Ann Arbor SPARK is celebrating its fifth birthday this month and looking forward to cementing the region as Michigan's go-to entrepreneurial ecosystem.
The small business accelerator agency and its handful of incubators have established themselves as the heads of their class in Michigan, helping start-ups to get started and small businesses to ramp up their plans. Expect to see more of that over the next five years, says Ann Arbor SPARK executive director Mike Finney, who agreed to answer a few questions over email about how he sees that playing out.
Ann Arbor SPARK spent its first five years helping establish Washtenaw County as one of the Midwest's premier entrepreneurial ecosystems. What will its focus be over the next five years?
Over the past five years the Ann Arbor region has become a leading entrepreneurial location, but we still have much work to do before declaring victory. We will continue to focus on becoming a place where talent, technology, funding, entrepreneurial risk taking, success celebration and connectedness to universities and private companies are the norm. We also see a need for much more aggressive business expansion and attraction efforts. The use of social networking, talent enhancement and other marketing tactics will become key tools in our economic development toolkit. Finally, we need to learn from and share our learnings with other communities throughout Michigan and SE Michigan in particular.
Millions and millions of dollars in venture capital have flowed into the Ann Arbor area over the last few years. How close is the area to reaching some sort of critical mass for investment capital, and should we be looking at other metrics to let us know when our entrepreneurial ecosystem becomes sustainable?
The Ann Arbor region is definitely on the radar screen of local and national venture capital investors. Our challenge over the next five years is to clearly establish the region as a VC hot spot…where start-up companies thrive and VC funding is readily available from multiple sources. We view the recent efforts by the state of Michigan to increase VC investing as critical to achieving this objective. Getting experienced CEO's to actively search for opportunities in our region is a key indicator of success. We also see a need for programs intended to develop, retain and bring entrepreneurs to the region.
Micro loan funds have proven to be quite popular with local small businesses in southeast Michigan, especially since traditional credit lines have been mostly dormant. What type of future do you see for these micro loan funds a few years down the line if and when the credit markets return to normal?
The popularity of the micro loan program has exceeded our expectations. It was intended to fill the "gap" in funding available to start-up companies that had traditionally been provided by angel investors and financial institutions. As capital markets return to normal, we think angel investors and banks will fill the gap. Our expectation is that markets with begin to recover by early 2012. We plan to raise another round of funding ($2 – 2.5 million) to cover the next two years.
If you could change one thing about this region or import one idea or mindset, what would it be?
At SPARK, our immediate goal is to promote economic development in the Ann Arbor region. But our larger focus is ensuring long-term growth and viability for the entire state of Michigan — something that can best be achieved through a process we call Open Source Economic Development®. Economic development in Michigan should take a page from the playbook of the ever-evolving software industry. Its open source philosophy – providing the source code that drives development – is a model that can propel Michigan's success in growing, retaining, and attracting business. Instead of viewing other communities within Michigan as competition for business location and expansion, we view the world as the primary threat to our economic prosperity. In today's global market where companies can transfer business and operations to technology corridors like Boston, San Francisco and Austin Texas, transformational thinking in economic development is a necessity.
Source: Mike Finney, executive director of Ann Arbor SPARK
Writer: Jon Zemke
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