In June, some 2,000 representatives from venture capital companies, founders, large private enterprises, and the public sector converged on Hudson’s Detroit for the third annual Reindustrialize Conference.
Among the topics discussed at the June 16-18 collaboration were reindustrialization, reshoring, defense tech, and public-private partnerships.
“Detroit feels like the right place to hold this conference and lean into what we can build outside of automotive,” says Lindsay Kilbride, an investor at Detroit Venture Partners, part of the Gilbert Family Office in Detroit. “Venture capital leaders from other cities are paying attention to what’s happening in Detroit.”
One of the reasons the Motor City is the “right place” to conduct a venture capital-related conference is that it’s in Michigan, the third-rated state in the nation for investing in home-grown startups. According to the Rise of the Rest Revolution Fund’s 2026 Annual Report, the Great Lakes State is behind Kentucky and California in investing in new local companies.
The report states the local investor participation rate in Michigan is 64.4 percent. California’s is 73 percent and Kentucky’s is 82.4 percent. Indiana is fourth at 57.4 percent, and New York rounds out the top five at 51.9 percent.
“Michigan’s innovation economy draws on deep roots in manufacturing and mobility, alongside growing momentum in software, life sciences, and climate tech,” the report says. “In 2025, Michigan startups saw 163 venture deals, with local investors participating in 64.4 percent of them.”
Michigan’s top local investor is Michigan Rise, a subsidiary of the Michigan State University Research Foundation, a nonprofit organization established in 1973 in East Lansing to advance economic development through technology commercialization. It partners with the Michigan Economic Development Corp. (MEDC) in “building Michigan’s future as a leading hub for technological innovation and entrepreneurship.”
In 2025, Michigan Rise participated in 31 deals; Innovation Partnerships, part of the University of Michigan in Ann Arbor, followed close behind with 28 deals.
Ara Topouzian, executive director of the Michigan Venture Capital Association in Bloomfield Hills, says it’s important that local investors support area startups, specifically at the state government level.
“We continue to push for things like the Michigan Innovation Fund (MIF) and we want to see more money go into that,” Topouzian says. “We need to be competitive within the Great Lakes and we haven’t been. You have states like Indiana, Ohio, and Wisconsin with a ton of incentives and capital to play with.
“The Michigan Innovation Fund is the first time in decades that we’ve had any kind of incentives that help promote innovation. We need to continue on that path.”
The MIF is a $60 million bipartisan state program backed by the MEDC to provide capital to early-stage startups and bolster the statewide entrepreneurial ecosystem. It provides long-term, continuous-growth capital through evergreen venture funds across the state in an effort to retain homegrown talent, drive job growth, ensure a continuous pipeline of investment capital, and reduce the number of founders leaving Michigan for other markets.
Kilbride says there are efforts, in addition to state-sponsored investing, that are stemming the tide of startups leaving the state and bringing companies into Michigan.
“Since I’ve been investing over the last four or five years, investors in the state have had more intentionality about how we all work together,” Kilbride says. “For years, we took for granted that we all see and know the same things, but we don’t.
“We’re doing regular co-working days. We probably have 150 people from around the state who collaborate and co-invest. We’re looking at how our combined efforts have a greater chance of success.”
As a result, she sees Detroit and southeast Michigan being more attractive as a place for founders to come and build than they did four or five years ago.
“Some of this is the work being done at Newlab (at Michigan Central in Detroit) and the other collaboration spaces that offer shared resources and opportunities for mentorship and expertise, but I also think the city of Detroit is a great story right now,” she says. “The population is growing for the first time in a long time. The downtown area is not only safe, but it’s thriving — and you can walk between MLB, NBA, NHL, and NFL games.
“In the last two or three years, we’ve invested in companies (that) decided to move here, not because we twisted their arms but because we have the infrastructure and engineering talent,” Kilbride adds.
She’s referring to Nox Metals, a supplier of aluminum plates and bars; Maka Kids, a children’s media platform; AutoSitu, an AI-native intelligence provider for real estate; Birdstop, a drone airspace monitoring system; and Bloomscape, a platform for buying plants. The companies all have made their headquarters in Detroit.
Another region of the state that’s attracting the attention of investors is the Upper Peninsula, specifically the area that includes Houghton, the home of Michigan Technological University, and nearby Marquette and Calumet.
“We’re seeing a growth of technology companies and investable companies, traditional companies, and startups that we haven’t seen previously,” says Jim Baker, associate vice president for research administration at Michigan Tech, who explains that it wasn’t easy getting to this point.
Houghton is about a seven-hour drive from Detroit, and a nine-hour drive from Grand Rapids. Given the distances, isolation is a factor, as is culture — economic and otherwise.
“We send founders to Grand Rapids and Detroit to raise money and they come back saying, ‘they don’t know how we do business up here,’” Baker explains.
Over time, he was able to start the Michigan Outdoor Innovation Fund in Marquette and 1885 Capital, local funds that understand how business is conducted in the U.P.
“I think we’re at an inflection point,” Baker says. “We were one of the first Smart Zones in the state 25 years ago. We have the technologists. We have research going on at Michigan Tech. Now, we have an evergreen pre-seed fund run out of Marquette, so we can have discussions locally with people who understand the culture and business environment. That has driven the innovation culture.”
In Hancock, just north of Michigan Tech, 1885 Capital backs early-stage founders across manufacturing, enterprise software, advanced materials, and sustainability.
Among the success stories from the U.P. are Steelhead Technologies in Calumet, which undertakes manufacturing, powder coating, liquid painting, fabrication, galvanizing, heat treatment, chemical processing, and other industrial tasks.
Another successful company is Mohawk Technologies in Mohawk, which expands modern factory capability for the dairy processing industry by combining controls engineering, process engineering, and process installation into a turnkey process solution.
Businesses showing promise in the U.P. are technologies involving material science and recycling.
“There’s quite a bit of work in critical minerals that has significant promise based on the reshoring of mineral extraction, processing, and purification that other people aren’t doing,” Baker says.
“Capital finds good deals,” he adds. “If we put together good deals with good teams, we can get money out of the coasts, (and) we can get money out of the metropolitan centers of Michigan. We’ve demonstrated the ability to do that.”
In the western part of the state, the Michigan Capital Network in Grand Rapids is growing.
“They’re very busy and doing some great things,” Topouzian notes.
Michigan Capital Network, which has its headquarters in the AC Hotel in downtown Grand Rapids, has more than $250 million under management across five funds. It has invested in more than 100 companies, 90 percent of which were founded in the Midwest, and has 70-plus investors in its network.
The Grand Rapids network invests in life sciences, advanced manufacturing, advanced agriculture, and software and IT.
Among its success stories are Atlas Space Operations in Traverse City, Grand River Aseptic Manufacturing in Grand Rapids, and Max Analytical Technologies in Mount Pleasant.
Higher up the investment ladder, private equity is becoming a bigger player in the automotive M&A universe, according to a report from PwC.
Still, the average private equity transaction size remains less than $100 million, the report states, supported by moderating valuations, dry powder, and a steady cadence of supplier carveouts making automotive assets reachable for financial buyers.
Overall, the state of Michigan’s venture capital business seems to be on the upswing, despite the challenges of raising funds.
“I think it’s going well,” Topouzian says. “A lot of funds are in the midst of fundraising, and fundraising is hard in this economy. We’re seeing some new funds come into play, which is good, and I want to see more funds in the state of Michigan, for sure.
“I think Michigan Central is a wonderful hub for the city. With Michigan Central and Newlab, you’re seeing a lot of technology and startups that are great for the state.”
Kilbride also is bullish on southeast Michigan’s venture capital potential.
“We’re starting to see some green shoots coming from the seeds that were planted 15 years ago by the Ilitches and the Gilberts,” she says. “This is a city that’s growing and innovating, and people want to live (here). The country is paying attention, and the world is paying attention.”
