Ann Arbor-based startups are taking the lion’s share of the new early stage seed capital from the Michigan Pre-Seed Fund 2.0.
Promising small businesses from Tree Town made up three of the last five recipients from the fund. Ann Arbor-based ventures have also comprised 10 of the 18 investments made so far.
"The recent activity has been concentrated in Ann Arbor," says Charles Moret, president of Invest Michigan, which manages the Michigan Pre-Seed Fund 2.0. He adds that there are plenty of other promising startups at the front of the line for funding, including several from the west side of Michigan and Metro Detroit.
Invest Michigan launched a little more than a year ago and currently employs a staff of four people in downtown Detroit. It oversees the Michigan Pre-Seed Fund 2.0. The $5.8 million fund is capitalized by the Michigan Strategic Fund, which is administered by the Michigan Economic Development Corp.
The Michigan Pre-Seed Fund 2.0 makes small investments ($50,000 to $150,000 in a convertible note or equity investment) in early stage startups looking to rapidly grow their businesses. All companies that receive funding are required to secure a minimum of 1:1 in matching co-investment funds. Some of the industries it is targeting include automotive, agriculture, alternative energy, defense, IT, and life sciences. Startups that do well can receive a follow-on investment worth up to $500,000 from the fund.
"Our strategy in Michigan is to enable investors to pool their money together to support early stage startups," Moret says.
The most recent companies to receive funding include ENT Biotech Solutions, NanoRETE, Arborlight, Cribspot and Picospray. The last three are based in Ann Arbor. Arborlight makes architectural lighting that mimics daylight. Cribspot serves as clearinghouse for rentals on and near college campuses. Picospray is developing technology that makes small engines more fuel efficient and produce fewer emissions.
Moret expects to make another 10-12 investments in Michigan-based startups before the end of the year.
"We have funding for the next two years if we maintain our current pace," Moret says.
Source: Charles Moret, president of Invest Michigan
Writer: Jon Zemke
Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
News from Concentrate
