an emerging hub for technology innovation. “Resonant is committed to keeping promising companies in Michigan,” Godwin says. “With the entrepreneurial talents and technology innovation coming out of U-M, coupled with investors like us who are eager to invest locally, there is tremendous opportunity for companies to succeed in Ann Arbor and its surrounding communities.”
After successful technology and business development careers in Silicon Valley, Godwin and Townsend attended Ross in order to hone their venture capital skills. They say the school’s environment, especially the Samuel Zell and Robert H. Lurie Institute for Entrepreneurial Studies, provided enriching opportunities to do so. The pair served as managing directors of the Wolverine Venture Fund, the country’s first student-led venture fund. Along with Mertz, they were deeply involved in rigorous due diligence in support of the fund's investment decisions. During their time as fund leaders, the WVF made seven investments and benefited from two exits, most notably the acquisition of HandyLab by Becton Dickinson.
Resonant is the first venture capital firm to be established by alumni who previously played critical roles in investment decisions for the WVF. Godwin and Townsend credit the hands-on experience and mentorship they received at the Zell Lurie Institute for much of Resonant’s success. They also cite the important relationships they established as a result of the institute’s network of entrepreneurs and investors both locally and nationally. Resonant’s advisory board is composed of several notable members of the local investment community, including seasoned angel investor and Ross professor Tom Kinnear. He is executive director of the Zell Lurie Institute and directs the WVF. Mary Campbell, managing director at EDF Ventures, and Donald Walker, managing director of Arbor Partners, also sit on Resonant’s board.
“Tom Kinnear has been our number one champion, and without his support and guidance we would never have accomplished what we have accomplished,” says Godwin. “He never told us what to do, but he frequently asked us hard questions that when finally answered, led us to the right path.”
“It takes an immense amount of passion and effort to start a venture capital firm, especially in today's environment,” says Kinnear, Eugene Applebaum Professor of Entrepreneurial Studies and professor of marketing. “Based on the experiences and successes both Michael and Jason faced on the Wolverine Venture Fund, I am very confident in their ability not only to make Resonant thrive, but also to make significant contributions to Michigan’s flourishing start-up community.”
But Kinnear isn’t the only one in Resonant’s corner. “Ross alums and faculty have enormous mutual respect for one another because of the high bar set by all with regards to our core values and performance,” Godwin says. “The respect we share for each other shows in the fact that each Ross alum, faculty member, and student that we have come in contact with has rallied to support us in our endeavor by providing contacts, capital, mentorship, and perspective. I cannot tell you how grateful we are for our Ross experience and all that the community has done for us.”
—Mary Nickson with Amy Spooner