Partners launch VC fund for tech startups
Technology startups are the target of a new multi-million-dollar venture capital fund backed by several economic development organizations in the state.
The nonprofit Invest Detroit Ventures will manage the First Capital Fund, which will distribute up to $150,000 in early fund investments for qualified applicants.
Invest Detroit Ventures is also looking to raise $4.2 million over the next two years, doubling the initial $2-million investment by Michigan Economic Development Corporation, or MEDC. The New Economy Initiative also contributed $800,000 to the First Capital Fund.
“Our goal is to distribute money as efficiently as possible to get companies through the most challenging early stages of funding,” said Fred Molnar, VP of entrepreneurship and innovation, MEDC.
Molnar added that MEDC is “confident” the fund will have a significant role in developing and attracting high-growth tech companies.
Startups chosen to receive funding will need to hit developmental milestones to justify additional funding.
“This is a truly statewide initiative,” said Patricia Glaza, VP and managing partner, Invest Detroit Ventures. “We’ll be meeting regularly with various partners across Michigan, including universities, SmartZones and business incubators, to identify eligible startups. We’ve designed the process to be as simple as possible, so companies can have access to funding quickly, while still giving us enough information to make smart investments.”
Startups looking to apply for funding through the First Capital Fund can do so via an online process.
Companies are asked to submit their information, referring partner and pitch deck through the online application.
To be considered for funding, companies must meet the following requirements:
- Have more than one full-time employee with key founders and staff located in Michigan
- Have strong potential for additional angel or venture financing
- Ability to meet metrics and milestones sufficiently covered by $50,000-$150,000 in funding provided
- Willingness to accept a standard convertible note
- A product past concept
- Must be a for-profit LLC, C Corp or S Corp
- Incorporated less than 18 months ago
- Total debt and equity financing received is less than $500,000
Companies will not be required to bring additional financiers alongside the investment.