Written by Report Offers Insights Into the Economic Landscape of Detroit to Inform the Development of Entrepreneurial Support Programs
ANN ARBOR, Mich. – April 1, 2020 – EntryPoint, a nonprofit research institution that delivers comprehensive research insights and implements effective data-driven programs to promote entrepreneurship across the Midwest, today announced the release of the 2020 Detroit Entrepreneurial Ecosystem Report. The report provides important insights into Detroit’s entrepreneurial ecosystem to inform the development of entrepreneurial support programs as small businesses and startups navigate the changing economic climate.
Support for EntryPoint’s 2020 Entrepreneurial Ecosystem Report was generously provided by Bamboo, Build Institute, Cahoots, City of Detroit, Endeavor, ID Ventures, Inforum, Jaffe Raitt Heuer & Weiss, P.C., Marketing Supply Company, Michigan’s University Research Corridor, Michigan Venture Capital Association, Purpose Jobs, Renaissance Venture Capital, Shine & Rise, and Techstars.
“While the report shows promising data of the steady growth of startups in Detroit, there is no denying the COVID-19 pandemic will heavily impact small businesses and startups,” said Emily Heintz, founder and managing director of EntryPoint. “Detroit has weathered economic downturns in the past, and while we are in uncharted territory, it’s now more important than ever to use our understanding of the economic landscape to adapt to the shifting terrain and continue Detroit’s record of growth and success.”
The findings from the report show the continued momentum of startup growth in Detroit. There are 38 active venture-backed startups in Wayne County that have raised an aggregate of $485 million, a 58 percent increase in the number of high-growth companies over the last six years. Over 26 percent of the venture-backed startups in Michigan are located in Detroit. The dominant sectors are information technology companies and mobility-related companies. Of the 38 active-venture backed startups in Wayne County, 47 percent are information technology companies and 19 percent are mobility-related.
In 2019, 19 venture-backed startups in the Detroit area attracted more than $63.8 million from venture capital firms. Of the 19 startups that received venture capital investment last year, 47 percent are information technology companies and 21 percent are life science/healthcare companies with the remaining companies divided among the mobility and consumer products sectors.
Additionally, the report provides new insights on attracting and retaining top talent. To adjust to the changing workplace norms and to remain competitive, it is critical for small businesses and startups to instill a workplace culture that enables people to continue innovating – as well as provide the adaptability necessary to adjust to opportunities and challenges in the economy. Of the venture-backed startups in Detroit, nearly all or most provide work from home flexibility, paid time off and parental leave.
Using the Power of Data to Inform Program Development
The data and insights from the 2020 Detroit Entrepreneurial Ecosystem Report and other research insights and reports developed by EntryPoint help organizations with understanding the economic landscape and assisting them with implementing effective programs to support small businesses and startups. Along with a comprehensive analysis of the entrepreneurial ecosystem in Detroit, EntryPoint identified there are four contributing factors to building a robust entrepreneurial ecosystem: capital, talent, research and community. In response, Michigan Economic Development Corporation (MEDC) is implementing programs to provide opportunities to Detroiters, and Michigan residents, by:
- Creating programs designed to support researchers developing new technologies at top research universities across the state;
- Supporting organizations dedicated to growing and sustaining a vibrant venture community;
- And providing entrepreneurs and startups business services and operational support.
Findings from the report also identify the gaps in funding for startups that are run by underrepresented minorities, highlighting the need for programs that will help create an equitable entrepreneurial ecosystem. Of the 38 active venture-backed startups in Wayne County, eight of them are led by someone who is a racial minority, three 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. Furthermore, in Detroit, seven active venture-backed startups are led by a CEO who is a racial minority. These companies raised eight percent of the total venture capital raised by startups in Detroit in 2019.
To learn more about the Detroit entrepreneurial ecosystem, please view the complete 2020 Detroit Entrepreneurial Ecosystem Report. To learn more about utilizing data to implement effective programs to support the entrepreneurial ecosystem during this time, please view the EntryPoint Research and Program Development Guide.
About EntryPoint
EntryPoint is a research institution that aims to promote entrepreneurship across the Midwest. The organization believes that the best research takes a holistic approach to data acquisition and analysis, and as such, seeks to build meaningful partnerships with corporations, community foundations, entrepreneurial support organizations, and other groups. Working in tandem with these partners, EntryPoint develops comprehensive research reports that deliver insights on strengths and challenges facing companies, communities, and the broader region. Research findings are used to design and implement effective programs to promote entrepreneurship by fostering an inclusive culture, expanding networks, and facilitating education and advocacy. EntryPoint is a registered 501(c)(3) organization. To learn more, visit www.entrypointmi.com.
Connect with Us
- Facebook: @EntryPointMI
- Twitter: @EntryPointMI
- LinkedIn: @EntryPointMI
6 comments