Jay Adelson was born in Detroit, raised in Southfield, high school at Cranbrook, college at Boston University, became a serial Internet entrepreneur, CEO of Digg, and at age 37, appeared on Time magazine’s list of the world’s 100 most influential people.

Last week, Adelson, now 44, was back in Detroit, scouting the local tech scene as cofounder of a year-old venture capital fund called Center Electric, focused on the Internet of Things.

He and partner Andy Smith are now raising $70 million to $100 million to invest in early-stage companies — and Adelson told me they expect to deploy more than half of it in Michigan.

The twosome were here last week in Michigan for an “immersion day” event, invented by Ann Arbor-based Renaissance Venture Capital Fund to help lure more investment into Michigan. Renaissance, which was created by Business Leaders for Michigan, has raised more than $120 million since 2008 to invest in national VC funds.

As part of their visit, Adelson and Smith met with Whirlpool and Roush Industries. They also met with the Techstars Mobility start-up accelerator in Detroit and with technology transfer officials at University of Michigan.

So what exactly, I asked, is the “Internet of Things?” Why is it a big deal?

And why do Adelson and Smith, a couple of Silicon Valley hotshots, think it might soon become a big driver of economic growth in Michigan?

Smith, a former executive at several tech firms and coauthor of the 2010 book “The Dragonfly Effect: Quick, Effective, and Powerful Ways to Use Social Media to Drive Social Change,” described IoT as the third wave of the Internet revolution. The first was based on the personal computer and the second on mobile devices with screens, such as phones and iPads.

This third wave — that will connect over 50 billion devices in the next five years, from cars to washers and industrial robots — will depend not just on screens and gadgets and software apps. But it will also require a massive buildup in hardware infrastructure to support a world in which Internet connectivity is a basic expectation, like electricity or water.

“When you talk about uplifting the Internet to handle 50 billion devices, you need to be very long-term focused. The requirements, in terms of ability to manufacture and deploy at large scale in terms of hardware, are unmet by the current marketplace,” Adelson said. “You’re talking about a need to build billion-dollar independent companies. The employee base you need for that has to be an employee base that understands that you have a long-term relationship with a company.”

“And frankly, you get that here from people in Michigan in an unparalleled way. Some of it is the auto culture … What could be much more complicated than building a car in terms of integrating systems, data, everything,” he said. “There’s a huge amount of competency here that’s found nowhere else in the nation.”

Chris Rizik, CEO of the Renaissance fund of funds, said once VCs get here and see all the “activity going on here and all the university research, they will realize this is a place with great technology where they can do some successful investing.”

A throwback name

Adelson and Smith have lived and spent their careers mostly in California, but Adelson explained that name of their VC fund hearkens to a business on the Detroit-Southfield border that his great-grandfather founded in the 1940s, to sell electric supplies to construction contractors.

Center Electric Co. at Eight Mile and Greenfield ultimately failed in 1993, a casualty of the savings and loan crisis that rocked the construction industry.

“They lost the business, they lost their home, my family lost everything,” said Adelson, who had left Michigan for college a few years earlier.

“But here’s the great story,” he added. “Because of the way my father took care of customers and vendors from a credit standpoint — it was such a good relationship — there was a great outpouring of support that carried my family through that hard time.”

His parents moved in with other family members for awhile, his dad got a job with another electric supplier and his mom was later hired by a real estate developer who had been a long-time customer.

“The lesson we learned was that you don’t need to sacrifice a moral compass in business,” he said. “I’ll never forget that.”

Adelson is mindful of that lesson as he and Smith — with their VC approach — try to foster a more humane, sustainable business culture than what they’ve seen evolve out West.

“What’s happened in Silicon Valley is that we’ve fostered a culture where your talent is mercenary,” he said. Entrepreneurs and engineers can working in a place 12 months, see their stock-options vest and move on to the next company.

“The venture culture and pressure for short-term returns has sort of promoted this,” he said. People talk a lot about this problem in Silicon Valley, Adelson said, “but I felt like in order to have impact on that, you have to stop blogging about it – and instead start a venture firm and behave differently.”

‘Collective amnesia’

Previous immersion-days visitors have included Boston based Atlas Venture, a big life-sciences investor, plus IT-focused firms Pelion Ventures from Utah and Edison Ventures from New Jersey. All have since made return trips to explore possible deals, Rizik said.

Adelson, while not committing yet to invest in specific Michigan companies or set up an office, sounds pretty gung-ho about the likelihood.

“People forget that the Internet started here,” he said. “It’s just like we have collective amnesia about where this all happened. If it weren’t for Merit Network and University of Michigan, the Internet would never have been commercialized in the first place.”

“I feel that the connected car is definitely coming from Detroit; it’s not something that’s just going to come from Silicon Valley,” he said, although there’s some things to be learned from the IT world about faster iteration of product cycles.

It will be intriguing to watch what Center Electric does in Michigan, because it sounds like the two partners will definitely be back. “We’re not afraid to jump on a plane,” Smith said. And Adelson said his parents, now retired, and a sister and cousins, are all still in metro Detroit, so he has built-in reasons to visit.

“Our philosophy,” he added, “is that we’re not going to invest in a company if we can’t somehow affect the outcome, if we can’t de-risk it ourselves. It’s not like we have superpowers, but if our experiences don’t offer value, then we probably shouldn’t be investing there.”

Venture capital firms take deep look at Michigan with ‘Immersion Days’

■ What are Immersion Days? Regional business groups will host national venture capital firms to take a close look at emerging entrepreneurial activity. In Michigan, they were launched by Renaissance Venture Capital fund of funds and in the Cincinnati area by Cintrifuse in 2012. Last week’s visit to Michigan by Central Electric was cohosted by Renaissance, along with the Michigan Venture Capital Association.

■ Callbacks? Renaissance and Cintrifuse say national firms have returned for follow-up visits for investment opportunities. Renaissance, based on private dollars without the bureaucratic strings of government-funded programs, was a model for Cintrifuse. But Renaissance manager Chris Rizik said Cintrifuse started immersion days and Renaissance copied it.

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