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

2. Some of the world's most important inventions, technologies and cultural contributions have come from Michigan and from Michiganders. Who We Are
5. +100 members +180M capital raised +15 industry verticals
6. A land of inventors, innovators and cultural contributors
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.
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.
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.
13. In 1957 Battle Creek-born John C. Sheehan (Ph.D., University of Michigan) achieved scalable synthesis of penicillin.
14. Ford & Boeing
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.
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)
18. Where We're Going
19. CPG MKTPLACES HEALTHTECH LIFE SCIENCE CLIMATETECH ENERGY CYBERSECURITY 1980s 2020s FINTECH ARTIFICIAL INTELLIGENCE
21. Why it Matters
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
23. US Economy has shifted from Industrial to Knowledge
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
25. How We Stack Up
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
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...
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
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
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
31. GROWTH & OPPORTUNITY R&D AFFINITY & COMMUNITY WHERE WE SLIP WHERE WE SHINE DENSITY CAPITAL TALENT DEI DELTA TO SOLVE FOR
32. Who We Are Solving For
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
35. Capital Customers Connections to influential and experienced people as Mentors, Advisors, Board of Directors FOUNDER FEEDBACK 1. 2. 3. What do innovators need?
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?
37. Hear from the Customer Founder journeys
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?