DETROIT, June 5, 2019 /PRNewswire/ -- Invest Detroit Ventures (ID Ventures) announced that it has received significant philanthropic support to begin the effort to turn its First Capital Fund into a sustainable, evergreen fund that will support early-stage Michigan startups for years to come. With $3 million from the Ralph C. Wilson Jr. Foundation, $2.5 million from the Michigan Economic Development Corp. (MEDC), and $11 million in assets funded to date, ID Ventures kicks off a fund-raising effort to pool enough philanthropic support to create a sustainable source of early capital for Michigan's diverse, under-represented entrepreneurs and technology start-ups committed to bolstering the local economy.
"This initial support from the Ralph C. Wilson Jr. Foundation and the MEDC is truly exciting and exemplifies the dedication of the state and local funding community to supporting Michigan growth and innovation," said David Blaszkiewicz, president and CEO of Invest Detroit. "As an organization committed to economic health and job creation in the region, we are grateful to our partners for supporting our efforts to bring critical resources to local entrepreneurs and career opportunities for residents."
Though ID Ventures has been doing seed investing since 2010, the First Capital Fund launched in 2017 with $3.3 million in funding from the MEDC, the New Economy Initiative (NEI) and Invest Detroit.
"It has since been overwhelmed with requests for funding, receiving over 300 applications since inception — a trend we anticipate will continue in the coming years," said Patti Glaza, senior vice president and managing director at Invest Detroit Ventures. "With demand rising and availability of local seed capital extremely limited, we recognize a need to build greater funding capacity and to fill this critical funding gap today and into future decades."
The fund will focus on seed funding for technology start-ups with high-growth potential that can grow the economy and create local job opportunities.
"Successful start-ups are helping to grow our local economy by creating jobs and spurring greater diversity and innovation among Southeast Michigan's businesses," said Lavea Brachman, vice president of programs at the Ralph C. Wilson Jr. Foundation. "We are excited to support the work of Invest Detroit Ventures to supply the seed capital that funds early firm development and creates the basis for long-term growth."
The team continually hears from start-ups that there is a lack of venture funding at the earliest stages in Michigan, and that it takes too long to raise additional syndicated funding – a challenge reported across the state as most local venture capital firms concentrate on later stage investment. In fact, the Michigan Venture Capital Association (MVCA) reports that only 7% of Michigan venture capital is invested at the seed stage. This creates a significant gap in funding for pre-seed and early-seed companies – a gap that the fund strives to fill.
"The clear demand for early capital, the industry trends indicating continued entrepreneurial growth, and the important role of start-ups to our economic growth prompted the Invest Detroit Venture team to strategize how to better meet the needs of more start-ups," said Fred Molnar, vice president of entrepreneurship and innovation at the MEDC. "This is a critical goal, and we are proud to help initiate the creation of a self-sustaining fund with greater capacity and an indefinite lifespan to support Michigan-based startups well into the future."
To learn more about Invest Detroit Ventures, visit www.investdetroit.vc.
About ID Ventures
Invest Detroit Ventures, the venture team of Invest Detroit, supports promising Michigan-based high-tech start-ups through investment capital and programs that strengthen the start-up ecosystem. As a collaborative investor and community partner, its approach is to provide inclusive access to resources for Michigan entrepreneurs with high-growth potential.
About Invest Detroit
Invest Detroit is a nonprofit lender, investor and partner that supports business and real-estate projects that will ignite economic growth in Detroit and the region. Its goal is to increase density and job opportunities in a way that is strategic and inclusive.
The Michigan Economic Development Corporation is the state's marketing arm and lead advocate for business development, job awareness and community development with a focus on growing Michigan's economy. For more, visit www.MichiganBusiness.org. For Pure Michigan tourism information, your trip begins at www.michigan.org. Join the conversation on: Facebook, Instagram, LinkedIn and Twitter.
About the Ralph C. Wilson Jr. Foundation
The Ralph C. Wilson Jr. Foundation is a grantmaking organization dedicated primarily to sustained investment in the quality of life of the people of Southeast Michigan and Western New York. The two areas reflect Ralph C. Wilson Jr.'s devotion to his hometown of Detroit and greater Buffalo, home of his Buffalo Bills franchise. Prior to his passing in 2014, Mr. Wilson requested that a significant share of his estate be used to continue a lifelong generosity of spirit by funding the foundation that bears his name. The foundation has a grantmaking capacity of $1.2 billion over a 20-year period, which expires Jan. 8, 2035. This is consistent with Mr. Wilson's desire for the foundation's impact to be immediate, substantial, measurable and overseen by those who knew him best. For more, visit www.rcwjrf.org.
SOURCE Invest Detroit Ventures