Author: ID Ventures

Learn more about our activity in 2021 and meet a few of the new exciting Michigan companies we added to our portfolio.

Read report.

Early startups and small businesses have been hit incredibly hard by the pandemic. So this holiday season, we encourage you to support early-stage startups and small businesses in Michigan so that our region’s entrepreneurs and our state’s economy can survive this incredibly challenging time.

We encourage support of all of our state’s startups and small businesses, but here is a list of the consumer-facing startups that we have supported through our funds here at ID Ventures. And if you are in the Detroit area, our colleagues at Invest Detroit have put together this list of other small businesses that could use your support.

Thank you for doing what you can to support our local businesses this year.

Ash & Erie

Banza

Bloomscape 

Ellis Island Tea 

MoreGolf

by Allison Murdock, Analyst, ID Ventures

This week, 51 years ago, Nina Simone recorded an anthem dedicated to Black youth across the world, “To be young, gifted, and Black.” The powerful lyrics, written by poet, Weldon Irvine, are confirming reminders to the Black community of their excellence and their ultimate impact on the future of this world. To be young, gifted, and Black is to exist in a world where structural barriers to social and financial opportunities suppress equitable development for our success.

During college I began exploring a career in venture investment and startups, and I am now continuing that pursuit here at ID Ventures. Before this, my only immediate points of reference for entrepreneurship were stories of my Jamaican grandmother’s housekeeping business she had dreams of starting, as well as the peers, friends, and family I knew starting and running small businesses. Not once did I think I knew the next Eric Ryan, co-founder of Method, or Steve Jobs, co-founder of Apple. For all I knew, achieving such success boiled down to being a white, male genius. I learned quickly that there was no special formula to becoming a successful founder, but there was a special advantage. A mix of knowledge, social and financial capital, and an intersectional profile identical to that of the investors and founders of past successes has created a veiled loophole that keeps investments in Black founders to a minimum.

In spite of the odds stacked against us, Black entrepreneurs and those interested in startups are embracing failure and taking nontraditional risks. The desire to support these entrepreneurs led me to ID Ventures.  The team has been and continues to be committed to filling the glaring gaps that exist in the entrepreneurial ecosystem for Black founders across Michigan and in Detroit, the most densely Black-populated city in the U.S. Black and other underrepresented founders are often forced to look for funding prior to demonstrating proof of viability, which often leads to frustration with the investment community when they are told to come back when they are ‘further along’. The funding stage that fuels the initial post-idea/pre-MVP  (minimal viable product) stage is a round in which close friends and family give the founder a considerable sized-investment to fund the development of the founder’s idea.

We as a team recognize the systemic barriers which create a social and financial capital disadvantage for underrepresented founders. This is why we have recently created the Catalyst Fund – a new fund that will support Black, Latinx, Native American, and immigrant founders or founding teams in this critical early stage to help overcome this initial barrier of early product development. The Fund will invest between $10-25k in 4-6 startups each year while also providing social capital by assigning one IDV team member to act as a champion for the company and co-design an “execution sprint” for 3-6 months, measuring mutually created quantitative and qualitative execution milestones. After the end of the 3-6 month sprint, team members will evaluate progress, reassess market opportunity, and will help with the plan to move forward.

Diversity of thought and awareness of systemic biases in the venture industry is the first step to paving a pathway for underrepresented founders to receive funding and ecosystem support. At ID Ventures, the diversity of thought on our team and in our networks is fundamental to our ability to source and relate to overlooked and underfunded founders. The Catalyst Fund proactively targets founders and talented founding teams who would benefit from a supportive ecosystem to catapult them to the next level of funding.

To the overlooked founder, ID Ventures sees you and we recognize the conditional rules to venture capital that polarize investments. We are on the dawn of change—to be Black, supported, and backed is a tune we and investors will all know.

Martin Dober and Patti Glaza from our ID Ventures team write about COVID-19’s impact on Michigan startups, their importance to our economy, and what we are doing to help.

As you know, many Michigan small businesses are struggling to survive the economic crisis caused by the COVID-19 pandemic. Fortunately, many programs have been quickly created to support these businesses through the support of federal, state, philanthropic and individual donors. While the other programs within Invest Detroit are finding ways to support and amplify these efforts, the ID Ventures team is focused on helping Michigan’s tech startups that are also vulnerable to the current crisis.

Tech startups have a big impact on Michigan’s economy, and as more of them are created and expand, they bring tech job and entrepreneurial opportunities for Michiganders who might otherwise look to the coasts for career advancement. Our funding focus is early-stage startups—those that have created businesses, secured some initial investment, and need support to hit milestones that will drive investments from larger institutions. The success of startups in this phase is already vulnerable, but now with funding cycles on pause, sales declining, and efforts shifting to find ways to work from home, these job and density creators are in jeopardy. To help, we are taking two primary approaches.

Our first is to do what we can to support our current portfolio. ID Ventures has active investment capital in 64 early stage startups across the state, many of which started feeling the impact of this downturn early on. Though we are still considering investment in new companies, we are ensuring that we are maintaining enough capital for follow-on funding to those who need it. Additionally, we are leveraging our relationships with industry experts to help with issue-specific challenges that come up, while also connecting these companies with each other for shared problem-solving.

Secondly, with generous funding from the Michigan Economic Development Corporation, we have launched the Tech Startup Stabilization Fund to support a broader reach of Michigan startups that are also struggling to survive through the crisis. While we are still fundraising to grow the impact of the fund, our current goal is to provide one to three months of cash runway to eligible companies that need urgent investment. Since launching the fund on April 16, we have received almost 200 applications that our small but mighty team of five is working hard to process and respond to.

We have yet to understand the ongoing timeframe of the current situation and its long-term impact, but strategy and flexibility are at the core of our work, and we will remain nimble and adaptive to any new challenges our hardworking startups might face.

Ashwin Puri on our ID Ventures team introduces us to one of their new portfolio companies–a Michigan startup that is bringing more choice and less expensive options to employer-paid medical plans.

ID Ventures invests in Michigan startups across a wide range of sectors, and a trait our portfolio companies have in common is looking to improve the way their industry does business. With some of the top universities, forward thinking companies, and a lot of Michigan determination, our state has a wealth of innovative minds and startups that are making a huge impact across a number of fields.

One of those innovative minds belongs to Ameeth Reddy, founder of Equal Health — a company looking to significantly improve the quality and cost of employer-paid health care through offering Direct Primary Care (DPC) memberships. DPC has emerged as a trend in primary care because of its simplicity for both doctors and patients. Instead of billing through insurance for primary care services, patients pay a monthly membership fee (and no copays) for unlimited access to their doctor and receive same-day appointments, longer and more personal visits, and discounts on tests and prescriptions.

We got to know Ameeth (pictured above) through Detroit-based startup studio Assembler Labs, which was founded in 2018 by formerly Seattle-based entrepreneurs Ian Sefferman and Patrick Haig. Assembler partners with outstanding founders like Ameeth to build startup companies and spin them out to raise independent capital, while providing operational and technical support.

There are two primary challenges that Equal Health is working to solve: cost and choice. For employers, healthcare costs are the second highest operating expense, directly after payroll, and many of their health plans have limitations on health care provider selections. This limited choice for employees often directs them to large facilities with less expediency and personalized attention. There are many independent DPC doctors who can offer this personalized attention and help employers contain costs, but they have trouble connecting and working with larger employers because of capacity and HR constraints.

Equal Health is making it possible to connect employers with local, DPC doctors to bring down their health care costs and  provide more freedom to employees. This means improved access, more personalized care, and faster appointments. Providing the opportunity for employees to have more agency over their health care options means happier employees and better productivity. Their goal is take this concept nationwide.

We are excited to welcome Equal Health into our portfolio of companies. As the company is still in an early stage, we are working to connect Ameeth with investors and potential clients to help scale the company to reach its national goals. For more information on Equal Health, visit their website at https://www.tryequal.com/

Accelerate Michigan Innovation Competition Announces EVOQ Therapeutics as Grand Prize Recipient

Attendees Celebrate 10 Years of Critical Funding and Support for Michigan Startups

Detroit, MICH. – Nov. 13, 2019 – Accelerate Michigan Innovation Competition (AMIC), a program of Invest Detroit’s ID Ventures, today announced EVOQ Therapeutics was selected as the grand prize recipient at the tenth annual pitch competition. The pitch competition celebrated the 10 year anniversary of the pitching competition, which provides critical funding and support for Michigan startups.

“We are thrilled to celebrate the 10 year anniversary of AMIC,” said Martin Dober, senior vice president and managing director of ID Ventures. “This significant milestone highlights the dedication of Michigan’s entrepreneurial ecosystem to fueling the growth of startups. With their support, startups have been able to receive the critical funding and support they need to build innovative, high-tech companies in the state.”

ID Ventures and its top sponsors Ralph C. Wilson, Jr. Foundation, Invest Michigan, William Davidson Foundation, Michigan Economic Development Corporation and Belle Michigan Impact Fund, among other corporate and startup leaders across Michigan, awarded nearly $1 million in cash to eight innovative startups that were selected from 24 semi-finalists. Nearly 400 top investors, entrepreneurs and community leaders attended the event at the State Savings Bank in Detroit, MI.

2019 AMIC Award Recipients:

• Grand Prize – $350,000: EVOQ Therapeutics
• Second Prize – $150,000: DeepHow
• Third Prize – $50,000: Pivot
• Woman-Led Prize – $150,000: Pivot
• Industry 4.0 Prize – $25,000: BrandXR
• People’s Choice Prize – $10,000: PassiveBolt
• 10 Year Anniversary Prize – $10,000: Pivot

AMIC enables entrepreneurs to showcase their companies and meet one-on-one with fellow entrepreneurs, investors, business acceleration resources, and experts in their specific sector during carefully curated meetings. This year, AMIC was proud to facilitate 240 meetings with more than 100 entrepreneurs, investors and subject matter experts.

Since its launch in 2010, AMIC semi-finalists have created over 1,500 jobs and attracted more than $1 billion in additional investment.  Previous awardees include Vertecore (2018),  Orbion Space Technology (2017), SPLT (2016), Banza (2015), SkySpecs (2014), VNN (2013), Algal Scientific (2012), Celsee (2011), and Armune BioScience (2010).

For more information about AMIC and its sponsors, please visit www.acceleratemichigan.com. Share the news by using the event hashtag #AccelerateMICH and follow @AccelerateMICH on Twitter and Facebook.

To see the video highlighting AMIC’s mission and 24 semifinalists, visit our Facebook link.

About Accelerate Michigan Innovation Competition

Accelerate Michigan Innovation Competition, a program of ID Ventures, is a competition that supports Michigan’s entrepreneurial ecosystem by offering entrepreneurs the opportunity to showcase their companies to investors while building connections with entrepreneurs, business acceleration resources, and experts in their sector during carefully curated individual meetings. For more information, visit www.acceleratemichigan.org.

About ID Ventures

ID Ventures, the venture team of Invest Detroit, supports promising Michigan-based high-tech startups through investment capital and programs that strengthen the startup ecosystem. As a collaborative investor and community partner, our approach is to provide inclusive access to resources for Michigan entrepreneurs with high-growth potential.

Press Contact:

Randy Hyde, Invest Detroit

Randy.hyde@investdetroit.com

Sam Ging, Program Director of ID Ventures’ Hacker Fellows Program, talks about how the program keeps startup talent in Michigan by supporting junior developers and the companies they work for.

I’m Sam Ging, Program Director of Hacker Fellows, a program that aims to keep talent in Michigan by matching aspiring software engineers and future entrepreneurs with startups across the state. The program is part of Invest Detroit’s venture arm ID Ventures and helps to achieve our mission of supporting the larger Michigan startup ecosystem. We believe that by supporting startup businesses, we can help create job opportunities for Michigan residents so that junior level tech talent doesn’t need to leave the state for career growth.  

The reason for Hacker Fellows is simple. Startups, especially startups in Michigan, struggle to attract and retain top talent because they are strapped for resources in their early days. We’ve learned that very early-stage startups with less than ten employees are most likely to hire junior level tech talent. Additionally, junior developers in Michigan have trouble finding startup opportunities close to home. So we put the two together and support them both–providing startups with salary support and helping junior developers find the opportunities. 

We recruit junior level software talent, students and recent graduates from across the state and country, with an eye on adding diversity to the field. Then we get them ‘startup ready’ through extensive software/entrepreneurial training and match them with Michigan-based startups. Some of these employers have standout brands, some of them are unknown but doing amazing work. We’ve found that this is our community’s most valuable asset when attracting and retaining talent in Michigan. Students not only choose to join Hacker Fellows for full-time entry-level opportunities, but to enter the growing Hacker Fellows community of 100+ highly creative, like-minded technologists and future entrepreneurs. Community is what keeps talent in Michigan, developing their careers. And it’s working:

• 83% of our developers are still in Michigan working within tech sectors
• We’ve grown our application rate by nearly 750%
  

One of those applicants was Vladimir Jojo Otchere (Vlad) who joined the program in 2019 after receiving his degree in Computer Science from Michigan State University. After our training bootcamp, Vlad went to work for Pocketnest in Downtown Detroit as their first technical employee and is currently building their mobile/web financial planning solution. He decided to join Hacker Fellows for two reasons, to stay in Michigan after graduation and work for a startup. For him, working for a startup means that he has direct access to his manager and CEO without having to deal with the corporate ‘red tape.’ Read his recent blog on the Hacker Fellows’ site.

For the employers, we’ve created a recruitment platform and a refined pipeline of developers to make it easy for them to find valuable and trained candidates. In addition, we provide salary support to employers who hire from the Hacker Fellows program. Close to 100% of our hiring partners say the main reasons why they link up with Hacker Fellows is to access our high-quality talent network and their increased ability to build relationships and collaborate within the tech and investment community. 

By supporting both the employers and the career-seekers, we are able to build a strong community of passionate technologists and employers to uplift our ecosystem. But ultimately, we are driven by the strong belief that Michigan has the potential to be a major destination for high-tech startups that can benefit from our wealth of talent. Startups can have a tremendous impact on our state’s economy, and we want to help to ensure that both employers and employees in Michigan have a chance to thrive.

Martin Dober, managing director of Invest Detroit Ventures, talks about the challenges of Michigan startups looking for early-stage investment and support, and how our team is working to solve them.

Invest Detroit Ventures (ID Ventures) is working to raise philanthropic and government support to turn our First Capital Fund into the state’s first evergreen seed fund. What does that mean? It means that we are aiming to build the fund to be large enough that we can significantly grow the portfolio so that the returns coming in from those investments can cover new investments (cash flow “in” will be greater or equal to cash flow “out”). That can only happen when the fund gets to a certain size and when there are enough portfolio companies to increase the odds of getting some major returns.

Why is this important? Because seed investing is hard. The risks are much greater and time frames for returns are much longer. Technology risk, market risk, execution/team risk, financing risk, business model risk, regulatory risk—these are just a few that investors have to stay focused on. But in backing a good team, early investment can eliminate some of those risks and help companies hit milestones that will drive future, larger venture capital funding rounds.

In Michigan, most of the early seed investing is currently done by state or foundation-backed nonprofit funds, university funds, or first-time venture funds. Venture capitalists have the advantage over most entrepreneurs in Michigan, since we’re not fighting each other for deals. With a general lack of venture capital in Michigan, VC’s have their pick of where to invest, and as a result, it just makes it easier to focus on deals where some of the early risks have been reduced. There is an understandable tendency for Michigan funds to move to later stages, but this means that the gap for seed financing grows larger.

Currently, the First Capital Fund makes investments of up to $250,000 to early seed-stage startups across Michigan. In a little more than two years, the fund has backed more than 30 companies. It is a revolving fund, where returns are reinvested into additional companies and used to support operations. To date, the fund has been supported with $8.8 million from partners that include the Michigan Economic Development Corporation, the Ralph C Wilson Jr Foundation, New Economy Initiative (NEI), and Invest Detroit Foundation. We’re also taking returns from $10 million of investments from our prior funds and revolving them into this fund, bringing the total assets under management for the First Capital Fund up to $18.8 million. Unlike traditional venture capital funds, there is no carry and no fixed (i.e. 10-year) term.

By increasing the size of the fund to make it evergreen, we can turn it into a sustainable, persistent source of funding for Michigan startup companies in all technology sectors, continuing our commitment to inclusivity by funding and mentoring entrepreneurs from under-represented populations, including woman, minority, and immigrant founders. Additionally, it will be a more patient source of capital for startups, as it is not locked into the same 10-year time frame as most venture capital funds. It fills a crucial gap for early stage funding and offers a recognized, go-to source of seed capital for entrepreneurs.

It’s not an impossible task. We’re over $18 million toward our $30 million fundraising goal that we believe will successfully turn the First Capital Fund into the sustainable model we envision. And we’re the organization to do it. ID Ventures is supported by a great team with over 40 years of combined seed financing experience. We have a track record of helping companies hit the milestones they need to raise larger rounds of venture capital, and we provide additional support programs like Hacker Fellows and Accelerate Michigan Innovation Competition. We believe in the innovation and the talent that exists here in Michigan, and we know we can help our entrepreneurs and startup community succeed.

‘Tember Shea, portfolio manager at ID Ventures and pictured here (far left) with the full ID Ventures team, explains her role and comes out as a podcast star—interviewing some of the most exciting tech companies in the state.

ID Ventures is the venture capital arm of Invest Detroit. We are one of the most active venture capital investors in the state with deep and established relationships both locally and nationally. Our team has a unique knowledge of deal flows across the state and it positions us to help Michigan startups scale. Our work is based on the philosophy that while we cannot invest in every entrepreneur we meet, we can provide assistance to every one of them. And we do!

My role on the team is to actively support our portfolio companies. This includes monitoring growth and working with our companies to help improve their opportunities for success. We do this with a network of mentors and advisors, ecosystem partners, board members, and point-in-time assistance. We work with entrepreneurs to identify resources and talent to help enable faster growth. I am extensively engaged in the community, participating in start-up events and programs that assist early-stage, high-tech and high-growth companies throughout the state.

In addition to supporting our portfolio companies in more traditional ways, I also appear on a local podcast each month to feature our companies. The series is called the M2 Tech Cast. The M2 Tech Cast is a digital resource for entrepreneurial and technology news, insight and community throughout Michigan. Stories chronicle the people and businesses driving technology in the state. Visibility is important to startups, so they can continue to grow, hire local talent, and attract more investment.

I wish I could choose a favorite, but as any smart parent would tell you, they don’t have one. I couldn’t possibly single out any one company or founder as my favorite. They are all so amazing, I wouldn’t know where to start. I will tell you all of them have unique, interesting and compelling tales to tell, and you should learn more about all of them. You can check some of my interviews out here:

• Ripple Science, CEO, Peter Falzon
• Shoptelligence, Founder & CEO, Laura Khoury
• Priva, Co-Founder, Dagan Mishoulam
• Alerje, Founder & CEO, Javier Evelyn
• My Swim Pro, Co-Founder & CEO, Fares Ksebati
• Mi Padrino, Founder & CEO, Kimberly Gamez

Be sure to follow us on social media, InvestDetroitVC, Invest Detroit Ventures, where we’ll post future episodes. Thank you for supporting Michigan entrepreneurs, and I hope to see you out in the community soon!

We asked Geraldine Chi, office manager at Autonomic’s Detroit office, what her favorite thing is about the Hacker Fellows program. Her answer: that it’s building a network of startups, students, and recent graduates all working together to better our local entrepreneurial community. As a company that is building the first open cloud-based mobility platform to create a more efficient and sustainable transportation network in the Motor City, this answer makes a lot of sense.

When Autonomic, headquartered in Palo Alto, opened its Detroit office in 2017 to work within the city most famous for mobility innovation, it was important to them to be a part of the community in more meaningful ways. “Don’t get me wrong, we’re a driven team that wants our company to succeed,” stresses Sylvia Fronczak, one of the software engineers at Autonomic. “But we’re not here just for our own gains. We want Detroit to prosper. We want our communities to flourish. In order to fulfill that social responsibility, we need to look out for more than just ourselves.”

Partnering with ID Venture’s Hacker Fellows Program was a natural fit. The program supports the career efforts of emerging tech talent by offering paid fellowships and internships with Michigan startups and providing salary support to participating companies. Each year the program accepts 15 fellows and 10 interns all looking to build startup careers that bolster our region’s economy. The program offers training, mentorship, and hands-on experience for young people who may have otherwise left the state for opportunities on the coast, leaving local companies struggling to find local talent.

Supporting the local startup ecosystem is important to Autonomic because, as Geraldine puts it, “when it comes to startups, a rising tide definitely lifts all boats. Giving people the opportunity to invent themselves in the tech community, providing them with experience and education, this creates a diverse, local network that improves creativity.”

Autonomic has been a great partner to the Hacker Program in a short amount of time. They assisted in the training efforts of the 2018 fellows by hosting a day-long session where participants could work together by finding creative solutions to real life challenges, guided by Autonomic’s team of expert developers. Additionally, they recently hired their first fellow, Jeseekia Vaughn—a Detroit native, engineering graduate from Wayne State, Chairperson of National Society of Black Engineers and a self-taught developer. And generously, they have donated the $15,000 stipend they would receive back into the program. “Hosting the fellows for a day was energizing! You can feel the motivation and excitement that they put into ideas. And being able to bring on someone as talented as Jeseekia to our team is an added bonus,” Sylvia adds. “Having her here means access to new insights and fresh ideas.”

From everyone at ID Ventures and the Hacker Fellow Program, thank you to Autonomic and all of our partners for your support of this growing network of Michigan innovators. We look forward to strengthening this growing network in the coming year and providing support to our budding, local talent and startups.