Whether for a high-growth technology startup or a budding entrepreneur seeking to open a brick-and-mortar retail store in a Detroit neighborhood, boosters of the new Venture 313 initiative say the resources for success are increasingly coming into place.
The newest philanthropic venture from billionaire businessman Dan Gilbert and his wife Jennifer seeks to deploy capital to early-stage startups and growing businesses in a variety of sectors. In doing so, executives at some of the partner organizations joining the initiative say the capital being provided — $10 million — can go a long way toward filling gaps at a variety of levels in the region’s startup ecosystem.
That includes deploying startup and growth capital, marketing the services that are available for would-be and startup entrepreneurs, and providing coaching and mentorship throughout the life cycle of a company.
First and foremost, the Venture 313 program “is really looking at the specific issue of lack of capital for scalable businesses,” said James Feagin, director of economic mobility for the Gilbert Family Foundation, which is providing the money.
“That’s not to say we don’t need more capital for small business and brick and mortar and a lot of other businesses,” Feagin continued, pointing to his own history in a lot of startup and entrepreneur support organizations. “But one of the things we see is there’s a ton of stuff if you want to get started and there’s a ton of stuff if you want to get $100 (million) or $200 million. And there’s this gap in the middle.”
Formally announced Thursday, the philanthropic money from the Gilberts essentially helps further the work of three of the city’s major support organizations for all manner of startups and entrepreneurs.
The organizations doing the on-the-ground work are:
Those organizations will provide a mix of direct investment, grants and loans, as well as lines of credit, depending on the situation of each company or entrepreneur.
For Invest Detroit Ventures, a high-volume, early-stage venture capital fund, having both the funding and the different organizations working together could help those companies seeking the Venture 313 services and money, and with a quick turnaround, according to Jeff Ponders, a principal at the fund.
“We’ve got the infrastructure in place, and now we can actually go and get that first institutional round (of investment),” Ponders said. “And so I think what we expect to see happen overnight, we’ll work together and you’ll start to see some companies will matriculate from idea to first round. And there will be other partners that enter the program.”
Ponders also pointed to the so-called playbooks, which he said will be tailored to the specific needs of each entrepreneur going through the program.
For top city officials, the program helps with tackling a major problem they say they’re having: connecting with would-be entrepreneurs who have an idea, but are unaware of some of the services available.
“Part of what this forum creates an opportunity for us to do is tie together pieces that otherwise you might not know about,” said Nicole Sherard-Freeman, the city’s group executive for jobs, economy and Detroit at Work.
The outreach, according to Sherard-Freeman, needs to extend far beyond the so-called “7.2,” referring to Detroit’s greater downtown area, and into neighborhoods around the city.
“They’re not watching this (Venture 313) press release, they’re not reading Crain’s,” the city official told an audience at the launch of the initiative on Thursday. “And they’ve got fantastic ideas.”
The ongoing work still includes meeting those people where they’re at and bringing them under the umbrella of resources available.
“This is a massive component, and yet still in neighborhoods, there is so much more work,” she said.
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