A major injection of venture capital is now moving through Michigan’s startup economy.
Governor Gretchen Whitmer recently announced the rollout of the Michigan Innovation Fund—a $60 million investment designed to boost Michigan-based venture capital and seed new business growth across the state. Five established investment organizations are set to receive the bulk of the funding, with smaller shares allocated toward emerging funds and support programming for entrepreneurs.
It’s the largest single commitment to the state’s entrepreneurial ecosystem since the creation of the 21st Century Jobs Fund in 2005. The fund also marks Michigan’s first step into evergreen structured investment, which allows profits from successful startups to be reinvested rather than redistributed to investors. But as this milestone takes shape, a critical question rises: will this funding reach the Black founders and organizations who have historically operated on the margins of Michigan’s venture economy?
According to the Michigan Economic Development Corporation, $48 million will be invested into five existing evergreen funds: ID Ventures (Invest Detroit), Ann Arbor Spark, University of Michigan’s Accelerate Blue Fund, the Michigan State University Research Foundation, and Western Michigan University’s Biosciences Research & Commercialization Center. Each will receive $10.6 million, with the exception of WMU, which receives $5.3 million. Another $4.8 million will go toward three emerging funds based in Northern and Western Michigan—InvestUP, 20Fathoms, and Grand Valley Research Corp. The remaining $7.2 million is earmarked for entrepreneurial support and a statewide pitch competition.
Within that $7.2 million, $3 million is being directed to universities or nonprofits that offer high-quality entrepreneurial programming with statewide economic impact. Another $4.2 million is open for Michigan-based nonprofit organizations that provide qualified startup support services—specifically those running programs like startup accelerators, innovation convenings, and founder training.
This breakdown creates an opening for deeper reflection. Across the state, several Black-led and Black-serving nonprofits already provide these kinds of services. Their work spans startup education, capital readiness, culturally competent mentorship, and access to community-based networks often absent in traditional VC spaces. Will those organizations be prioritized? Will those closest to the ground, and to the communities that have lacked institutional backing for generations, be directly resourced?
Venture capital has never been neutral in its distribution. A 2022 Brookings Institution report found that Black-founded startups receive less than 1% of venture capital in the United States. Black women, who represent one of the fastest-growing segments of new business owners nationwide, receive only 0.34% of annual VC funding. These disparities aren’t anecdotal. They are data-driven, persistent, and structural.
Michigan’s innovation ecosystem ranks 32nd in growth funding nationally, 36th in seed funding, 23rd in early-stage funding, and 35th in late-stage funding, according to a recent Business Leaders for Michigan report. The Innovation Fund was designed to change those rankings. But how will progress be measured beyond financial return? What benchmarks will be used to track equitable access? And how will the state ensure that founders from historically underrepresented backgrounds are not simply invited to apply, but equipped to succeed?
Craig Wesley of 20Fathoms, one of the emerging funds receiving $1.6 million, noted that “access to capital is a particular challenge for entrepreneurs and startups here in the Traverse City region.” That challenge echoes across neighborhoods in Detroit, Flint, and Benton Harbor—cities where Black entrepreneurs often operate without formal investment, relying instead on family support, crowdfunding, and sheer resilience.
The fund is structured to be evergreen, meaning it can continue to reinvest in Michigan startups over time. According to the Michigan Innovation Fund’s guidelines, any return on investment exceeding $8 million within 15 years will be shared—10% going to the state, and no less than 85% being reinvested into the fund. Proceeds come from the Venture Michigan Fund, formed under the 2003 Michigan Early Stage Venture Investment Act. Though the state initially expected to receive returns by 2030, Governor Whitmer advanced $100 million early, designating $60 million to the Innovation Fund and the remaining $40 million to the general fund.
Patti Glaza of Invest Detroit, one of the recipients of the fund and a central advocate for its creation, was recently recognized in Crain’s Women of Influence for her role in leading this initiative. Her organization’s investment arm, ID Ventures, is no stranger to the Detroit landscape—but the broader question remains: how will this opportunity reshape the capital landscape for those whose innovations exist outside of university labs and tech corridors?
There is no shortage of innovation in Detroit’s Black community. From bio-based beauty products developed on the Eastside to app developers working out of co-working spaces on the Avenue of Fashion, the creativity exists. The commitment to growth exists. What’s been missing is sustained, accessible capital—and trust in grassroots leadership.
Multiple nonprofit organizations across Michigan, particularly in Detroit, already run startup accelerators, founder fellowships, and pitch labs aimed at equipping Black and Brown entrepreneurs with business acumen, technical support, and network access. Many of these programs operate without the security of multi-year funding. They compete for short-term grants. They mentor dozens of founders with minimal administrative capacity. The Innovation Fund’s $4.2 million nonprofit investment pool presents a potential game-changer—if deployed with intention.
Yet intention alone cannot solve decades of exclusion. If the application process favors groups already connected to state agencies or major universities, grassroots organizations may again be shut out. If pitch competitions reward polished presentations over community-rooted innovation, transformative ideas will remain unfunded. Equity cannot be performative. It must be operationalized.
The fund arrives at a time of shifting federal priorities. Many COVID-era programs that supported Black businesses and community development initiatives are ending. At the same time, national philanthropic support for racial equity is seeing slower follow-through than initial commitments suggested. The result: community-based organizations are being asked to do more with less, just as state investment is finally expanding.
Michigan’s Innovation Fund holds real potential. It could close long-standing capital gaps, seed generational wealth through business ownership, and increase the diversity of the state’s investment portfolio. But that will depend on more than who gets the money—it will depend on who sets the terms.
Which communities are consulted? Which founders are mentored through the process? Which data is collected to ensure that race, geography, gender, and business sector are not just noted but meaningfully considered?
And for Detroit—the largest majority-Black city in the state—how will accountability be built into every level of this fund’s design and deployment?
This moment asks more than celebration. It calls for scrutiny, strategy, and solidarity.
The Michigan Innovation Fund is here. It is real. But its legacy will be defined by whether it can move the dial for those long shut out of the room. Whether it can reach into ZIP codes beyond the usual startup hubs. Whether it can back ideas not because they mirror what’s worked before, but because they reimagine what’s possible.
Applications are now open. Michigan-based nonprofit organizations that provide qualified startup support services—especially those leading accelerators, founder bootcamps, and innovation convenings—are encouraged to apply. Those ready to build, expand, and lead the future of Michigan’s entrepreneurial landscape can find more information and submit proposals through the Michigan Innovation Fund website.
That is the challenge. And that is the opportunity.