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State House bills would boost seed money for some of the smallest Michigan startups

pitipat - stock.adobe.com

Early-stage startup companies might have more access to venture capital in Michigan soon.

Bills introduced in the state House would set aside $105-million for companies in their earliest stage of development.

Patti Glaza is with ID Ventures. That's one of five Michigan venture capital firms that would administer the new program. Glaza says it's important to invest in these smaller firms to help them get off the ground and keep jobs and entrepreneurs in Michigan.

"They're starving for capital, it takes them three times as long to raise half the amount of money as it does in other locations," she said. "Michigan is really lagging in terms of filling in the gap where the privates market aren't - there's too much risk."

Glaza said the state of Ohio has invested much more than Michigan in small startup venture capital over the past decade — and now that state has four well-funded venture capital funds, each with about 100 million dollars for helping entrepreneurs get their small business venture started.

Glaza said one success story is Plinquit, a female-owned business that got its start with Michigan-based seed money focused on early stages of development.

Now, the woman-centered financial savings app is growing and able to attract funding from traditional venture capital firms. But she said it took the founder a long time to raise all the needed money, time that she could have used developing the product instead.

"We could have shortened that timeframe," had there been more state venture capital funding available, she said.

Glaza says it's hoped the bills will pass so the money can be included in the next state budget.

Officials say the $105 million will not impact the budget; it will redirect returns from the state's previous early-stage venture capital fund, Venture Michigan Funds.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Public. She began her career at Michigan Public as an intern, where she was promptly “bitten by the radio bug,” and never recovered.