Grand Valley State University Seidman College of Business leaders last week released a comprehensive study of entrepreneurship in West Michigan (or a reported lack thereof) citing specific areas necessary for improvement. It does not come as a surprise to anyone that lack of venture capital has stymied creation of new businesses, nor should it be a surprise that such lack also is throttling companies burgeoning toward second-stage funding needs for growth. There are many other hurdles in this state, chiefly the Michigan Business Tax which state legislators have been content to watch strangle the life from businesses operating despite a worldwide recession, banking crisis and near bankruptcy for two world automotive manufacturers.
The report also keys to two additional issues Michigan policy and economic experts have long decried: education (as measured by the number of the population holding at least a college bachelor’s degree) and migration of a younger “talent pool” to other states.
The Business Journal questions whether a count of patents issued in the Grand Rapids area well represents the entrepreneurial “spirit” if retail and service business startups are not included in the definition. The Downtown Development Authority, for example, recently reported that 14 new businesses have opened since last September (though four have closed and three moved elsewhere), and the majority are located on South Division, the city’s Avenue of the Arts which cultivates entrepreneurial effort among the city’s most creative class. The other four new businesses are leasing storefronts on Monroe Center. (See the story on page 1).
A survey of local professional males associated with entrepreneurial activities and ages 45 to 64 made some significant points beyond the more obvious lack of capital: venture capitalists are not well represented on the boards of West Michigan banks, nor are growth company CEOs well represented on the boards of Michigan banks. Those strongly agreeing with those points were far more significant, and that fact should be reviewed for change by local bank boards.
GVSU’s Seidman School Dean H. James Williams last week said the college would work to develop a student run venture fund, and is linking with venture capital fund Grand Angels to launch a sidecar fund to attract more investors.
In the same week the West Michigan Life & Science Technology Initiative, housed within GVSU, was named the Michigan Pre-Seed Capital Fund’s Micro-Loan review agency. See the story on page 18). The agency will review life sciences company applicants from across the state in qualification for Michigan Economic Development Corp.’s Strategic Economic Investment and Commercialization Board $1 million fund. The 15 Michigan SmartZone consortiums will review those applicants for recommendation to WMLSTI.
Williams noted last week, “What we need is a coordinated strategy for mobilizing the resources we do have to achieve maximum impact, along with a plan for enhancing our capabilities, over time, to promote and support entrepreneurship. We simply must continue to develop and enhance a culture that encourages and supports entrepreneurs and entrepreneurship.”
Leaders in all business sectors should examine what role they play in creating and sustaining that culture, and financial institutions should lead the way.