Congrats to the Accelerate Michigan bplan competition semi-finalists, including six a2newtech alumni (Current Motor, Ix Innovations, Life Magnetics, PowerLEAP, Reveal Design Automation, and Therapy Charts) and 17 other Ann Arbor companies!

http://www.accelerate...

An interesting challenge to anyone following this - how many of these are actually startups (defined by UM alum and Stanford prof Steve Blank as "an organization formed to search for a repeatable and scalable business model")?

Not to be harsh, but it seems to me that some of these companies (including one founded in 1969?!) are well past the startup stage - and a "business plan competition" including them is simply post-hoc analysis (I wish I could invest in some of these retroactively! :-)

Agreed Dug, regarding your assessment of the startup nature (or lack thereof) of these competitors.

The local investment community seems challenged to assess the potential of real startups, as opposed to more established communities in Boulder and the Valley I have experience with. They also look at each investment as part of a portfolio, where here they want to know for certain that every investment is on a clear path to unmitigated success. Maybe some day they'll learn - until then more local startups won't see the light of day, or will find it elsewhere.

BTW, since Dug brought it up, you all should see Steve Blank's great Failcon10 presentation:

http://www.slideshare...

Should be required reading for local folks involved with startups, but that's another post...

Dave
buycentives.com

That preso is gold. The book he references, "Business Model Generation" (http://www.businessmo..., is standard issue for True Ventures companies (our lead investor) - I last lent my copy to the Slashdot founders in the Tech Brewery, who are off building "the RedHat of embedded systems".

I worry that PR-driven b-plan competitions like this that struggle to find (or highlight) real startups only highlight the lack of real deal flow here. Or as you point out, the deal outflow, with startups finding more support outside of the state.

I went through the list of the final 45 in the competition and my response was that for the most part these sounded like real and quality companies. Yes, they didn't really sound like startups. But my take-away was how hurting Michigan is for funding if these are the type of companies are chasing a rather measly $500K "Grand Prize" through the competition.

And note as per a discussion I had with Dug on Friday, if there's not $2M of dry powder to back up the $500K, then we're talking about a further immaterial amount of funds coming from the competition. And Dug says that in the past he's taken $500K before with the proviso that it better come with that dry powder, so this confirms the thought.

My estimates are that Michigan's inherent factors of inventiveness suggest that it should have $2B of venture capital funding A YEAR, with $120M going into early stage companies. As per PWC MoneyTree MI got only $135M of total VC funding in 2009 and only $13M into seed/startup. That's how hurting!

As for Steve Blank, via a referral from Kauffman Foundation and some internet sleuthing I got a chance to talk to Steve. Pitched him my new paradigm seed venture capital fund idea. He begged off without a first hearing. ;-( Small world.