There are 55 active venture-backed startups in Washtenaw County, a 31 percent increase over the last six years, according to the 2020 Ann Arbor Entrepreneurial Ecosystem Report, which was released today.
EntryPoint, a nonprofit research institution that delivers research insights and implements programs to promote entrepreneurship across the Midwest, released the report, which provides research insights and themes affecting the entrepreneurial ecosystem, including trends, successes, and challenges that characterize Washtenaw County. The report also analyzes the impact of COVID-19 startups in the region.
“Ann Arbor has a history of founders who have launched successful companies and continue to invest in the region,” says Emily Heintz, founder and managing director of EntryPoint. “We’ve seen this with Arbor Networks, Duo Security, and now Censys, where founders develop groundbreaking solutions and hire talented people who then start their own ventures, creating a continuous cycle of innovation that only gets stronger as time goes on. As tough as these times may be, the region is resilient because of a well-established foundation of talent, research, capital, and community, making it one of the main hubs of startup growth in the Midwest.”
The city has more than 20 years of sustainable growth and activity in entrepreneurship. It contains 38 percent of the venture-backed companies in Michigan. The 55 active venture-backed startups in the county have raised nearly $1 billion in venture capital funding. Of the startups, 53 percent are information technology companies, and 36 percent are life science or health care companies.
Of the startups surveyed in the county, 94 percent said they felt they were at least somewhat prepared to operate during shelter-in-place. About 28 percent of startups lost more than half of their revenue since February, compared to 61 percent of all businesses in the county, while 31 percent have seen their revenue stay the same or increase during the pandemic compared to 7 percent of all businesses in the county. The survey shows that 72 percent of startups in the county have applied or intend to apply for loans to support their operations during and after COVID-19.
“For Michigan to grow entrepreneurially, we need to foster a culture focused on regional success. We must support a robust startup ecosystem not just in Ann Arbor and Detroit, but across the state as a whole,” says Dug Song, co-founder and general manager of Duo Security in Ann Arbor, which is a part of California’s Cisco. “The data from the 2020 Ann Arbor Entrepreneurial Ecosystem Report shows how resilient our established tech ecosystem can be, even in the face of broader economic challenges. Our larger opportunity is to connect startup communities throughout the state of Michigan to sustain their growth as well as to attract and retain talent.”
The full report is available here.
EntryPoint will host a free virtual panel featuring Patti Glaza of ID Ventures in Detroit, Kelly Sexton of the University of Michigan Office of Tech Transfer in Ann Arbor, and Song. The discussion will explore ways the community can better nurture startups, the impact of COVID-19 on the tech community, how to build a more inclusive entrepreneurial ecosystem, events that have shaped the startup community in the Ann Arbor area, and advice for people who want to start their own companies.
Registration is available here.
For more information on the state’s investment firms, click here to see DBusiness magazine’s 2020 Michigan Venture Capital Report.