State’s VC funding looks bleak, but there’s hope
Business Journal reporting on dozens of entrepreneurial startups in the West Michigan region and the uptick in startups by the millennial generation has been sustained. Colleges, universities, 5x5 Night, Start Garden, Grand Rapids Opportunities for Women and several other organizational efforts provide entrepreneurial lessons, opportunity, encouragement and funding. Within that framework, it is disappointing to note the Business Journal report on the 2018 Michigan Venture Capital Association (MVCA) investment study showing Michigan VC lacking. Again.
The entrepreneurial spirit appears to be a universal marker of the millennial group. The 2018 Amway Global Entrepreneurship Report surveyed men and women ages 14-99 worldwide and found 68 percent of those under 35 had a strong desire to start a business, compared to 60 percent of those 35-49 and 48 percent of those 50 and older. Regions attracting venture capital have been mostly centered in Silicon Valley and Boston corridor communities. At one time, the amount invested in West Michigan was minuscule at best, and Michigan was one of the last places to attract such investments, as it sank from governmental woes, automotive losses and the Great Recession.
The Michigan VC report shows the 21 Michigan-based VC firms had a total of $445 million available for new investment in 2017. The state’s 134 venture-backed startups will require $627 million to fund their growth in the next two years. Funds under management show a decrease of 10 percent over 2016.
Despite the recorded depletions of Michigan VC, the report does offer better news for those West Michigan entrepreneurs in renewed interest by out-of-state venture capitalists. In fact, both Grand Rapids and Detroit reportedly are more often on the list.
Wakestream Ventures, one of the firms surveyed in the Michigan VC report, is led by Rick DeVos and wholly funded by private assets from the DeVos family. Kim Pasquino, investment director, who looks at investment opportunities across the country noted in the story, “Our strongest value proposition is being on the west side of the state,” she said. “We stack up alongside any founder in New York or (Silicon) Valley. We see quality companies and founders here.”
David Brophy, founder of the Michigan Growth Capital Symposium, noted disappointment between the “growth culture” of the millennials and matching growth capital and venture capital with that culture. The match will only come with the success of those young entrepreneurs — and the continued community effort to assist that success.