Bridging the Opportunity Divide

Michigan Shows the Power of Venture Capital

June 20, 2014
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Michigan Shows the Power of Venture Capital
Michigan has seen a slew of new businesses rise out of venture capital funding. Tax Credits/Flickr
The result? A skyrocketing number of new businesses.

Entrepreneurs and venture capital go hand in hand.

There’s no where that that is truer than in Michigan, where over the past five years, venture capitalism has increased by 84 percent in the state compared to a 13 percent drop nationwide, according to a report from Cassie Jones, the executive director of Michigan Venture Capital Association. Not only is Michigan ahead of the rest of the country, it also defeated its neighbors with more venture-backed deals in 2013 than Indiana, Minnesota and Wisconsin.

And the numbers only get better as venture capital-backed companies in Michigan increased by 66 percent to 103 companies. Among that, angel investment (a type of investor that’s usually found among the entrepreneur’s family and friends) is also up — with 36 companies receiving more than $9.9 million in funding.

At the University of Michigan’s Office of Technology Transfer, entrepreneurs, investor,s and innovators recently gathered to network and discuss the future of business in Michigan. The semi-annual Entrepreneurs Engage event is a sounding board and an example of what a leap of faith can do for businesses.

The focus of the event? Continuing the state’s success into the future. Among the topics of discussion are the MILE Act, angel investing, the disparity between the startup ecosystems of Detroit and Ann Arbor, and how to snatch the recent graduates of the University of Michigan.

One of the defining characteristics of Michigan’s venture capitalists (VCs) program is that the state has been involved every step of the way. While most states only help fund certain areas, the state’s Michigan Economic Development Corporation (MEDC) has focused on every area equally from early funding to university tech transfer to fund-of-funds. This is why 20 of Michigan’s 35 venture capitalist firms are Michigan born and bred.

“It’s nice, 10 to 12 years after the state implemented strategies like the 21st Century Jobs Fund, to have VCs hold up a mirror and say Michigan did so much right,” said Paula Sorrell, vice president of entrepreneurship and innovation at MEDC. “Some states fund parts, but Michigan did the entire ecosystem.” 

MORE: Here’s How Thousands of Low-Income Americans Became Entrepreneurs

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