Capital
Capital. Funding. Money and so much more. Capital is the lifeblood of a start-up, because it fuels the growth phase. Capital matters, regardless of your stage in development. So whether you're just getting started or ready to launch, capital helps catapult your venture to the next level. Whether you need staffing, equipment, real estate, services or other resources, tap into local regional funding.
The Pre-Seed Capital Fund
The Pre-Seed Capital Fund: a collaborative effort of Michigan’s 15 SmartZonesSM, is an equity fund that invests in high-tech, high-growth start-up companies to support business formation and acceleration. Through this fund, eligible companies are able to receive an investment of $50,000 to $250,000 alongside a matching investment from another investor. Administered by the West Michigan Science & Technology Iniatiative.
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BIOTECHNOLOGY Business Consultants
The team at Biotechnology Business Consultants provides intensive business development, training and consulting to support early stage life science and technology companies.
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First Angels
Angel network making financial and intellectual capital available for early stage and growing entrepreneurial companies in West Michigan, primarily the Kalamazoo region.
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Arboretum Ventures
Early-stage venture capital firm specializing in the health care sector, focusing on investments in medical technology and health care services. Helps companies in strategy, operations, recruiting, fundraising and exit planning.
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Michigan Small Business and Technology Development
Headquartered at Grand Valley State University, the Michigan Small Business & Technology Development Center (MI-SBTDC) provides counseling, training and market research for new ventures, existing small businesses and innovative technology companies.
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Importance of Cash Flow
Byers explains that smaller companies need to pay extra attention on how they spend their cash because if they run out of cash, it is game over for them. Byers uses the example of Palm Inc. to show how well the company managed their cash flow.
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Venture vs. Customer Funding
Verma explains the different situations in which venture capital might be a better funding option, including the desire to scale quickly. He also points out some of the drawbacks as well.
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Michigan Emerging Technologies Fund
The Michigan Emerging Technologies Fund (ETF) is designed to expand funding opportunities for Michigan technology based companies in the federal innovation research and development arena. To that end, the Small Business & Technology Development Center (SBTDC) through the Michigan Strategic Fund (MSF) is dedicating up to $1.4 million to match federal funding opportunities for exceptional commercial opportunities in Michigan.
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Grand Angels
Angel network making financial and intellectual capital available for early stage and growing entrepreneurial companies in West Michigan, primarily the Grand Rapids and Lakeshore region.
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Arbor Partners
Venture capital firm helps entrepreneurs build lasting, growth companies. Invests exclusively in companies creating the next generation of enterprise software, semiconductors, and advanced materials. Also offers business-building resources to assist in the creation of companies.
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Lakeshore Advantage
Lakeshore Advantage is the economic development organization for the Holland and Zeeland, Mich. area and is the one-stop organization along the lakeshore for assisting entrepreneurs with getting their businesses off the ground. 201 West Washington Avenue Zeeland, MI 49464-1086 (616) 772-5226
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Grand Rapids Urban League Inc./Micro Loan Fund Pro
Programs are available for technical assistance and financial support for starting or expanding small business.
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EDF Ventures
EDF Ventures is a venture capital firm investing in early-stage health care companies. EDF focuses on young companies that are developing breakthrough technologies to address large, well recognized problems or transform existing markets. EDF partners bring a wealth of direct experience that is essential to guiding young companies through its start-up and high-growth phases to become mature, profitable companies.
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Disadvantages of VC
While entrepreneur and former Lotus 1-2-3 founder Mitch Kapor understands how selling finance can boost a burgeoning enterprise, his experience has also acquainted him with some of the disadvantages - mainly accountability and a forced schedule of progress. Here, Kapor outlines some of the many alternatives to the traditional VC paradigm, including self-financing and angel funding.
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Potential Financing Resources
This document is designed as a resource listing of financial sources that may be available for business projects. It is not considered a comprehensive list, and the Michigan Economic Development Corporation does not support or endorse these programs or organizations.
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Grand Rapids Area Community Foundation
The GRAND RAPIDS AREA COMMUNITY FOUNDATION is a trust—a collection of endowment funds that are contributed by individuals, corporations and community service organizations to benefit the geographical area of Grand Rapids, Minnesota. The Community Foundation is one of 700 community foundations in the United States. As a community foundation, it is a public charity whose purpose is to enhance giving, or philanthropy, in all sectors of the community. This means a partnering in philanthropy — giving to nonprofit community service agencies and charities and giving to develop and enhance new ideas and projects needed in the area.
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Momentum
Momentum is a Michigan-based venture firm investing in Web-based technology start-ups. Each year, Momentum hosts an open competition inviting high-tech entrepreneurs the chance to compete for first-round funding for further development of their ideas, to participate in 12 weeks of customized entrepreneurial training and to pitch their newly-developed innovations to second-round investors.
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From Angel to VC
Part of the responsibility of the angel is to help secure the VC round. Experienced entrepreneurs Ron Conway and Mike Maples lay out the blueprint for how they signal VC's about the emergence of new opportunities, and how a young operation with slow burn and trackable accomplishments is going to fetch the best investment firms.
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RPM Ventures
High-tech and information technology venture firm that primarily invests in seed and early-stage companies selling to manufacturing or automotive sector also companies based on novel technologies developed at Midwest research institutions. Assists in building sales pipeline, recruiting, strategy and product development and securing financing.
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All Financing Sources Are Not Equal
Most entrepreneurs would love to be in the position of having multiple sources eager to invest. However, when you dig beneath the surface you find that the choices are not easy. The decision about financing sources involves fundamental choices in deal structure, valuation, cost and even business strategy. These choices are a function of the different business and legal requirements/realities imposed by the financing source. Unfortunately there is not much written material available on the subject, but here are some of my observations:
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TGap Ventures LLC
TGap Ventures focuses primarily on early-stage investments throughout the Midwest, including medical devices, software, specialty manufacturing, Internet, telecommunications, health care, and other high growth companies. TGap works closely with portfolio companies on systems development, senior management recruiting, new customer contact, strategic partnerships and additional financings.
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What Does an Angel Investor Do?
Investors Mike Maples and Ron Conway explain their job like this: They help all lights turn green for the fast-moving car of the Internet start-up. In addition to cutting a check, these angel investors explain the panoramic view of what a good investor offers, including bringing in the right talent and business sensibilities, and building and testing product prototypes.
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Why Take Venture Capital
Roizen talks about her experience in taking venture capital. She learned that if one can use venture funds judiciously to raise the inflection point, then it makes sense to do it. For her, it was an economic decision. Other reasons to take VC money involve credibility issues. Customers want to see that you have partners and money in the bank to prove that you will be around, she says.
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North Coast Technology Investors LP
North Coast invests in early-stage technology-driven companies with outstanding growth prospects in the Midwest. Most investments North Coast makes are in companies where an entrepreneur, an emerging technology and a promising market opportunity are identifiable and consistent with the venture model. North Coast will invest in seed stage and start-up companies.
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Guy Kawasaki on Funding
Kawasaki talks about two examples of early-stage funding, bootstrapping and venture capital, and the benefits and drawbacks of both. Ultimately, he believes that too much money is worse than not enough money, and that both methods can be successful of a smart approach is taken with the funds that are received.
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Venture or Corporate Investment?
VC's give entrepreneurs money and want to get a lot more of it back sometime in the future, Roizen says. Unlike VC's, corporate investors generally want an early view into the technology and sweet deals from a business development perspective.
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Michigan Accelerator Fund
The Charter Group, a Grand Rapids, Mich. based business broker, has formed with the Michigan Strategic Economic Investment & Commercialization Board to launch a new, $10m fund, to be named The Michigan Accelerator Fund I. The state government has invested $6m and it is hoped this can be used to leverage inbound investment from local investors, to bring the fund up to its target of $10m. It is planned to invest seventy percent of the new fund into life sciences companies, with the balance going to advanced manufacturing, homeland security and alternative energy. Dale Grogan, co-managing director for Michigan Accelerator Fund I, said “It’s a tremendous opportunity. Now if we do our jobs right, we can generate great returns, not only for the state but for the other investors. We just feel like we have a tremendous responsibility. The burden is on us to represent West Michigan appropriately and do our jobs.” Formation of the fund has been supported my many Grand Rapids educational establishments, including Grand Valley State University, Michigan State University, West Michigan Science & Technology Initiative and the Van Andel Research Institute. Investors Grand Angels, The Right Place Inc., Lakeshore Advantage and Hope River Ventures also all helped to set the fund in motion, which over and above the $6m seed funding, already has an additional $1.25m committed.
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