Early-stage startups may soon have more access to venture capital in Michigan.
A bill introduced in the state House would set aside $105 million for companies in the early stages of development.
Patti Glaza is with ID Ventures. The firm is one of five Michigan venture capital firms managing the new program. Glaza said it’s important to invest in these small businesses so they can take off and keep jobs and entrepreneurs in Michigan, she said.
“They’re starved for money and it takes three times as long to raise half the money as it does in other areas,” she says. “Michigan is far behind in filling the gaps where the private market doesn’t exist. The risks are too great.”
Glaza said Ohio has invested far more in venture capital for small startups than Michigan over the past decade, and the state currently has four well-funded venture capital funds. Each fund has about $100 million to help entrepreneurs launch small businesses. .
One success story, Glaza said, is Plinquit, a Michigan-based woman-owned company that started with seed money and focused on the early stages of development.
Women-focused financial savings apps are now growing and can now attract funding from traditional venture capital firms. But she said that while it took the founders a long time to raise all the funding they needed, she could have used that time to develop the product instead.
If more state venture capital funding had been available, “that period could have been shortened,” she said.
Glaza said he hopes the bill passes and the money is included in the next state budget.
Officials say the $105 million will have no impact on the budget. It would redirect proceeds from the state’s previous early-stage venture capital fund, the Venture Michigan Fund.
