Michigan Creates $6.8 Million Fund for Tech Startups

Economically speaking, the scoop concerning Michigan typically makes a speciality of the purported death of Detroit.

To counter that negative trend, the Michigan Economic Development Corporation (MEDC) is hoping to spearhead some new growth among high-tech startups. The Michigan Pre-Seed Fund 2.0 is really a continuation of a prior effort. It is going to provide $6.8 million. That’s $5.8 million to high-tech startups within the state and another $1 million to assist universities transfer technology to the marketplace.

A previous Pre-Seed Fund invested $20 million in 90 firms beginning in 2007.

The money to fund Pre-Seed Fund 2.0 comes from the general public sector. The initiative is being managed by a personal firm called Invest Michigan. Invest Michigan President and CEO Charlie Moret says his company’s goal is to profit lessons from the primary version of Michigan’s Pre-Seed Fund and make smart investments.

The idea is to take a position in private companies which can be barely off the floor. Moret told Small Business Trends in a contemporary interview that the goal is to back people that will eventually pay back the investment. This may make Pre-Seed Fund 2.0 an “evergreen” fund continuing to speculate in new startups into the longer term:

“We may be that sort of catalyst to drive these companies. an immense part of the evaluation process is – are these companies going to be sustainable? We’re searching for people with one of the most viable marketing strategy.”

Invest Michigan hopes to discover tech startups in among the following areas: advanced automotive, manufacturing and materials, agricultural technology, alternative energy, homeland security, information technology, and life sciences.

New funding becomes available in May first for corporations that missed their chance to use for the former Pre-Seed Fund. Then the funding might be open to applications from new tech startups by June.  Moret says companies applying for potential seed money from the fund will hear their fate within 45 days.

In an announcement announcing the fund, MEDC Vice chairman of Entrepreneurship and Innovation Paula Sorrell said:

“These Pre-Seed Funds are intended to aid innovative companies take those last steps to become commercially viable and more attractive to personal investors. With the wealth of entrepreneurial talent we’ve got in Michigan, we wish to ensure good ideas become businesses that help expand and strengthen the state economy.”

Michigan Photo via Shutterstock

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