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Michigan Strategic Fund approves new pre-seed fund for early-stage startups

Thursday, April 16, 2020   (0 Comments)
Posted by: Alisha Brown
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The Michigan State University Foundation will serve as the fiduciary of a new $3 million pre-seed state fund geared toward early-stage startup companies.

The board of the Michigan Strategic Fund on Tuesday morning approved the new fund, which will formally start May 1 and operate for five years, according to a briefing memo from the Michigan Economic Development Corp., the quasi-governmental organization that administers the state’s economic development fund.

“The award of this Pre-Seed Fund is especially critical at this time, considering the impact of (the) COVID-19 pandemic on Michigan technology early stage companies,” the MEDC wrote in the memo. “Now more than ever, the goal is to get best support possible to early stage technology companies, putting them on a path to survive the current economic crisis and scale when the downturn subsides.”

The Michigan Strategic Fund has the option to put more money toward the fund over its life, according to the briefing memo.

In becoming the fiduciary of the funds, the MSU Foundation beat out three other entrepreneurial service organizations from around the state. Also responding to the MEDC’s request for proposals were Detroit-based Invest Michigan, Ann Arbor Spark and Start Garden in Grand Rapids.

Dave Washburn, executive director of the MSU Foundation, did not immediately respond to a request for comment.

The MEDC’s briefing memo notes that the MSU Foundation has capacity to commit $2.5 million of its own funds toward the initiative, something the other organizations were lacking. The MEDC also noted the foundation’s strong partnerships with the state’s investment community and showings of support from a variety of institutions and companies from around the state.

The MSF board also approved a $2 million loan to Northern Great Lakes Initiatives, a Marquette-based Community Development Finance Institution to provide loans to small businesses in 73 counties around the state.

The institution’s service area includes all counties in Michigan except Wayne, Oakland, Macomb, Genesee, Shiawassee, Lapeer, St. Clair, Tuscola, Sanilac and Huron.


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