Early-stage tech entrepreneurs in Michigan now have a new source of investment capital to chase.
Grand Rapids, MI-based Grand Ventures, established earlier this month by McKeel Hagerty of Hagerty Insurance and Huron River Ventures’ Tim Streit, will provide support to high-growth tech startups focused on agriculture, manufacturing, transportation, and other industries with strong Midwest presence, Streit says.
Streit’s work at Huron River Ventures inspired him to create a new venture fund.
“We started Huron River Ventures with a hypothesis that there was an emerging startup scene in Michigan,” he explains. “Companies like Duo Security and FarmLogs have proven to the market that this is a thriving venture community. We want to repeat what’s working, and it’s the right time.”
Huron River Ventures was co-founded by Streit in 2010, when it raised $16 million across multiple funds and invested in 20 tech companies, including Ambiq Micro, Sight Machine, and others. Its portfolio companies have raised more than $200 million in follow-on funding, including contributions from some of the nation’s top venture capital funds.
Hagerty is Streit’s longtime friend and advisor. Under his leadership, Hagerty Insurance has grown from a small, 30-person family business to one with more than 850 employees worldwide and $36 billion in total insurable value.
Streit says he and Hagerty chose to focus on industries where Michigan is already strong based on what he learned at Huron River Ventures. “There’s an inherent advantage to investing in industries we know and understand,” he says. “It’s not rocket science.”
The Grand Ventures co-founders are very optimistic about the Great Lake State’s entrepreneurial growth compared to where the ecosystem was at the beginning of the decade.
“If you look at where Michigan venture capital was five years ago versus today, it’s absolutely thrilling,” he says. “There are at least 10 new funds, there are accelerator programs all over the state, and the universities have done a phenomenal job inspiring students. On top of that, you have really healthy companies. If they start to exit, people like Dug Song [CEO of Duo Security] and Jesse Vollmar [CEO of FarmLogs] will start their next ventures, two companies will turn into 10, and we’ll be like any other innovation cluster.”
Of course, there is work to do before that happens. However, Streit believes that Michigan is on the right path. For one thing, he thinks Michigan’s VCs are more knowledgeable and connected than they were five years ago.
“In San Francisco, it’s easy for a startup to land a big company as their first customer,” he says. “In Michigan, it’s harder for startups to work with mature companies, so we’re building an advisory board to help them secure their first customers and engage with big customers.”
The bottom line, Streit says, is that Michigan’s tech startup ecosystem is at a tipping point, and he feels now is the time to double down on the state’s innovators. “We want entrepreneurs to know we’re in it for the long haul and we’re open for business,” he adds.
