EntryPoint, a nonprofit research institution in Ann Arbor, has released the 2020 Detroit Entrepreneurial Ecosystem Report. The study provides insights into Detroit’s entrepreneurial ecosystem, including the development of entrepreneurial support programs as small businesses and startups navigate the changing economic climate.
“While the report shows promising data of the steady growth of startups in Detroit, there is no denying the COVID-19 pandemic will heavily impact small businesses and startups,” says Emily Heintz, founder and managing director of EntryPoint.
Findings from the report show the continued momentum of startup growth in Detroit. There are 38 active venture-backed startups in Wayne County that have raised an aggregate of $485 million, a 58 percent increase in the number of high-growth companies over the last six years.
Over 26 percent of the venture-backed startups in Michigan are located in Detroit. The dominant sectors are IT firms and mobility-related companies. Of the 38 active-venture backed startups in Wayne County, 47 percent are IT companies and 19 percent are mobility-related.
In 2019, 19 venture-backed startups in the Detroit area attracted more than $63.8 million from venture capital firms. Of the 19 startups that received venture capital investment last year, 47 percent are IT firms and 21 percent are life science/healthcare companies with the remaining companies divided among the mobility and consumer products sectors.
Additionally, the report provides new insights on attracting and retaining top talent. To adjust to the changing workplace norms and to remain competitive, it is critical for small businesses and startups to instill a workplace culture that enables people to continue innovating – as well as provide the adaptability necessary to adjust to opportunities and challenges in the economy. Of the venture-backed startups in Detroit, nearly all or most provide work from home flexibility, paid time off, and parental leave.
Along with a comprehensive analysis of the entrepreneurial ecosystem in Detroit, EntryPoint identified there are four contributing factors to building a robust entrepreneurial ecosystem: capital, talent, research, and community. In response, Michigan Economic Development Corporation (MEDC) is implementing programs to provide opportunities to Detroiters, and Michigan residents, by:
- Creating programs designed to support researchers developing new technologies at top research universities across the state;
- Supporting organizations dedicated to growing and sustaining a vibrant venture community;
- And providing entrepreneurs and startups business services and operational support.
To learn more about utilizing data to implement effective programs to support the entrepreneurial ecosystem, visit the EntryPoint Research and Program Development Guide.
Support for the report was provided by Bamboo, Build Institute, Cahoots, City of Detroit, Endeavor, ID Ventures, Inforum, Jaffe Raitt Heuer and Weiss, Marketing Supply Co., Michigan’s University Research Corridor, the Michigan Venture Capital Association, re:purpose, Renaissance Venture Capital, Shine and Rise, and Techstars.
EntryPoint is a research institution that promotes entrepreneurship across the Midwest. The organization provides comprehensive research insights and implements effective data-driven programs to promote entrepreneurship across the Midwest. The report can be accessed at 2020 Detroit Entrepreneurial Ecosystem Report. To learn more, visit www.entrypointmi.com.