Michigan. It’s a state synonymous with both automotive innovation and the great outdoors.
One startup company, Grounded, is looking to capitalize on both those identities as it rides the electrical vehicle wave into the RV market with its customizable, electric G2 camper van. Helping Grounded bring its product to a wider audience is a new fund state leaders have created to help spur investments in Michigan’s outdoor recreational industries.
“It’s a great thing because of how much outdoor innovation is happening in the state and because of how much outdoor recreation there is in the state,” said Sam Shapiro, Grounded’s founder and CEO. “Michigan and the U.P. are such amazing places in terms of nature and outdoor activities – and I think that’s also why there’s so many outdoor startups. So, the fact there’s a fund dedicated to that, I think it makes a ton of sense.”
The
Michigan Outdoor Innovation Fund, which is starting with a $3 million investment from the Michigan Economic Development Corporation administered by
InvestUP, is designed to help companies that are just beginning to design products to increase access or enjoyment of outdoor recreational experiences.
“We’re looking for growth businesses; venture-backable companies and we’re (in) the earliest stage of financing they would receive,” said fund manager Jim Baker.
Companies don’t have to be operating solely in Michigan to receive funding, Baker said, but a majority of their employees must be in the state.
Although the process of establishing the fund was only recently finalized, Baker said there has already been an incredible excitement about the venture.
“I would go so far as to say (we’ve had) an overwhelming response to the fund,” he said. “A lot of interest with a lot of really exciting companies.”
So far, Baker said he’s heard from approximately 30 companies, and ongoing talks are continuing with up to 12 of them.
The companies range from scooter and electric ATV companies to a company that has products in the golf space and Revolin – a company developing pickleball paddles and equipment.
“(A) broad sector of camping and outdoor experience, as well as traditional outdoor sports companies are in the portfolio right now,” he said.
It remains to be seen how many of the companies will ultimately receive funding, however; Baker hopes to finalize investments in three to five of the companies in the near future.
"We expect this fund to have real, direct benefits to the Upper Peninsula economy and further illustrate that the U.P. is positioned as a rural region to provide unique, strategic opportunity," said Marty Fittante, who is CEO of InvestUP, a lead economic organization funded by major employers in the Upper Peninsula.
"First, the new products being offered by the companies we invest in will increase accessibility and enjoyment of all the great outdoor assets and experiences the UP has to offer," he added. "Second, having a locally managed fund will be a valuable asset for entrepreneurs throughout the U.P. as they build their companies toward eligibility for our investment as well as from others around the state that we are building strong relationships with. And, lastly, it will also help us establish relationships with other funds throughout the State that will also benefit U.P.
innovators and entrepreneurs."
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Sam Shapiro, center, receives his check from the Outdoor Innovation Pitch.
One of the companies receiving funding is Grounded, which received a minimum investment of $50,000 for winning the
Outdoor Innovation Pitch at Northern Michigan University’s Innovation Week earlier this year.
Shapiro, a former SpaceX employee, said Grounded grew out of his experience during the pandemic.
“I ended up building a camper van in 2020 when COVID happened, and everything shut down. I traveled around the country and lived in the van full-time for about six months and worked remotely from the van. That’s sort of what sparked my interest in this space,” Shapiro said. “At first, I looked at RVs from the big RV companies and was pretty dissatisfied with what I saw as far as design, technology, sustainability, customizability. That’s why I built my own campervan and then later started a company to build smart, customizable electric camper vans.”
Grounded almost wasn’t a Michigan company. Shapiro said he was looking at warehouse space in Austin, Texas, in the fall of 2022, when he made contact with people from Newlab Detroit about locating in the Motor City.
“It was an amazing opportunity to come here and have the resources available from Michigan Central … and the manufacturing equipment and the start-up community and that sort of thing to obviously the resources in Detroit more broadly in terms of manufacturing resources and skilled labor,” Shapiro said. “It’s kind of a no-brainer and we decided basically that day we’re going to start the company in Detroit, and we’ve been here since.”
In November, the company moved down the street to its own 12,000-square-foot warehouse in Detroit’s Mexicantown.
Along with being fully electric, the custom nature of the company’s camper vans is among key features, Shapiro said.
“We call it a modular design system, it’s sort of like Lego blocks,” he said. “So, customers can choose from a menu of modules or a menu of components – indoor shower, outdoor shower, the wide kitchen, the narrow kitchen, the different size benches, the different size beds, overhead cabinets, different sized water tanks.
“As part of the purchase process, we work with customers to customize their interiors so they can choose which modules they want and where they want them to go," he added.
The designs can also be reconfigured in the future, according to Shapiro, so customers can change the layouts later by switching modules in and out.
It’s this versatility that sets the company’s camper vans apart from more traditional RVs, which often have only one or two floor plans available for purchase and force customers to rely on after-market vendors for any customization, he said.
“(Those can) cost a lot of money and there’s a huge wait time,” Shapiro said. “This is … in the middle, where you can get something custom but at a price that is more in line with a not-custom product.”
Although total amounts of money will vary, the size of the investment in Grounded is likely typical for the fund’s future investments, Baker said.
“Our average investment will be on the order of $50,000 to $150,000; and that will be typically into a round of financing into a company that’s on the order of $250,000 to $5 million,” Baker said. “We expect to be one of, on average, three to five investors in the company."
He added, "We’re looking for companies where that financing round will move them a long way towards product finalization – potentially some sales depending on the size of the company and the scale of the company – and otherwise set them up for follow-on financing, either through venture investors or bank financing."
Shapiro said Grounded will use the money to expand the company’s operation as it looks to increase sales.
“Generally, what we’re doing with this fundraising round is we’re scaling up sales this year off this campervan product,” he explained. “We’re basically expanding the engineering team to increase our manufacturing capacity and we’re increasing our go-to-market efforts and bringing the vehicle around to different events around the country over the course of the year to show it to people.”
Companies interested in being considered as investment opportunities can begin by going to the fund’s website,
michiganoutdoorfund.com, and completing a form.
If a company seems to be a potential candidate for investment, Baker said there’s an assessment to look at things like what other investors the company has and what the potential market for its products may be.
Although the initial investments are taking slightly longer to complete, Baker said he would ultimately like to see the decision process take as little as three to four weeks.
“One of our goals is to turn things around as fast as possible. Companies at this stage, time is one of their enemies,” Baker said.
Given the fledgling nature of the companies it’s considering, Baker said the fund is more willing to take a chance on an investment than more traditional funding sources.
“We’re looking at fairly high-risk companies. The companies that are low-risk, there’s funding available for them. But we also need something that has a plausible path to market,” Baker said. “It doesn’t have to be a guaranteed path to market, we’re in the business of taking risk, but we also have to be responsible with the fund we have.”
The returns the fund receives from its investments will be put back into the fund, according to Baker, and be used to support future companies.
Even if a company turns out not to be suitable for investment, Baker’s goal is to help them in any way he can and put them in touch with other possible resources around the state.
“We want the companies we invest in to be successful,” he said. “But we also want the companies that we talk to that maybe aren’t quite there yet – how can we help them get there?”
Information on the investment fund can be found at the
Michigan Outdoor Innovation Fund. Information on Grounded can be found at the company’s
website or Instagram page.
A former reporter at the Ironwood Daily Globe, Richard Jenkins moved to Ironwood in 2015. He was born and raised in Metro Detroit. He may not have been born in the Upper Peninsula but got here as soon as he could.