Ann Arbor Startups Raise Nearly One Billion in Venture Capital Funding
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 Ann Arbor Entrepreneurial Ecosystem Report. The report provides research insights and themes affecting the entrepreneurial ecosystem, including trends, successes and challenges that characterize Washtenaw County. Additionally, the report analyzes the impact of COVID-19 on startups in the region.
“Ann Arbor has a history of founders who have launched successful companies and continue to invest in the region,” said Emily Heintz, founder and managing director of EntryPoint. “We’ve seen this with Arbor Networks, Duo Security, and now Censys, where founders develop groundbreaking solutions and hire talented people who then start their own ventures, creating a continuous cycle of innovation that only gets stronger as time goes on. As tough as these times may be, the region is resilient because of a well-established foundation of talent, research, capital, and community, making it one of the main hubs of startup growth in the Midwest.“
Ann Arbor has a long-standing entrepreneurial history, with over 20 years of sustainable growth and activity. The city contains 38 percent of the venture-backed companies in Michigan. There are 55 active venture-backed startups in Washtenaw County, a 31 percent increase over the last six years, that have raised nearly a billion dollars in venture capital funding. Of the 55 venture-backed startups in Washtenaw County, 53 percent are information technology companies and 36 percent are life science or healthcare companies.
COVID-19 Impact on Startups
Of the startups surveyed in Washtenaw County, 94 percent felt they were at least somewhat prepared to operate during shelter-in-place. Only 28 percent of startups lost more than half of their revenue since February compared to 61 percent of all businesses in the county, while 31 percent have seen their revenue stay the same or increase during the pandemic compared to seven percent of all businesses in the county. The survey shows that 72 percent of startup companies in Washtenaw County have applied or intend to apply for loans to support their operations during and after COVID-19.
Fostering Innovation and the Growth of Entrepreneurship
“For Michigan to grow entrepreneurially, we need to foster a culture focused on regional success. We must support a robust startup ecosystem not just in Ann Arbor and Detroit, but across the state as a whole,” said Dug Song, co-founder and general manager of Duo Security at Cisco. “The data from the 2020 Ann Arbor Entrepreneurial Ecosystem Report shows how resilient our established tech ecosystem can be, even in the face of broader economic challenges. Our larger opportunity is to connect startup communities throughout the state of Michigan to sustain their growth as well as to attract and retain talent.”
On Wednesday, August 19, at 10 a.m., EntryPoint will host a panel featuring Patti Glaza of ID Ventures, Kelly Sexton of University of Michigan Office of Tech Transfer and Dug Song of Duo Security. The discussion will explore ways the community can better nurture startups (through policy, programs and culture shift), the impact of COVID-19 on the tech community, how we can build a more inclusive entrepreneurial ecosystem, significant events that have shaped the startup community in the Ann Arbor region and advice for people thinking about starting their own companies. To register for the free virtual event, click here.
Support for EntryPoint’S 2020 Ann Arbor Entrepreneurial Ecosystem Report was generously provided by Ann Arbor Entrepreneurs Fund, Bamboo, Build Institute, Cahoots, Endeavor Detroit, 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, Techstars and Wagner Design.
For more information and a look at the complete findings, please click here. To learn more about utilizing data to implement effective programs to support the entrepreneurial ecosystem, please view the EntryPoint Data and Program Development Guide.
EntryPoint is a nonprofit 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.