Funding would provide crucial support for entrepreneurs and startups by helping to create self-sustaining nonprofit early-stage evergreen funds and leverage existing fund infrastructure
Today, Governor Gretchen Whitmer signed House Bills 5651, 5652 and 5653, sponsored by Representative Alabas Farhat (D-Dearborn), Jason Hoskins (D- Southfield) and Greg VanWoerkom (R- Norton Shores) which will create the Michigan Innovation Fund. This $60 million fund will provide critical funding to Michigan’s existing early-stage evergreen venture funds, emerging evergreen funds, and the entrepreneur ecosystem. The Michigan Innovation Fund is designed to provide long-term investments in Michigan’s startup companies, grow and diversify the economy, create jobs; and build a strong, competitive, and sustainable financial network to support startup companies across Michigan. This marks the first major program for entrepreneurs, founders and funds in over a decade.
“For too long, we overlooked the importance of helping grow all areas of our economy, especially Michigan entrepreneurs and the impact they can have on future jobs and economic growth,” said Representative Farhat. “With the Michigan Innovation Fund, we have a powerful tool to support new business creation and stop the trend of companies leaving Michigan to find the startup capital they need. The investments we make in entrepreneurs, innovative technologies, and new industries today will power Michigan’s economic future as well as help support an innovation economy and attract talent.”
“I truly believe the next great business is here in Michigan, and the Michigan Innovation Fund will play a vital role in advancing our state’s economic ecosystem and helping our entrepreneurs thrive,” said Rep. VanWoerkom, Republican vice chair of the House Appropriations Subcommittee on Labor and Economic Opportunity.
Recent studies show that Michigan is losing significant jobs, talent and investment opportunities due to the lack of early-stage investment capital available to would-be entrepreneurs. The $60M Michigan Innovation Fund is a big step forward in giving Michigan a chance to become a leader in early-stage, pre-seed funding, combining entrepreneurial support services and early-stage capital to create and nurture an entrepreneurial ecosystem that can grow over time, reinvest in new and growing assets and develop a sustainable network of support for entrepreneurial activity across the state.
“Michigan has amazing talent and strong research institutions,” said Representative Hoskins. “There is real potential to be a leader in creating and growing innovative startups. Other states, especially on the coasts, figured this out a long time ago, and more recently our neighboring states. The Michigan Innovation Fund is key if we truly want to generate more opportunities for entrepreneurs, leverage the state’s research universities, and see our state emerge as a leader in business growth and compete with our Midwest states.”
Under the plan, funding would be awarded to nonprofit and university-backed funds with proven track records and all investment returns would be recycled back into the respective funds for future investment in MI companies, ensuring long-term impact. The five established, evergreen funds include:
- ID Ventures at Invest Detroit
- Ann Arbor SPARK
- University of Michigan’s Accelerate Blue Fund
- MSU Research Foundation
- Western Michigan University’s Biosciences Research and Commercialization Center (BRCC)
“Innovative startups have the power to change lives—whether through medical breakthroughs or cutting-edge technologies—and they play a crucial role in driving Michigan’s economy forward. Gov. Whitmer’s signing of this bill into law today demonstrates our state’s dedication and foresight in supporting Michigan-founded startups,” said Kelly Sexton, associate vice president for research – innovation partnerships and economic impact at the University of Michigan, and chair of Ann Arbor SPARK’s board of directors. “Michigan is now making a bold statement: we are committed to fostering an innovation ecosystem where companies aren’t just founded here—they grow, thrive and create jobs right here in our communities.”
“The MI Innovation Fund is an important step toward keeping Michigan competitive in the innovation economy. Governor Whitmer’s leadership helps ensure that inventions developed here can grow and thrive here, driving long-term economic growth,” said Paul Krutko, president and CEO of Ann Arbor SPARK. “This is just the beginning, and we must continue building on this progress to support entrepreneurs and R&D across the state.”
In addition to supporting the early-stage evergreen funds above, the program will help establish and grow three new early-stage emerging evergreen funds around the state that will be located in Grand Rapids, Traverse City and the Upper Peninsula. In addition to supporting the early-stage evergreen funds the program will provide additional funding to key partners in the ecosystem that support startup companies, founders and funds.
The Michigan Innovation Fund’s investment in these funds will go a long way to creating evergreen, self-sustaining funds that recycle capital and provide long-term investments in Michigan startups. Many companies that get their start in this state have been forced to leave to follow investment capital in other states, increasingly to Ohio. The Michigan Innovation Fund will help provide critical early-stage funding and keep companies here in Michigan.
“The Michigan Innovation Fund is an exciting step forward for Michigan’s entrepreneurs. We are investing in our state’s talent and reinvigorating our entrepreneurial ecosystem by giving diverse and ambitious founders the tools and support they need to succeed,” said Patti Glaza, Executive Vice President of Invest Detroit and Managing Partner at ID Ventures, and an Ann Arbor SPARK board member. “This is the first program of its kind here in Michigan, and it’s going to drive successful innovation commercialization and economic growth in our state. None of this would have been possible without the incredible collaboration and support from Governor Whitmer, Lt. Governor Gilchrist, Representatives Farhat, Hoskins, VanWoerkom, and our coalition partners. Together, we’re setting a new standard for Michigan’s entrepreneurial future.”
