
A new $60 million Michigan Innovation Fund will be directed to state-based, existing early-stage evergreen venture funds and emerging evergreen funds. It also will support the entrepreneur ecosystem.
The fund is designed to provide long-term investments in Michigan’s startup companies, grow and diversify the economy, and create jobs. This marks the first major program for entrepreneurs, founders, and funds in over a decade.
“With the Michigan Innovation Fund, we have a powerful tool to support new business creation and stop the trend of companies leaving Michigan to find the startup capital they need,” says Alabas Farhat (D-Dearborn).
“The investments we make in entrepreneurs, innovative technologies, and new industries today will power Michigan’s economic future as well as help support an innovation economy and attract talent.”
Farhart’s co-sponsors were Jason Hoskins (D-Southfield) and Greg VanWoerkom (R- Norton Shores).
Recent studies show Michigan is losing significant jobs, talent, and investment opportunities due to a lack of early-stage investment capital available to would-be entrepreneurs.
The fund hopes to nurture an entrepreneurial ecosystem that can grow over time, reinvest in new and growing assets, and develop a sustainable network of support for entrepreneurial activity across the state.
“Michigan has amazing talent and strong research institutions,” says Hoskins. “There is real potential to be a leader in creating and growing innovative startups. Other states, especially on the coasts, figured this out a long time ago, and more recently our neighboring states.
“The Michigan Innovation Fund is key if we truly want to generate more opportunities for entrepreneurs, leverage the state’s research universities, and see our state emerge as a leader in business growth and compete with our Midwest states.”
Under the plan, funding would be awarded to nonprofit and university-backed funds with proven track records and all investment returns would be recycled back into the respective funds for future investment in Michigan companies, ensuring long-term impact. The five established, evergreen funds include:
- ID Ventures at Invest Detroit
- Ann Arbor SPARK
- University of Michigan’s Accelerate Blue Fund
- MSU Research Foundation
- Western Michigan University’s Biosciences Research and Commercialization Center (BRCC)
In addition to supporting the early-stage evergreen funds, the program will help establish and grow three new early-stage emerging evergreen funds around the state in Grand Rapids, Traverse City, and the Upper Peninsula. In addition to supporting the early-stage evergreen funds, the program will provide additional funding to key partners in the ecosystem that support startup companies, founders, and funds.
Many companies that get their start in Michigan have been forced to leave to follow investment capital in other states, increasingly to Ohio. The Michigan Innovation Fund will help provide early-stage funding to help keep companies from leaving.
“The Michigan Innovation Fund is an exciting step forward for Michigan’s entrepreneurs. We are investing in our state’s talent and reinvigorating our entrepreneurial ecosystem by giving diverse and ambitious founders the tools and support they need to succeed,” says Patti Glaza, executive vice president of Invest Detroit and managing partner at ID Ventures.
“This is the first program of its kind here in Michigan, and it’s going to drive successful innovation commercialization and economic growth in our state.”