The Michigan pre-seed capital fund allows technology companies that are just beginning to receive funds to help assist their growth and development. The fund allows entrepreneurs come to the table with funds and have those funds matched by the Pre-Seed Capital Fund. Skip Simms, fund manager, tells us that this is a very unique capital fund. Many areas of the country do not have such a fund and have approached the Michigan Pre-Seed Capital Fund for guidance on setting up their own funds.
Many companies got out of investing in early-stage companies after the tech bubble burst in 2001. Early-stage companies are those companies that have not had a round of funding and are seeking funding to help bring a product to market. These rounds of funding are typically small. These investors who started to avoid early stage rounds of funding wanted to concentrate their funds on companies that came out of the embryonic stage and had a solid foundation. Skip refers to these types of investments as up-stream investments.
This was my first time reviewing anything of this nature. I’ve always wondered how funding was sought after and awarded. I have become more aware of the different types of funding that are out there. This is the first glimpse I’ve seen of a fund being a collaborative effort between government, industry and academics. Then again, I haven’t seen many funds.
I am excited to see this type of opportunity given to entrepreneurs in the State of Michigan. I was a resident of the State of Michigan for 29 years I relocated to New York City. I know that I will champion the State of Michigan in my new home, both in spirit and in deed. I can let people know about these types of opportunities in a city that is known for opportunities.
One thing that concerns me is the low amount of business clusters this can be available to. I am concerned about the lack of pure information technology categories that are qualified for funds. Many creative and young people that are leaving the State are pure programmers or visual and creative designers. These types of people do not want to be in an unsexy automotive or homeland security type operation.
The over designation of “Advanced automotive” is unsettling. Most of the news in the state is focused on the automotive industry crumbling before our eyes. Many young people believe that these companies are reaping the product of a corporate culture that protects “position” over “innovation” and talent. There is no creative or fiduciary incentive for these individuals to contribute to this industry as a supplier or an employee. Doing so would be almost un-tasteful.
Furthermore, nanotechnology makes a brief bullet point appearance under “Advanced Automotive”. This is the over-designation that is hiding some of the more interesting aspects of this pre-seed fund. Nanotechnology is a much more sexier technology for creatives to follow. Why is it hidden under automotive and manufacturing? Nanotechnology should stand out on it’s own.
Lastly, why do we not hear about this? It’s possible that commercials for this fund have been on WWJ but much of the energy that SPARK and SmartZONE is seeking is possibly listening to other forms of media. Not to be trite but advertising these types of things on modern rock stations might enlist a younger more creative energy to help out in Michigan.
Overall I’m glad to see something like this happen in Michigan. I’ll be exploring the other structures of support for new business in the coming future!