TRAVERSE CITY — A local start-up and entrepreneurial hub will get a $1.6 million boost from the state’s new Michigan Innovation Fund.
20Fathoms based in Traverse City received a slice of $60 million awarded this week to eight recipients around the state for early-stage and emerging evergreen venture funds that support entrepreneurial and business start-up efforts in Michigan.
Gov. Gretchen Whitmer announced the awards Monday from the Michigan Innovation Fund that was signed into law earlier this year with bi-partisan support from state lawmakers.
20Fathoms is among three emerging evergreen funds that received $1.6 million in the state funding. The others were InvestUP regional economic development organization based in Marquette, and the Grand Valley Research Corp. located at the university campus in Allendale.
“This is obviously a great day for entrepreneurs across the state of Michigan, including those here in Northwest Michigan,” said Craig Wesley, 20Fathoms’ executive director. “For Traverse City to be included in this type of funding is really important, and shows that we’re really being recognized at the state level.”
Larger amounts of $10.6 million went to existing evergreen funds around the state, including ID Ventures, Ann Arbor Spark, the University of Michigan Accelerate Blue Fund and the MSU Research Foundation. Another $5.3 million went to the Western Michigan University Biosciences Research and Communication Center.
Warren Call, president and CEO of Traverse Connect, which is a regional economic development organization based in Traverse City, said a group of organizations from Northern Michigan and the U.P. lobbied to include emerging funds and business incubators like 20Fathoms and InvestUP in the funding mix for the new Michigan Innovation Fund.
“We started talking to the lieutenant governor (Garlin Gilchrist) about this about a year and a half ago,” Call said. “We worked hard to get the language inserted into the legislation to include funding for these newer organizations.”
Call said he’s glad to see the state putting more resources toward business innovation and start-up assistance efforts, which diversifies and bolsters the statewide economy.
“From our perspective, Michigan needs to strengthen its innovation economy to catch up with some other states that have gotten a bit ahead of us,” Call said.
Supporting organizations like 20Fathoms that can provide technical assistance, business services and physical spaces for start-up and tech companies is critical to that goal, he said.
“They bring people together that can foster the growth of these new companies,” Call said.
20Fathoms has launched numerous initiatives to help start-ups and entrepreneurs with their operations, including weekly breakfast labs, coaching and mentorship programs, legal assistance and coaching and networking programs. It’s also expanded its programming to offer those services across the region, and also took over operation of the TCNewTech pitch competition.
Wesley said the new state funding is specifically for supporting start-ups, founders and funds, and 20Fathoms will be developing programs and staff to target those efforts.
“The access to capital is really an important piece of what entrepreneurs need to be successful,” he said. “We’ll be putting the infrastructure in place to execute that down the road. …What we’re involved in is really community building, and we think innovation is a great community asset.”
State officials said the remaining $7.2 million of the total $60 million appropriation will be used for entrepreneurial support programs and a pitch competition that’s accepting applications through noon today.
Applications received after that and by Aug. 8 at noon, will be reviewed as part of a second and final round, pending availability of remaining funds. More information on applying for the remainder of funds is available on the Michigan Innovation Fund website.
The law specifies funding be divided across certain organizations, and this round includes $48 million for existing evergreen venture funds with a longstanding record of successful investment. The $4.8 million for emerging evergreen funds include organizations with a solid base of support that are newer to the entrepreneurial ecosystem.
Additional fund recipients will be announced at a later date for those who are not affiliated with a higher education system or local economic development organization, state officials said.
“Michigan is a state of makers and doers, and we established the bipartisan Michigan Innovation Fund to unleash their entrepreneurial energy and keep growing our economy,” Whitmer said in a media release announcing the awards. The governor noted that Michigan was recently ranked as the No. 6 state in the country for doing business by the CNBC business network. That is the state’s highest-ever ranking in this regard.
“(The) awardees will harness these new resources to continue pursuing their big ideas in Michigan, leading to more jobs, more companies, and more investments in our communities,” Whitmer said. “We will build on this momentum by continuing to empower Michigan innovators and make our state the best place to have an idea and build something real.”