Start Garden, the Grand Rapids, MI-based accelerator working to boost West Michigan’s startup ecosystem, has spun out its investing arm into a private, independent entity called Wakestream Ventures.
Wakestream will be led by Amway scion Rick DeVos, Start Garden’s founder, and will make venture investments primarily in technologies with high growth potential, including “hardware-software convergence and e-commerce enablement,” said Joe Lampen, Wakestream’s finance director.
When Start Garden was first launched in 2012, Lampen explained, it encompassed a capital fund in order to offer a bit of financial support to the companies it was mentoring.
“But eventually, we knew it would make more sense for the two pieces—entrepreneurial assistance and investment capital—to separate,” he said. “After conversations around the ecosystem, it seemed like a good time to consolidate and separate tasks.”
Wakestream will continue to make investments in early-stage tech startups, mostly in the $100,000 to $500,000 range. Lampen said there’s a focus on Internet of Things due to the ways the sector can intersect with Michigan’s manufacturing economy.
“We felt like we might have a competitive advantage, where we could invest in enabling technology for Michigan’s manufacturing base,” he said. “We’re trying to avoid the IoT tagline; it’s kind of in that vein, but broader as well. How can we leverage the skills of the area and the next generation of connected things?”
Lampen said Wakestream is “actively working with” roughly 40 companies. “We are making new investments, but we’ve reduced our focus on publicizing the information to highlighting the successes of the companies instead,” he added. He estimated Wakestream will invest about $4 million per year in new and portfolio companies.
It’s been a solid year of growth for Start Garden. In 2015, it relocated to a bigger office in downtown Grand Rapids in order to accommodate a new co-working space. In April, Start Garden announced it would manage the administration of the Grand Rapids SmartZone and join with eMerge West Michigan to create two new entities: Start Garden Ecosystem and Start Garden Foundation, a nonprofit.
Wakestream will be funded by private assets, forgoing public funds or money designated for the Start Garden Foundation, Lampen said. Kim Pasquino and Mike DeVries will serve as Wakestream’s chief investment officers.
