The startup ecosystem in West Michigan has a new captain at the helm to help entrepreneurs navigate the myriad resources, funding and services while increasing access to all industry sectors.
The Grand Rapids SmartZone Local Development Finance Authority has contracted with a newly formed nonprofit previously affiliated with the $15 million venture capital fund Start Garden LLC to begin transitioning into an administrative role for one of the area’s key entrepreneurial and economic development tools.
On March 25, the Grand Rapids LDFA approved a Memorandum of Understanding with Start Garden Ecosystem Inc., which has separated from its affiliated for-profit venture capital fund to provide entrepreneurial services on behalf of the Grand Rapids SmartZone effective April 1.
The Grand Rapids LDFA previously had a contract with Grand Valley State University, which ended March 31.
Mike Morin, CEO of Start Garden Ecosystem, indicated the venture capital fund will be renamed and will operate autonomously from the new nonprofit entity, which will become the “management company” for executing SmartZone and LDFA goals.
“In this region there are roughly 60 or 70 (entrepreneur support organizations), and that is where the new Start Garden is going to play. It will not be another ESO but sitting in the middle of that and helping entrepreneurs navigate the system,” said Morin. “(We will) provide basically concierge services, again focused on the entrepreneur, helping them navigate the network of ESOs that exist that have funding, training and mentoring.”
Morin said the new entity will help quantify, track and provide insight from the entrepreneurs’ perspective to identify which initiatives add value overall.
While the relationship with Start Garden Ecosystem is intended to improve accessibility and navigability of both public and private resources, Morin indicated the city will continue administering the TIF Plan developed for the Grand Rapids SmartZone.
“We are funded by the TIF Plan,” said Morin. “The overall budget and program belongs to the LDFA.”
Kara Wood, executive director of the Grand Rapids LDFA, said the contract with Start Garden to continue the services related to entrepreneurship and innovation in a platform is much more public-private.
“It was one of our goals and will also allow for future regional support, as well,” said Wood. “The relationships have changed. We are no longer in a contractual relationship with GVSU … but (GVSU) will continue to be an educational partner.”
Wood indicated the partnership with Start Garden Ecosystem will not only allow for public funds to leverage up to more than $1 million in additional private funds, but also will make the services available for entrepreneurs throughout the 13-county West Michigan region.
LDFA’s new public-private partnership with Start Garden Ecosystem also includes Emerge West Michigan, a community-based initiative intended to be the “go-to resource” for entrepreneurs; and Emerge Incubate, otherwise known as GR Current.
Emerge West Michigan is expected to change its name to Start Garden Foundation and will accept investment from private and foundational resources.
The collaboration between the LDFA and Start Garden Ecosystem is the first step in a “multi-step strategy” the two organizations, GVSU and Emerge West Michigan have worked toward since November, according to a press release.
Diana Lawson, dean of the Seidman College of Business at GVSU, said the university has been the host agent for the Grand Rapids SmartZone for more than 10 years and originally partnered with the LDFA since it was the best option at the time to move the initiative forward.
“A group of leaders in the area looked at the ecosystem for entrepreneurship and found that it was very fragmented, and they wanted to create something that would help create a more systematic approach to entrepreneurship for entrepreneurs,” said Lawson. “That was how Emerge was born, and Emerge is really the ecosystem for Kent County, Ottawa County and Muskegon.”
Lawson said the question then came up among all the parties involved — LDFA, GVSU, Emerge, and Holland, Muskegon and Grand Rapids leaders — as to who would best serve the overall ecosystem in terms of the Grand Rapids SmartZone after there had been some success with Emerge, which is when Start Garden “came into the picture.”
“It was decided that Start Garden would be the appropriate organization to drive that because it is what they do, and their main focus is on entrepreneurship,” said Lawson. “We, Grand Valley, looked at this as it was in the best interest we give up the (role) and transition it over to Start Garden to reduce the amount of redundancy in the amount of programs out there.”
Wood said for several years the activities of the Grand Rapids SmartZone and those of Start Garden have been parallel and often duplicated each other.
“We are bringing these organizations together to build on our assets and concentrate on the needs of our region,” said Wood. “Start Garden has proven itself to have the experience to support the strengthening of a strong startup ecosystem and make it work for entrepreneurs.”
Morin said the Start Garden “management company” does not have control over the funds invested with Emerge, and GR Current, which previously managed the SmartZone, was developed by a contract between GVSU and the LDFA and no longer exists.
“Emerge is highly collaborative with what Start Garden is doing,” said Morin. “It is an entity by which the private sector participates and funds. It has a broad-based board of representation that will kind of steward the private sector funds.”
While GVSU will no longer have a contractual relationship with the Grand Rapids LDFA, Lawson said the university will continue to be a partner, and the hope is to develop programs that are also available to the community, especially those who are underserved.
“This is an evolving transition,” said Lawson. “What we don’t want is to replicate programs that are already out there. Start Garden has a program called Seamless. We don’t want to replicate something like Seamless, but we want to look for areas where there may not be enough capacity to serve certain groups.”
While there wasn’t a lot of entrepreneurial activity in the region five or six years ago, Morin indicated the influx of initiatives now have proved challenging for some entrepreneurs.
“I think it is going to bring some focus,” said Morin in reference to the new strategy for the entrepreneurial ecosystem. “Historically, a lot of these programs have been funded, measured and tracked, but we haven’t really been able to translate that into a focus on the companies they are helping.”
Morin indicated Start Garden Ecosystem will be “looking at the health of the company” and evaluating measures such as the number of businesses being formed, resources, capital funding for the companies, tracking progress, and looking for revenue growth in the businesses themselves.
Start Garden Ecosystem will focus on expanding the private sector funding to startup businesses in any sector, ranging from neighborhood-based lifestyle companies to high-tech, high-growth firms.
The Grand Rapids SmartZone District and Certified Technology Park was officially approved for designation in January 2002 by the Michigan Economic Development Corp. The initial joint proposal submitted to the state in 2001 included partners: the city of Grand Rapids, The Right Place, Van Andel Institute, GVSU and Grand Rapids Community College.