Entrepreneurs Turn to Michigan to Create and Grow their Business
Wednesday, May 22, 2019
Entrepreneurs and venture capitalists from around the world gathered in Michigan for the Midwest Growth Capital Symposium to build connections and access capital to stimulate business growth.
Around the globe, Michigan is increasingly being recognized as the place for entrepreneurs to grow and expand their business, especially as more startups and venture capitalists begin looking outside Silicon Valley for opportunities. From our expansive venture capital ecosystem, widespread university commercialization support and attractive quality of life, Michigan is a growing threat to the Valley as it becomes the preeminent place to grow and expand a business.
These strengths were highlighted in May when hundreds of startup and venture capitalists from around the world gathered in Ann Arbor for the 38th annual Midwest Growth Capital Symposium (MGCS), hosting more than 400 industry professionals and showcasing 33 companies seeking venture capital support.
Held in the hometown of the University of Michigan — which is ranked No. 1 in the nation for its undergraduate entrepreneurship program — the two-day event fostered an atmosphere of innovation, where startups could hone their pitches and seek additional support and resources from venture capitalists (VCs) willing to invest in their ideas.
And while there are plenty of startups available to fund, the number of VCs investing in Michigan has grown as more industry professionals discover the wealth of potential available here. Although there are 27 private venture firms operating in Michigan — of which 21 are headquartered in the state — as of 2018, 533 venture capital firms from outside of Michigan have invested in Michigan-based startups. Add to that Michigan’s recent launch of StartupMichigan.tech, a free online platform featuring more than 335 startups, hubs and funders to help facilitate business connections, and it is clear that Michigan stands out as a preeminent home for opportunity.
Take Alerje, for example, the Detroit-based startup creating a smartphone case that holds an epinephrine auto-injector for food allergy emergencies, along with a paired app that will send alerts to 9-1-1 operators, parents and caregivers if the auto-injector is removed from the case. The startup is a graduate of TechTown in Detroit and the Accelerate Michigan program — which are supported by the MEDC. As a patient himself, founder Javier Evelyn has raised $495,000 in funding to date and has support from Invest Detroit Ventures, which is also financed in part by the MEDC. Evelyn was able to use the vast ecosystem available throughout Michigan to build his company’s stature and attend MGCS to seek additional seed funding for product development and marketing, to help his company succeed from right here in Michigan.
A recurring theme among VCs and startups alike is the increasing competition Michigan poses to the famed Silicon Valley, as more high-tech startups and venture capitalists forego the congested traffic and high cost of living in the Bay area in exchange for a Pure Michigan way of life. After all, Michigan’s cost of living is 62 percent less expensive than in San Francisco and the Great Lakes State boasts more freshwater coastline than California — or any other state, for that matter.
While MGCS attendees ranged from Texas to New York and California to Israel, all could agree that the widespread entrepreneurial ecosystem that exists in Michigan makes it a natural hub for accessing the innovations and discoveries of the future. And it pays off for a venture capital firm in Michigan to invest in a startup here in the state instead of turning elsewhere. For every $1 a Michigan venture capital firm invests in a startup in the state, $3.83 in investment is attracted from outside the state, according to the Michigan Venture Capital Association, creating cost-benefits for both the startup and VC alike.
A critical piece of the state’s strong entrepreneurial ecosystem is the Michigan Translational Research and Commercialization (MTRAC) program, which accelerates technology transfers from Michigan’s institutions of higher education, nonprofit research centers and hospital systems for commercialization of competitive technologies in key industry areas. Offering specializations in Agriculture-Biology, Advanced Computing, Advanced Transportation, Life Sciences and Advanced Materials, these innovation hubs provide pipelines from university research and ideas to commercialization. Local to Ann Arbor, the University of Michigan stood out as an example of this success during MGCS, having graduated students with in the last ten years that have started more than 1,000 companies and raised $61 million in funding.
All of these factors — a high quality of life, an affordable cost of living, access to early-stage capital and a strong talent pipeline — contribute to the growing threat Michigan poses to Silicon Valley. And while the Valley did not grow overnight into the tech hub it is today, Michigan is already building its own network to challenge the Valley’s by leaning into our many strengths and emphasizing what makes us stand out among the rest.
Because there can be no denying that in every way, Michigan is the top place to create and grow a business — and we do not plan on slowing down any time soon.
To learn more about the MEDC’s Entrepreneurship & Innovation initiative, which provides high-tech startup companies with access to a variety of critical resources, such as funding and expert counsel, from ideation to maturation, visit michiganbusiness.org/entrepreneurship.
To learn more about the services available from the MEDC to help businesses grow, go to michiganbusiness.org.
To contact a business development specialist, click here or call 1.888.522.0103.
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