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Home > Resources > Entrepreneurs > Funding Sources

Funding Sources & Local Business Resources

Financing for Start-up Projects & Companies

• NBD Specialists can provide assistance with the following:
  • Developing a funding strategy
  • Accessing funding sources
  • Investor introductions
  • Creating presentation or proposal materials
• Financing must be tied to the overall commercialization path. It is critical that the needs of the potential start-up and the requirements of the funding source match.
  • Determine the appropriate amount of funding
    • linked to development path milestones in business plan
    • divided into rounds (stages)
  • Determine the appropriate sources
    • equity bearing: self, friends and family, angels, venture capital
    • non-equity bearing: grants
  • Determine appropriate uses
    • milestone based
    • limits on uses from different sources
    • ideally show increased valuation at each investment round

Funding for Commercialization Projects

• Funding for Technology Development
  • OVPR Faculty Grants and Awards - Provides funding for proof of concept activities including initial prototypes. This funding is limited to $15K.
  • Clinical and Translational Research - New Pilot Program - Provides funding to facilitate collaborative research projects that cross the boundaries between basic and clinical research.
  • College of Engineering Technology Development Fund - Provides funding for later-stage research activities, typically performed within the university lab, for technology refinement, proof-of-concept, and other technology risk reduction initiatives.
  • Michigan's 21st Century Jobs Fund - Michigan's 21st Century Jobs Fund fosters growth in advanced automotive technologies, homeland security and life sciences industries through funding and resource collaboration, focusing on emerging technology sectors. Financing is available through a competitive proposal process.
• Funding for Business Development
  • UM Tech Transfer assists some of its promising projects to answer key “Gap” issues (risk issues that hinder the attraction of outside resources and commercialization). These small investments (often $5K to $50K) can be leveraged by matching funds from 3rd party sources and MUCI (see below.)
  • Michigan Universities Commercialization (MUCI) Challenge Fund - Provides matched funding to assist innovative life science research projects that are sponsored and submitted by the university tech transfer office.
  • Michigan's 21st Century Jobs Fund - Michigan's 21st Century Jobs Fund fosters growth in advanced automotive technologies, homeland security and life sciences industries through funding and resource collaboration, focusing on emerging technology sectors. Financing is available through a competitive proposal process.

Funding for For-Profit Businesses

• Grants and Awards
  • There are many grants and awards that offer a reliable source of non-dilutive capital to fund research and development for small businesses.
  • The New Business Development Specialists can help you identify and assess programs that fit your needs.
    • SBIR (Small Business Innovation Research) programs are competitive awards administered by the SBA (Small Business Administration) to encourage the commercialization of technology within small U.S. companies (less than 500 employees.)
    • STTR (Small Business Technology Transfer Research) programs are competitive awards administered by the SBA (Small Business Administration) to promote joint research between non-profit research institutes and small high technology companies (less than 500 employees) located in the U.S.
    • Michigan's 21st Century Jobs Fund - Michigan's 21st Century Jobs Fund fosters growth in advanced automotive technologies, homeland security and life sciences industries through funding and resource collaboration, focusing on emerging technology sectors. Financing is available through a competitive proposal process.
• Angels
  • Angels are those high net worth individuals (Accredited Investors) that make equity investments as individuals or as part of a group in early stage companies. This may be a passive or active investment. Active investment may mean a role in management, bringing in the next round of capital, help in establishing strategic alliances, etc.
  • The New Business Development Specialists, through their relationships with angel investors and role as qualified screeners for some of the angel groups, can facilitate the introduction to angel investors.
    • Ann Arbor Angels - is a collaborative non-profit organization dedicated to bridging the gap between angel investors and early stage technology-based companies in Southern Michigan. The focus of the organization is to facilitate private equity and debt financing.
    • Great Lakes Angels is a non-profit organization that is dedicated to enhancing the Angel Investor community in the State of Michigan and Region. The Great Lakes Angels provides networking opportunities with other qualified, sophisticated Angel Investors locally, and regionally.
    • Grand Angels - utilizes its financial, intellectual and networking capital to promote the success of young growing companies and to enhance the economic development of West Michigan. The Grand Angels is one of many so-called “Angel bands” around the country, committed both to making profitable investments and to community economic development.
    • Aurora Angels - is a seed/early stage angel capital group composed of and run by angel investors and investment professionals. This organized group of angels focuses on nurturing high-growth businesses that are developing innovative products and services in the cleantech, alternate energy, advanced materials, automation, telecommunications and information technology areas. The primary geographical focus is on northwestern lower and the eastern upper peninsulas of Michigan, although they will address outstanding opportunities throughout the state of Michigan.
    • Angel Capital Association (ACA) is North America's professional alliance of angel groups. This fast-growing association brings together the 200 angel organizations in the United States and Canada to share best practices, network, and help develop data about the field of angel investing.
• Venture Capital
  • Venture capital firms are interested in investing in businesses with significant revenue potential ($10 to 100 million in revenue) and with an achievable exit strategy in 3-5 years. Some firms are interested in early stage developments where the risks are high, the payoff three-to-ten years into the future, and investment returns and ownership stakes are fairly high. Other firms are more interested in later stage investment opportunities where risk has been minimized, and returns may be in shorter in term but smaller. Often Venture Capital firms also have industry and/or geographic preferences.
  • New Business Development Specialists maintain contacts with and profiles the interests of many venture capital firms throughout North America enabling them to provide strategic funding assistance and targeted introductions. Your NBD Specialist can assist in planning for and introductions to venture capital firms throughout the country (too numerous to be listed here.)
    • Michigan Venture Capital Association (MVCA) - The MVCA is comprised of and organized by venture capital, private equity and professional services firms with the common interest of promoting investment activity in the State of Michigan in hopes of making it one of the best state's in the country to build new businesses.
    • Mid-America Healthcare Investors Network (MHIN) - MHIN is an association of more than thirty-five venture capital firms from ten states, with more than two billion under management. MHIN focuses on life science investment opportunities in the Mid-America Region.

Local Business Resources

• Ann Arbor is fortunate to have an active infrastructure for networking to entrepreneurial resources. Some of these include: (these will all be links to the sources web sites)
  • Ann Arbor IT Zone - brings together entrepreneurs, emerging and established IT-oriented companies, business services providers, university resources and community leaders to stimulate IT business development. The IT Zone provides business assistance, training, mentoring and technology demonstrations along with engaging speakers, panel discussions and conferences.
  • Michigan Small Business and Technology Development Center (SBTDC) - enhances Michigan's economic well being by providing counseling, training, research, and advocacy for new ventures, existing small businesses and innovative technology companies.
  • MichBio - is chartered to increase the understanding of biotechnology and to support the growth of bio-based businesses in Michigan.
  • New Enterprise Forum (NEF) - a group consisting of investors, businesses and service providers who meet monthly to hear presentations on new local business opportunities and topics of general business interest.
  • Arbor/Ypsilanti Business Accelerator - concentrates its efforts on growing small companies that are established and/or currently exist in the community. While remaining open to new technologies, the Business Accelerator focuses its efforts on industries with high potential for utilizing two or more of the area's historic competencies, which include: advanced manufacturing, alternative energies, information technology, small technology, life sciences and wireless technology.
  • Great Lakes Entrepreneur's Quest - The mission of the Great Lakes Entrepreneurs' Quest, and its business plan competition, is to continually encourage and educate entrepreneurs on the creation, start up and early growth stages of high-growth businesses within the state of Michigan.