Lt. Governor Garlin Gilchrist II recently announced four Michigan nonprofit organizations will receive initial awards from the Michigan Innovate Capital Fund (MICF), a new program to continue growing a vibrant and robust entrepreneurial ecosystem in Michigan. Ann Arbor SPARK, Biosciences Research and Commercialization Center (BRCC), Invest Detroit, and InvestUP will receive $18 million in funding from the program, which the MSF Board approved in June 2023. And the program received a $23 million allocation from the Jobs for Michigan investment fund. The remaining $5 million allocated for the MICF program is now being reviewed.
The funds will help early-stage, high-tech companies develop products and put them on the market, creating good-paying and high-skilled jobs that keep talent in Michigan and diversify Michigan’s economy. And applicants were eligible to receive initial awards of up to $5 million with the option to increase the award amount during the award term, subject to available funding and approval of the MSF. MICF has preferred nonprofits in underserved locations that address the funding gap in underrepresented communities.
This program builds on the state’s efforts to create an environment that supports the attraction and retention of technology companies in Michigan. And these include the Michigan Small Business Venture Capital Program, support for the Michigan Venture Capital Association’s Venture Fellows program, etc.
With record-low unemployment, a growing workforce, and historic investments in economic competitiveness, Michigan is on the move. And in July, Michigan’s unemployment rate reached historic lows — the lowest in 23 years and only the third time in Michigan history (the second time during Governor Whitmer’s administration) that the unemployment rate fell below 4%.
The U.S. Department of Labor ranked Michigan number 3 in the nation and number 1 in the Midwest in the percentage of workers added to the workforce over the last six months, reversing a trend from 2005 to 2018 when Michigan was one of the largest declines in workforce population.
Ann Arbor SPARK: $5 million
Ann Arbor SPARK is a regional economic development organization with experience managing statewide funds on behalf of the State of Michigan, including the original Michigan Pre-Seed Capital Fund and the Michigan Angel Fund. Over the last 16 years, Ann Arbor SPARK has invested over $30 million in more than 250 early-stage Michigan-based technology companies.
As part of the MICF program, Ann Arbor SPARK will receive $5 million over 2.5 years, co-investing at least $1.5 million alongside the Fund into companies with a tech focus.
Biosciences Research and Commercialization Center (BRCC): $5 million
Launched in 2003 by the Michigan Legislature, the Biosciences Research and Commercialization Center (BRCC) is located at Western Michigan University, with access to the scientific talent and pharmaceutical expertise in Kalamazoo. And BRCC invested in 56 companies and received $10.7 million in realized returns, which has allowed BRCC to reinvest further. To date, BRCC has made early-stage investments totaling nearly $19 million.
BRCC continues investing in Michigan-based startup companies in life sciences with over $2.4 million in available cash. As part of the MICF Program, BRCC will receive initial funding of $5 million. And with further funding through the MICF Program, BRCC will continue to grow and support small businesses in the high-tech life sciences sector.
InvestUP: $3 million
InvestUP is the lead economic development organization for Michigan’s Upper Peninsula. Based in Marquette and formed in 2017, InvestUP drives economic growth by supporting and nurturing local businesses, attracting businesses to relocate or establish new operations, promoting talent and workforce development, creating connections between businesses for joint ventures and supply chains, and working to accelerate economic growth throughout the Upper Peninsula.
As part of the MICF program, InvestUP will receive $3 million to establish the Michigan Outdoor Innovation Fund, which is the first fund of its kind in the Upper Peninsula. And the fund will invest in startups innovating new technology in outdoor recreation, strengthening the long-term future of Michigan’s outdoor and tourism industry. In 2021, outdoor recreation contributed $10.8 billion to Michigan’s economy, and the state’s outdoor recreation industry employs nearly 110,000 people and $5 billion in compensation.
Invest Detroit: $5 million
The Invest Detroit Foundation is a 501(c)(3) non-profit organization managed by ID Ventures (IDV). And Invest Detroit is a leading source of private-sector financing that uses various funding tools to support economic development opportunities in underserved communities. IDV is deeply engaged in the entrepreneurial ecosystem throughout Michigan, having managed early-stage venture capital funds exclusively focused on Michigan-based companies for the past 13 years.
IDV’s First Capital Fund II is a continuation of the First Capital Fund, launched in 2017 to help entrepreneurs get to milestones needed for assistance from traditional venture capital and angel funds, and the Tech Startup Stabilization Fund, to assist startups during the initial COVID crisis. And since 2017, IDV has invested in 200 companies exclusively in the State of Michigan.
Through MCIF, IDV received $5 million to provide ongoing support to Michigan startups through First Capital Fund II. IDV anticipates focusing 20 percent of the funding on the mobility sector.
KEY QUOTES:
“Michigan is home to dreamers, doers, innovators and pioneers pushing the boundaries and building the future. The Michigan Innovate Capital Fund is about unleashing Michigan innovation and supporting startups across our state as they grow our economy, create good-paying, high-tech jobs, and bring supply chains back home from overseas. Congratulations to the initial round of nonprofit organization awardees. Governor Whitmer and I are proud of the work we have done to support Michigan innovation and we are committed to making Michigan the best place to have an idea.”
— Lt. Governor Garlin Gilchrist II
“The Michigan Innovate Capital Fund provides the state with another tool to increase the amount of capital being invested in Michigan-based competitive edge technology companies and diversify the state’s economy. We know the great ideas across our state outnumber the investment dollars to support them, but thanks to this program, we will be able to provide additional early-stage funding to companies and accelerate high-tech innovation across Michigan.”
— Fred Molnar, Senior Vice President of Entrepreneurship and Innovation at the MEDC
“We’re excited to expand our investment in and support for early-stage companies and founders throughout Michigan. Ann Arbor SPARK managed the first pre-seed fund for the state, starting in 2006, and invested in over 200 Michigan companies, many of which have helped diversify our economy and create high paying jobs. This next round of funding will build on that success and unlock the next wave of entrepreneurs and innovations in Michigan.”
— Mike Flanagan, Vice President of Capital Programs at Ann Arbor Spark
“The Biosciences Research and Commercialization Center at Western Michigan University is grateful to have been approved for further funding from the Michigan Strategic Fund through the Michigan Economic Development Corporation, allowing us to expand our support for Michigan based startup companies in the Life Sciences sectors. The success of BRCC’s previous investment funds, coupled with this new funding, will provide ongoing opportunities for new and serial entrepreneurs who may otherwise not receive the capital needed to commercialize and grow their businesses in Michigan.”
— Executive Director Steve Haakenson at Biosciences Research and Commercialization Center
“InvestUP is grateful for and proud of the opportunity to launch and manage the Michigan Outdoor Innovation Fund to support entrepreneurs across Michigan. We extend our sincere gratitude to MEDC CEO Quentin Messer and his team at the MEDC for their continued support and partnership, and the commitment to making investments that seek to build upon regional strengths. Outdoor recreation is not only a strategic asset for both the State and especially the Upper Peninsula, but also serves as a new avenue of opportunity with innovation, entrepreneurship and industry. We look forward to moving this opportunity forward in partnership with statewide and regional stakeholders, like Innovate Marquette SmartZone, who was instrumental in building the concept for this Fund, Michigan Tech University, Shophouse Park, and the MEDC’s Michigan’s Office of Outdoor Recreation Industry.”
— InvestUP CEO Marty Fittante
“We commend the MEDC on launching the Michigan Innovate Capital Fund. This significant initiative underscores their commitment to enabling Michigan’s early-stage entrepreneurs to thrive, unlocking a more vibrant economic future for our state. With a focused blend of patient and experienced capital, the funds supported through this program will serve as a catalyst for innovation, growth, and success across the state.”
— Patti Glaza, EVP for Invest Detroit
