Share
EAST LANSING, Mich. — Michigan Rise Pre-Seed Fund III, a subsidiary of the Michigan State University Research Foundation, today announced the Michigan Strategic Fund has approved an $8M allocation that enables Michigan Rise to continue its program of investing in high-tech startup companies.
This is the third tranche of funding for this program. In April 2020, the Michigan Strategic Fund Board (MSF Board) selected the Michigan State University Research Foundation to manage the Pre-Seed III Fund and awarded an initial grant of $3M. In July 2021, the MSF Board added $6.5M to the fund. The MSU Research Foundation also contributed $2.4M in matching funds to the Pre-Seed Fund, which stands at just under $20M today
Since its inception in August 2020, the Michigan Rise Pre-Seed Fund III has invested approximately $8.2M in 51 startups across the state. Those companies have gone on to raise over $500M in outside funding and have created over 500 jobs.
“We are grateful for the opportunity to continue to serve the state of Michigan’s innovation ecosystem through this partnership,” said Jeff Wesley, Executive Director of Michigan Rise. “This program fits MSU’s land grant heritage and we are thankful for the relationships we have built across the great state of Michigan.”
Michigan Rise invests in Michigan based startup companies that are commercializing new technologies and have the ingredients to be successful. With an average investment of around $120,000 to date and a cap of $250,000 per company, Michigan Rise touches a variety of industries core to Michigan’s economy, such as Life Sciences, Information Technology, Energy, Mobility and Material.
The goal of the Pre-Seed Fund is to provide early-stage funding to help Michigan high-tech start-ups achieve commercial and technical milestones that will position them for future scaleup through capital, talent, and customer acquisition. The Pre-Seed Fund collaborates across the state with Michigan SmartZones and university technology transfer offices that are developing high-potential Michigan university spinouts.
The Pre-Seed Fund also has a commitment to both demographic and geographic diversity as the portfolio is built.
The Pre-Seed Fund has two financing options for eligible companies:
- The Pre-Seed Fund can invest up to $250,000 per company in equity or convertible financial instruments. Investments are generally provided in tranches that are matched to milestones articulated in the company’s business plan.
- The Pre-Seed Fund can also provide up to $500,000 per company in loan financing to fulfill purchase orders before payments are received for those orders.
“The MSU Research Foundation has played a critical role over the years by reaching out across the state and identifying sound opportunities,” said Nataliya Stasiw, Equity Capital Program Director for Entrepreneurship and Innovation with the Michigan Economic Development Corporation. “They have already demonstrated a strong track record through their early-stage investments and we look forward to their continued impact as a result of this additional investment in the fund.”
The current Michigan Rise Pre-Seed III portfolio is invested across multiple locations and sectors. The two largest sectors being Life Sciences and Information Technology making up almost 47% of the portfolio.
In Life Sciences, companies are commercializing new products and services in areas such as automated lateral patient transfer, phototherapy systems and devices, sanitizing technology and neurodegenerative therapeutics. In addition, the portfolio consists of companies working to bring land data software to the market, smart building systems, spacecraft electronic systems and workforce scheduling platforms.
“The depth and breadth of interesting technologies coming from across the state is astounding,” continued Wesley. “The number of projects we’re seeing in important areas like Life Sciences, Mobility, Energy Storage, and Materials should have an enormous impact on the economics of Michigan.”
