Ann Arbor, MICH. – October 30, 2018 – EntryPoint today announced the release of the 2018 Detroit Entrepreneurial Ecosystem Report. The report highlights Detroit’s economic growth and trends, showing 56 percent of venture capital was invested in information technology startups in the last year.
This momentum builds upon the rapid growth of Detroit’s entrepreneurial ecosystem and continues to validate Detroit as a top location for companies to launch and grow a business. According to the report, there has been a 54 percent increase in the number of Detroit-based venture-backed startups in the last four years. In 2017, 18 startups in the Detroit-area received more than $41 million from venture capital firms. Of the 18 startups that received venture capital investment in the last year, 56 percent are in the information technology sector, 17 percent are in the life science/healthcare sectors, and the remaining investments were in the mobility, business services and consumer products sectors. More than 25 percent of venture-backed startups in Michigan are now located in Detroit.
“Detroit is nationally recognized as a place to launch and grow a business due to its strong community and pipeline of capital, talent and research institutions,” said EntryPoint Founder and Managing Director, Emily Heintz. “As the city continues to grow, the entrepreneurial and investment community must strive become more inclusive to ensure existing residents are gaining access to the funding and economic opportunities of the emerging high-tech economy.”
Preserving Diversity in Detroit
Additional findings from the report show that the Black or African American population makes up nearly 80% of the total population of Detroit. Of the 37 venture-backed startups in Wayne County, only three are led by someone who is a racial minority, none of them are led by a woman, and none of them are led by someone who has identified themselves as a member of the LGBTQ+ community.
“Diverse company cultures don’t happen by accident. To be successful, entrepreneurs and investors need to be thoughtful, act with intention, and make choices that live into the values and culture you’re trying to grow at your organization,” said Trey Boynton, Duo Security Head of Diversity and Inclusion and advisory board member of EntryPoint.
Additional Findings from the 2018 Detroit Entrepreneurial Ecosystem Report:
- There are 37 active venture-backed startups in Wayne County that have raised an aggregate of $179 million, a 54% increase in the number of high-growth companies in the last four years.
- Of the 37 venture-backed startups in Wayne County, 49% are information technology companies and 14% are mobility-related companies with the remaining companies divided among life science, business services, advanced materials & manufacturing, consumer products, and other industries.
- Michigan has the highest density of engineers in the United States: 1,400 engineers per 100,000 residents with the concentration of engineers employed in Wayne County.
- Cost of living in San Francisco and New York is nearly 100 percent higher than Detroit, making building a business less capital intensive.
- Three active venture-backed startups headquartered in Wayne County are led by a CEO who is a racial minority. These companies have raised just over 5% of the total venture capital raised by startups in Wayne County in 2017.
The report yields insights from entrepreneurs across Michigan as well as information from the following sources: the U.S. Census Bureau, the 2012-2016 American Community Survey Five-Year Estimates, the 2018 MVCA Research Report, the Bureau of Labor Statistics, Numbeo, Entrepreneur Magazine and U.S. News and World Report.
EntryPoint advances the entrepreneurial community by promoting inclusion, community engagement and education. The organization works with entrepreneurial support organizations and startups at all stages of growth foster an inclusive organizational culture, expand their networks, and conduct research for education, outreach and advocacy purposes. EntryPoint was founded in 2018 by Emily Heintz, a leader in Michigan’s entrepreneurial and investment community who was part of Crain’s 40 Under 40: Class of 2016 and recognized in Forbes, Axios, and VentureBeat. To learn more, visit http://www.EntryPointMI.com or follow us on Twitter and Facebook (@EntryPointMI).