In yet another sign that small startup companies are believed to spur growth in West Michigan, The Michigan Accelerator Fund has closed its fundraising and the total far exceeds the amount they expected to raise. The Grand Rapids venture capital firm has closed fundraising after raising more than $15.1 million after setting a goal of $10 million when it began.
Michigan Accelerator Fund I primarily focuses on life science startups and was formed in 2010 with $6 million from the State of Michigan. Michigan Accelerator Fund has invested around $4.8 million in 6 Michigan companies and has 3 more potential deals before years end. The newly raised funds will go toward investment in future early stage businesses. Michigan Accelerator Fund expects to review nearly 500 business plans this year in order to find Michigan startups to invest in.
The contributions from 70 individual and institutional investors including Van Andel Institute, the Michigan State University Foundation, Grand Valley State University and Davenport University shows the growing confidence in local startup businesses’ ability to aid the economic recovery. Startups use this money to hire employees, further develop operations, purchase goods and services from other local businesses, and more. Once these startups gain a foothold, they not only contribute to the economy through operations but they generally are eager to assist future entrepreneurs with their own startup ideas. Going from a modest $6 million of state funds to over $15 million of non-state funds shows that private individuals and other institutions believe Michigan Accelerator Fund is having a positive influence on the economy.
As always, funding is something that entrepreneurs should enter into cautiously. There are many options available and each has its pros and cons. It is important that you know all of your options. Funding can be the push your startup needs to succeed but it can be the shove that knocks your small business down too. Grand Rapids entrepreneurs should always have a planned attack before signing any contracts.
Source: “Michigan Accelerator raises $15.1M for first fund” by Mark Sanchez of MiBiz