Back in the early part of the 20th century, Detroit was considered to be one of America’s greatest cities. It was an economic powerhouse, center of industry and a hub of innovation. Detroit was the birthplace of the automotive industry and the place where dozens of the world’s most notable corporations got their start. It was also a city willing to stretch boundaries and embrace new ideas and concepts. Detroit was home to the world’s first convention and visitor’s bureau (1896), the first stretch of paved concrete road (1909) and the first radio news broadcast (1920).
Then, starting in the 1950s, the City of Detroit began its slow and seemingly unstoppable decline. In 1950, Detroit’s population was 1.86 million. Today, less than 700,000 people call it home. Detroit went from being a source of national pride to the butt of global jokes. Most of the world had written the city off and given up hope that it could ever reverse its fortunes. Whether the topic was crime, poverty, corruption, urban decay or economic decline, Detroit leapfrogged to become a list topper where it seemed poised to remain until the city faded from economic relevance. In July 2013, Detroit became the largest municipal bankruptcy filing in U.S. history by debt, estimated at $18–20 billion.
But in the short time since then, Detroit has begun a fundamental shift from being an urban economic wasteland to becoming a powerful center of innovation and entrepreneurship, particularly among social enterprises and tech startups. Today, Detroit is home to well over 100 promising tech startups, with the number growing every month. For social entrepreneurs, Detroit offers the ideal proving ground for new concepts to apply entrepreneurial principles to address critical social problems. Both are drawn to Detroit due to low rents, increasing access to capital and investment, availability of talent and a strong, growing network of knowledge and support.
The seeds of change were planted several years ago when the public and private sectors individually and collectively began investing in the development of the infrastructure necessary to foster entrepreneurship and innovation. Institutions such as Wayne State University, the University of Michigan, the Kresge Foundation and others began to establish programs and initiatives to support local entrepreneurs. At the same time, key business leaders like Dan Gilbert and Mike Illitch invested millions, renovating buildings and bringing jobs and economic opportunity to Detroit’s central core.
Other key elements also began to fall in to place as venture capitalists took note of Detroit, increasing the availability of startup capital, followed by the growth of incubators and accelerators to provide an entrepreneurial knowledge, resource and support network. The private sector joined in too with global players such as Microsoft Ventures, which provides seed money and technology to startups, establishing an office in downtown Detroit and in 2014, JPMorgan Chase pledging $100 million over five years to fund job training and economic development projects. Combined, these factors have sparked an entrepreneurial fire that is growing brighter as entrepreneurs increasingly recognize the wealth of support and resources Detroit offers to startups and growing businesses.
Entrepreneurial Resources in Detroit
Entrepreneurship in Detroit is supported by a strong and growing network of venture capital, incubators and accelerators and innovative initiatives that that support entrepreneurs and guide them to success. A summary of these resources is below.
Some of the key venture capital firms with offices or representatives in Detroit (or the Detroit Metropolitan Area) include:
- Apjohn Ventures
- Arbor Partners
- Arboretum Ventures
- BioStar Ventures
- Bridge Street Capital Partners
- Capital Strategies Group
- Chrysalis Ventures
- Early Stage Partners
- EDF Ventures
- Endurance Ventures
- Fletcher Spaght Ventures
- Fontinalis Partners
- Hartwick Capital
- Hennesey Capital
- MacBeedon Partners
- Midwest Venture Partners
- North Coast Technology Investors
- Oracle Capital
- Plymouth Venture Partners
- Renaissance Venture Capital Fund
- RPM Ventures
- Seneca Partners
- Social Venture Fund
- SWMF Life Science Fund
- TGap Ventures
- Trillium Ventures
- Venture Investors
- Wolverine Venture Fund
Incubators and accelerators:
Notable incubators and accelerators in and around Detroit include:
- Automation Alley
- Build Institute
- Detroit Creative Corridor
- Green Garage
- Macomb-OU Incubator
- NEO Center (Lansing)
- TechArb (University of Michigan Ann Arboar)
- Tech Brewery
Innovative initiatives and funding opportunities:
Several innovative initiatives and funding opportunities to support entrepreneurial growth in Detroit have emerged such as:
- Global Detroit: Global Detroit is a key innovator in the revitalization of Southeast Michigan’s economy and is a national leader in an emerging economic development field centered on welcoming, retaining, and empowering immigrant communities as valued contributors to regional growth.
- New Economy Initiative: The New Economy Initiative, a special project of the Community Foundation for Southeast Michigan, is the largest economic development initiative of its kind working to build a network of support for entrepreneurs and small businesses. The initiative provides capital, tools and resources to foster entrepreneurship in and around Detroit.
- Coworking Spaces: Co-working Detroit offers shared work space, resources, and often a great community. This online website was created to help connect entrepreneurs to work spaces in Metro Detroit.
- Michigan Women’s Foundation: MWF works to eliminate the barriers to economic and social equality by developing a scalable model across Michigan that provides access to capital and a strong entrepreneurial ecosystem for women starting and growing businesses with the goal of preparing them to qualify for traditional funding sources.
- Invest Detroit: Invest Detroit is a certified Community Development Financial Institution and a leading source of private sector financing which utilizes a variety of funding tools through managed for-profit and non-profit targeted funds to support economic and community development in underserved communities primarily in the City of Detroit.
- JP Morgan Invest in Detroit: This site provides an overview of JPMorgan Chase’s five-year, $100 million investment in Detroit. It provides information about training, networks, mentorship, markets and capital to help entrepreneurs to succeed.
- Detroit Economic Growth Corporation: DEGC provides a list of financing, incentives and grants available to entrepreneurs, startups and businesses located in, or considering setting up shop in the City of Detroit.
This is not by any means a comprehensive list of all of the resources supporting entrepreneurial growth in and around Detroit, but this does give you an overview of the City’s burgeoning startup scene and make it worthy of consideration as a place to launch your new business venture.