MFF State of Innovation - Trista Van Tine

Michigan Founders Fund's Trista Van Tine on Michigan's state of innovation, keynoting the Michigan Innovation Summit.

Organized and sponsored by Song Foundation, in partnership with Lt. Gov Gilchrist, Michigan LEO, and hosted at Michigan Central, in Detroit.

Transcript

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2. Some of the world's most important inventions,
   technologies and cultural contributions have come from
   Michigan and from Michiganders.
   
   
   Who We Are
   

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5. +100 members
   +180M capital raised
   +15 industry verticals
   

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6. A land of inventors, innovators and cultural
   contributors
   

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8. David D. Connell, BBA ’55/MA ’56, was Sesame Street’s first executive producer. He was a key
   player in the conception, planning, and launch of the genre-creating children’s program, which
   was designed with the input of educators and psychologists to encourage the educational
   development of inner-city preschool-age children.
   

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9. The world’s first modern traffic light was the invention of a Detroit police officer and installed at the intersection of
   Michigan and Woodward Avenues in October 1920. It was not only the first four-way signal but also the first traffic
   light to use the three-color system.
   

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10. Sherm Poppe holding two Snurfers, a proto snowboard he created in 1965. Poppen joined two 36-inch long skis
    together so his daughter could play on the snow-covered hills behind their home, laying the foundation for what was to
    become the snowboarding revolution.
    

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13. In 1957 Battle Creek-born John C. Sheehan (Ph.D., University of Michigan) achieved scalable synthesis of penicillin.
    

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14. Ford & Boeing
    

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16. Computing & Internet: 1900s - 1950s
    Numerical control/computer-
    aided machines, were
    developed by John T. Parsons.
    The Detroit native is known as
    the "father of the second
    Industrial Revolution."
    Claude Shannon - his property
    of electrical switches to
    implement logic is the
    fundamental concept that
    underlies all electronic digital
    computers. Shannon's work
    became the foundation of
    digital circuit design, as it
    became widely known in the
    electrical engineering
    community during and after
    World War II.
    Early 1900s partnering with the U.S. Air Force at
    Willow Run, John DeTurk built the Michigan Digital
    Automatic Computer (MIDAC), one of 20 digital
    computers in the United States.
    

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17. Computing & Internet: 1970s - 1990s
    1990s building blocks of the internet
    were pioneered by Bill Simpson (PPP,
    IPSEC), Nathaniel Borenstein (MIME
    email/webpage) and Tim Howes (LDAP).
    1973 Founded by three Detroit friends.
    Created first software product for
    mainframe computing in 1977 and
    software became primary business
    driver in 1980. One of the largest
    Software developers in the world.
    In 1970, Lansing-born physicist Donald B.
    Keck (Ph.D. from Michigan State) helped
    develop the “first optical fiber for wide
    use in telecommunications."
    1980s Sid Meier video games -
    Civilization. "Godfather of
    computer game engineering."
    1987- Michigan Educational
    Research Information Triad
    (MERIT - upgrade NSFNET)
    

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18. Where We're Going
    

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19. CPG
    MKTPLACES
    HEALTHTECH
    LIFE SCIENCE
    CLIMATETECH
    ENERGY
    CYBERSECURITY
    1980s 2020s
    FINTECH
    ARTIFICIAL
    INTELLIGENCE
    

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21. Why it Matters
    

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22. In recent decades VC has
    generated more
    economic and
    employment growth in
    the U.S. than any other
    investment sector.
    venture investment
    makes up only 0.2% of
    GDP, but delivers an
    astonishing 21% of GDP
    in the form of VC-backed
    business revenues.
    VC-backed companies drive outsized growth
    

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23. US Economy has shifted from Industrial to Knowledge
    

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24. 70% of R&D Investment
    59% of R&D Jobs
    generate 27.2% of U.S. exports
    pay 8.1% of total wages
    They provide jobs that have higher wages and create jobs in sectors outside of their own
    1 technology-based job can create another 5 jobs in other industries
    Startups and scale-ups are more often than not, addressing an unmet need, which
    opens NEW markets
    And attracts Foreign investment, which leads to immigration and increased population,
    not to mention increased population of highly skilled employee talent
    They are generally able to move and adapt to market and societal needs quicker than
    large companies, which is attractive to a new generation of workers and talent looking to
    push boundaries
    Without tech startups, there would no net job growth in the US economy
    Technology-based start-ups account for only 3.8% of the total firms in the United States
    They contribute to population growth
    

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25. How We Stack Up
    

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26. Density Capital Talent DEI
    Low founder density -
    35th
    # of startups per
    1,000 businesses -
    33rd
    # of VC-backed
    companies per
    million residents -
    34th
    % of workforce in tech roles - 30th
    Median wages 10% below US
    Residents’ education levels - 27th
    Post-secondary attainment is 41.7%
    stark racial disparities - 43.5% for
    White and 26.2% for Black residents
    Negative net migration of population
    Lowest national % of non-home-
    grown residents ages of 25-34,
    second-lowest ages of 35-44
    % of adults who were born elsewhere,
    either in another state or another
    country - 49th
    Black population 14%;
    Startups with at least one
    black founder - 4.5%
    17% of VCs are persons of
    color, compared to 24% of
    VCs nationally
    17% of VCs are women,
    compared to 21% of VCs
    nationally
    Less than 1% of all US VC
    investment
    Forbes best states to start
    a business in 2023 - 47th
    On average, it takes
    Michigan startups two
    years longer to raise their
    first $500,000 than
    companies based on the
    coasts
    The median size of an
    investment made by an
    individual angel investor
    in 2020 was $30,000
    Sources: Crunchbase; Expert interviews; BCG Analysis, Kauffman; WalletHub, IRS.gov; BCG Analysis, Occupational Employment and Wage Statistics (OEWS) by US Bureau of Labor statistics (BLS), LEO, US Census Bureau 2016 data; Bridge Michigan Analysis, Forbes, "Michigan's Great Inflection" report MICHauto
    , NBER Working Paper - Funding Black High-Growth Startups, 2021 MVCA Report
    WHERE WE SLIP
    

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27. University of Michigan Ranks #7 in the world for the number of undergraduate alumni entrepreneurs who have
    founded venture capital-backed companies and #16 for graduate alumni! But, the companies are being
    founded outside of Michigan...
    

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28. Sara Spangelo, who holds a PhD
    in aerospace engineering from
    the University of Michigan, has
    disrupted the data industry with
    affordable satellite technology.
    $29 M sold to SpaceX
    Josh Tetrick, graduate from
    University of Michigan Law
    School, has taken the plant-
    based food industry by storm.
    $465 M
    Inder Singh, founder and
    CEO of Kinsa, studied
    biomedical engineering at
    the University of Michigan
    $29 M
    Katherine Ryder, CEO &
    Founder at Maven (LSA Honors
    College 04′)
    $292 M
    The company was launched in
    2007 by Jeff Lawson (BS CS ’03),
    Evan Cooke (MS CSE ’04, PhD
    CSE ‘07) and John Wolthuis (BS
    CS ’98, BGS ‘98)
    $614 M - IPO
    Henry Ward graduated from
    University of Michigan with
    a BGS in Mathematics and
    Computer Science
    $1.2 B
    

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29. R&D
    Business R&D spend - 7th
    Patents produced - 7th
    Academic R&D spend - U.Mich
    ranked 3rd; Our top 10 Unis
    account for $2.8B
    50% of Michigan college graduates
    who moved away indicated they
    might return within five years
    100 founders and VCs have pledged
    1% of their personal or company
    equity or investment carry to MFF for
    grantmaking/placemaking in MI
    Affinity & Community
    Sources: Crunchbase, Center for American Entrepreneurship, Bloomberg, Entrypoint Detroit Entrepreneurial Ecosystem Report 2021, ​
    NSF, NCES FY20 data BCG Analysis, ​
    NCES FY21 data, Occupational Employment and Wage Statistics (OEWS) by US Bureau
    of Labor statistics (BLS), accessed 04/24/2023, BCG Analysis, Survey of more than 6,600 2017 graduates conducted by The Office for Survey Research at Michigan State University’s Institute for Public Policy and Social Research
    WHERE WE SHINE
    Growth & Opportunity
    Michigan is the fastest growing state for
    VC investment (886% 2016-2020)
    Ann Arbor was ranked at the top of
    metro areas for female founded VC-
    backed companies, one of the US top 25
    innovative cities, and a top new tech hub
    Detroit is #1 global emerging startup
    ecosystem and has seen 37% growth in
    high-tech employment since 2010
    Growing 4% faster than national average
    for median wage - ranked 3rd fastest
    Entrepreneurs are just getting it done!
    Diversification
    

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30. FLOYD $25 Million 97 consumer goods
    BLOOMSCAPE $25 Million 45 consumer goods
    STOCKX $255 Million 1200
    consumer goods /
    marketplace
    WORKIT HEALTH $138 Million 500 healthtech
    STRATA ONCOLOGY $130 Million 127 life sciences
    WISELY $187 Million EXIT 75 hospitality saas
    CENSYS $53 Million 126 cybersecurity
    DUO $2.35 Billion EXIT 900 cybersecurity
    ONESTREAM (buyout) $700 Million 750 fintech
    BENZINGA (buyout) $300 Million 217 fintech
    AUTOBOOKS $97.8 Million 120 fintech
    GROUNDSPEED
    ANALYTICS
    $32 Million 90 insurtech
    OUR NEXT ENERGY $390 Million 150 (+2200 by 2024) energy
    SKYSPECS $119 Million 75 energy
    MAY MOBILITY $194 Million 230 autonomous vehicle
    15 VC-backed
    companies
    founded since
    2010
    Sources: PitchBook and Crunchbase
    TOTAL RAISED TOTAL EMPLOYEES INDUSTRY
    COMPANY
    $2.58 Billion
    Raised
    
    
    Employ over
    4500 people
    
    
    4 unicorns
    2 buyouts
    2 exits
    1 automotive
    industry
    
    
    

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31. GROWTH &
    OPPORTUNITY
    
    
    R&D
    
    
    AFFINITY &
    COMMUNITY
    WHERE WE SLIP WHERE WE SHINE
    DENSITY
    CAPITAL
    TALENT
    DEI
    DELTA TO
    SOLVE FOR
    

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32. Who We Are Solving For
    

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34. Roots & Wings
    
    
    Lisa - CA
    Mike - CA
    Katie - MA
    Myk - MA
    
    
    Moved Here & Stayed
    
    
    Guy - BitLeap
    (sold to Barracuda)
    Nutshell, Trove, Cahoots,
    Ampll
    Andy - Nutshell
    (sold to WebFX)
    David - Censys
    
    
    1% MFF Pledge to MI - first
    proceeds for placemaking!
    UofM Founders Lost 2021
    
    
    Prateek - NY
    Brian - OH
    Matthew - PA
    

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35. Capital
    Customers
    Connections
    to influential and
    experienced
    people as
    Mentors,
    Advisors, Board
    of Directors
    FOUNDER FEEDBACK
    1.
    2.
    3.
    What do
    innovators
    need?
    

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36. "There are many ESOs & money in that space to support
    founders, but not led or guided by founders."
    "There isn’t a lot of strong structural support, but many
    individuals in the state are doing a lot for founders."
    "The ecosystem is much more open and willing to help than it
    was ten years ago, but we need more statewide collaboration."
    "Overall, we focus a lot on education for startups (pitches and
    fundraises) but NOT commercialization (actual company building)."
    "Need to stop trying to apply a “one size fits all” approach to
    company-building."
    "Best ecosystems have a
    strong, shared purpose,
    not just geography."
    "Need better focus and understanding of different
    tech verticals."
    "We need to keep track of early and first-time founders
    and see what happens to their companies."
    What do
    innovators
    need?
    

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37. Hear from the Customer
    Founder journeys
    

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38. What we will do together to continue our
    legacy of innovation and create the best
    possible future for all Michiganders...
    How can we be a Founder-Friendly State?
    How can we Foster a Culture of Yes?
    

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