Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Contact Page
November 26, 2012
Grant Application to:
MICHIGAN ECONOMIC DEVELOPMENT CORPORATION (MEDC)
MICHIGAN STRATEGIC FUND (MSF) BOARD
ST
21 CENTURY JOBS FUND
2013 BUSINESS INCUBATOR PROGRAM
Applicant:
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Grand Rapids SmartZone Local Development Finance Authority
th
300 Monroe NW, 9 Floor
Grand Rapids, MI 49503
In Conjunction with:
Grand Valley State University, Center for Entrepreneurship and Innovation as the Manager of:
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The Grand Rapids SmartZone
301 Michigan Street NE, Suite 537
Grand Rapids, MI 49503
Grand Valley State University EIN: 38-1684280
City of Grand Rapids EIN: 38-6004689
Applicants Category:
Kent County
Contact:
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J. Kevin McCurren, Executive Director and Interim Director SmartZone
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Grand Rapids SmartZone
Email: mccurrke@gvsu.edu
301 Michigan Street NE, Suite 537
Grand Rapids, MI 49503
Phone: 616-331-7377
Cell: 502-298-3137
Fax: 616-331-7583
Authorized Official:
Kara Wood,
Executive Director
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Grand Rapids SmartZone Local Development Finance Authority
300 Monroe NW, 9th Floor
Grand Rapids, MI 49503
Email: kwood@grand-rapids.mi.us
Phone: 616-456-3196
Conflict of Interest:
I, Kevin McCurren, affirm that to the best of my knowledge, there exists no actual or potential conflict between the
Applicant, the Applicant‘s project manager(s) or its family‘s business or financial interests (―Interests‖) and the MSF or the
MEDC.
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
2. Application Check List



1) Contact Page/Applicants Category ............................................................................................. 1
2) Check List Page and Verification of Operational(Appendix A) ................................................... 2
3) Proposal ...................................................................................................................................... 3
 A) Executive Summary........................................................................................................ 3
 B) Proposed Services ...................................................................................................... 4-7
 Required Services
 Explanation of Program
 Recommended Services
 C) Past Experience .......................................................................................................... 7-8
 D) Team, Facilities, Partners, Vision .............................................................................. 9-10
 Key People
 Partners/ Facilities
 Vision
 E) Milestones/deliverables ........................................................................................... 11-12
 F) Budget… .................................................................................................................. 13-17
 Proposal Budget
 Organization‘s P&L and Balance Sheet
 Organization‘s P&L and Budget over term of proposal
 G) Economic Impact………………………………………………………………………....18-19
Appendices
A. Verification of Operation (copy) signed letter included with LDFA letter of support.
B. GVSU Business Services
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C. SmartZone Incubator
D. Sample Michigan iStart Curriculum
E. Letters of Support and signed Verification of Operation
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
3. Proposal A) Executive Summary
Name of the applicant Organization: Grand Valley State University; Center for Entrepreneurship and Innovation
(CEI), as the Grand Rapids SmartZoneSM service contractor
Amount of Funds Requested:
Amount of Matching Funds:
$840,000
$849,235
Term:
Category Area:
3 Years
Kent County
The Grand Valley State University‘s Center for Entrepreneurship and Innovation (―CEI‖) and the Grand Rapids
SmartZoneSM, is requesting an $840,000 grant from the 21st Century Jobs Fund, Business Incubator Program.
Located in the category area of Kent County, Michigan; the Grand Rapids SmartZoneSM will use the grant to
fund a new Michigan iStart Program for a period of three years. The program is a competitive business launch
program that is expected to create 40 new businesses over a three year period. Additionally, the competitive
launch application will improve the potential for 200 + companies that will apply but not be accepted in the
iStart program.
Since February 2012 CEI has been involved in the business accelerator of the Grand Rapids SmartZoneSM
overseeing the Small Business Technology Development Center Business Accelerator Fund on behalf of the
Grand Rapids SmartZone℠. CEI along with the Grand Rapids LDFA are committed to aggressively seeking
and exploiting opportunities to create businesses in the State of Michigan. As an avenue for accomplishing
this goal, the Grand Rapids SmartZoneSM is requesting funding for a business launch program called Michigan
iStart.
CEI will be the organization managing the competitive launch program that will involve participants from three
different business sectors in Michigan; Colleges and Universities, Large Organizations\Corporations, and Small
Enterprises\Individual Teams\Not for Profits. Each business sector will offer industry specific benefits and
requirements, in order to encourage applicant teams. For example, university applicants will be offered course
credit by the team‘s home university. Corporations and large organizations will allow employee release time.
Once accepted in the iStart program, teams will be integrated into community startup ecosystems and,
preferably, housed within a common work space. The collaborative space and programs will encourage
multidisciplinary exchange and problem solving. The iStart program is designed to help tech and high growth
teams (2-4 members) launch a business by providing a small amount of startup capital, a structured startup
advancement platform, mentorship, and workspace. Before applying for the iStart program, most teams will
have completed an entrepreneurship preparatory course.
After a six month startup, eight teams will be admitted to iStart every six months. Upon admittance, each team
will be offered membership to StartGarden, The HUB Grand Rapids, a co-working space, and Launch Plan, an
online collaborative business plan generator. As part of the acceptance process, each team will be required to
establish milestones and deliverables. Teams will be evaluated and periodically assessed against milestones.
Each team will have multidisciplinary mentorship and access to technical experts. In addition to business
support services, each team will receive between $10,000 - $25,000 in startup capital. The seed capital will
be issued in terms of a convertible note or equity. After launch, seed capital with proceeds will be repaid upon
funding events. Finally after a successful initiation of iStart at the Grand Rapids SmartZoneSM, CEI will offer the
iStart program at other SmartZone℠ locations throughout Michigan. Using the platform, CEI will work with
other SmartZone℠ incubators to establish satellite locations throughout the state for the iStart program.
Targeted Numbers Annually
Companies Created
Jobs Created
Jobs Retained
Increase Investment/Revenue
Year 1
8
8
0
$160,000
Year 2
16
28
8
$520,000
Year 3
16
56
28
$970,000
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
B) Proposed Services
The following is a Summary of the proposed iStart Launch Program:
iStart Accelerator: A competitive launch program, Three Programs Directed at Three Different
Audiences:
1. College and University Program- The College/University iStart program is designed to be an advancement of
the Business Plan competition. This will be a launch program designed to help student entrepreneur teams launch
businesses. The program will encourage student entrepreneurs to act on their business plans or developed ideas by
providing startup capital, access to early stage capital, access to technical resources and business support. Teams
will be expected to execute on a development plan and attend programs and classes related to the iStart program.
The program will be open to all Michigan public universities and will build off of GVSU‘s eight school West Michigan
College and University Group
2. Corporate and Large Organization Program—The Corporate iStart Program is designed to assist corporate
partners and large organizations in developing new businesses and intrapreneurship. This program will help
corporate managers and teams launch new businesses and ideas by providing external and multidisciplinary
assistance. The program will provide startup capital, access to early stage capital, access to technical resources and
business support and will encourage multidisciplinary approaches to problem solving.
3. Small Enterprise—The Small Enterprise iStart program is designed to assist small Not for Profits, businesses and
individualized teams in developing technology and high growth new businesses. The program will provide startup
capital, access to early stage capital, technical resources and business support for businesses that are high tech and
have potential of being self-sustaining and profitable. Applicants will be expected to provide a return on investment.
Multidisciplinary approaches to problem solving will help teams‘ access resources.
1. iStart is a competitive launch program including the following:
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a. Applicants apply with a proposal (abbreviated business plan). The SmartZone plans to use the Kaufmann
iStart program. This program will provide statewide access to the program.
b. Two-four teams will be accepted from each category program. The number of teams in the program will be
between six-nine at any time; 16 annually in full operation.
c. A new cohort of six-nine iStart teams will start every six months. Applicants within the Small Enterprise iStart
program may be accepted outside the six month cohort to provide preparatory work. Acceptable applicants
will receive the following:
i. Equity\Convertible Debt between $10-25K. Structure of funding will depend on the program. Returns
from investments will be returned for reinvestment in the iStart program
ii. Designated mentors and start-up coaches
iii. Membership into StartGarden and the HUB Grand Rapids. The HUB Grand Rapids will be the
common workspace. StartGarden, an early stage fund will provide networking programs. The
access to joint workspace at the HUB Grand Rapids is available to teams through the existing
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SmartZone agreement.
iv. A proactive program designed to move the team toward launch. Before entering the program, each
team will be required to have a development plan and milestones. Over the six month period
progress will be judged against the development plan and adjusted accordingly.
d. iStart companies will work on their business via Launch Plan, an interactive business plan program that can
be jointly used by teams, mentors and the iStart program director and instructional manager.
e. Teams will execute on a development plan and attend programs and classes related to the iStart program.
f. Each 6 months iStart will hold a public launch including public pitches with a focus on investment potential.
iStart will also use the public launch to showcase the program and companies to the public.
Colleges, universities, organizations and corporations participating in iStart will be expected to:
1. Conduct, provide, or engage in a preparatory course to prepare teams to apply to the iStart program.
2. Provide personnel for mentorship/advising to iStart teams. Cross disciplinary exchange is important to iStart.
3. Participate in program specific (Universities/Colleges, Corporations, Not for Profits, Small Organizations) investment
committees that will be part of the selection process.
4. Participate in the community programs that are part of the iStart program including StartGarden, the HUB Grand
Rapids and other statewide programs.
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Colleges and Universities will be expected to:
1. Provide iStart college credit and assist in release time.
2. Assist in educational aspects of the program.
Corporations and Universities will be expected to:
1. Promote the program within their organizations
2. Give teams release time and compensation.
Small organizations in the Program will be expected to:
1. Promote the program within their organizations
2. Have policies and programs to define ownership and
incentives associated with ideas
3. Assist in educational aspects of the program
4. Work with iStart to create investment returns
3. Give teams release time and compensation.
4. Assist in educational programs
5. Work with iStart on investment returns
Process for iStart Applicants
1. Applicant teams will apply on a semi-annual basis for dates starting: January 1 & June 1
a. College and Universities (six annually); Corporate/Large Organizations (six annually); Small
Organizations/Teams (four annually)
2. Applications will be completed by submitting a 6 page Executive Summary
a. iStart will provide an electronic template
c. Engagement will be for six months
b. Teams must be at least two members and
not more than four
3. Selections will be made via three-five member selection committees comprised of constituents from each group, i.e.
Universities/Colleges, Corporations/Large Organizations, NFPs/Small Organizations
4. Upon selection each team will:
a. Sign a contract defining milestones and
c. Enter into an investment agreement
obligations
d. Become members of the HUB Grand Rapids
b. Provide release forms from employer as is
and StartGarden, if appropriate
appropriate
The iStart program will initiate in West Michigan and be targeted toward current relationships with corporations, colleges
and universities, and small organizations in West Michigan. Though open to all of Michigan, the program will appeal to
teams that can take advantage of the workspace and networks associated with the HUB Grand Rapids and StartGarden.
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Likewise LDFA funding requires the SmartZone to invest in companies linked to the geographic territory of Grand
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Rapids SmartZone . Using the learning experiences of the first year, CEI and the Grand Rapids SmartZone will seek
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to expand the program through partnerships in other SmartZones and Universities throughout the state. The Grand
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Rapids SmartZone will also explore the potential of expanding the program through a virtual iStart program that can
produce similar results in expanded geographical settings.
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The Grand Rapids SmartZone would expect the iStart program to support 40 launches over the three year period. Past
experience projects that each company would start with one Full Time Equivalent (FTE) employee in year one, add one
and a half FTEs in year two, and add two FTEs in year three. The average capital investment per team is expected to be
$20,000, which is expected to grow at annual rate of 25%.
iStart
Networking
Awareness
Corporate
Partners
iStart invite
and
encourage
ment
Prepatory
course as
needed
i Start Proposal
Business Sector
6 page
business plan
or exec
summary
Investment
Committee
Review
i Start
Invitation
to
comprised of
sector
participants
Organizatio
n and teams
- 3 months
iStart
iStart Program (0-180 days)
Follow-up and
tracking
Every 6 months.
Day 180
Launch prep--(0-120 days)
Launch
Celebration
Capital Development (90-180
Days)
Investment
Pitches
Launch Plan--interactive business
plan
StartGarden/Hub membership
Team Start
Mentor
Assigned
Program
Initiation
Day 0
Acceptance
and
Agreements
Milestones
and plans
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
1. A plan that demonstrates the sustainability of the organization.
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Since 2003, the Grand Rapids SmartZone has been an entrepreneurial staple in the West Michigan economy. The
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SmartZone was created as a joint effort between many of the most influential organizations in West Michigan.
2. A plan that demonstrates the organization takes a leadership role to coordinate with local/regional partners
including the local university, local economic development agency, statewide service providers.
CEI is a central hub capable of linking the resources of University with emerging and high-growth business innovations.
As one of the most comprehensive business support networks in Michigan, CEI is dedicated to sharing knowledge,
expertise, and opportunities within the Michigan business community. The Business Connection is served by the website
business resource portal developed as entry point to help businesses and companies‘ access university resources. The
web resource portal can be found at http://www.gvsu.edu/businessresource/service.htm.
3. A plan that demonstrates the organization supports and participates in business plan competitions.
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CEI and the Grand Rapids SmartZone are participants and organizers in many competitions. GVSU has an annual
business pitch and business plan competition. CEI also organizes and coordinates the West Michigan College and
Universities (WMCUG) Regional Business Plan Competition which combines the winners of seven local collegiate
business plan competitions in a tournament of champions including Aquinas College, Calvin College, Cornerstone
University, Davenport University, Grand Rapids Community College, Hope College, and GVSU. GVSU has been holding
business plan competition since 2008 and has had 198 participants to date. As a result of the competitions, a total of
$60,000 of prize money has been awarded to 11 businesses.
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Additionally CEI and the Grand Rapids SmartZone are the West Michigan contact for the statewide and regional
competitions including the Clean Energy Challenge, Accelerate Michigan, and the Annual Collaboration for
Entrepreneurship and Impact Engine in Chicago. GVSU is also an invited university to the Texas Christian Value Based
Competition, the annual Business Model Competition and the CEO pitch competition. Teams are represented in each of
the competitions.
4. A plan that demonstrates the organization maintains a list of talent resources that the incubator/accelerator
uses to assist clients.
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The Grand Rapids SmartZone and CEI both maintain a comprehensive list of resources within the community. The
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Grand Rapids SmartZone is a state based participant in the Salesforce network. CEI currently maintains a database of
2500+ business contacts, organized into three categories (entrepreneurs, investors, and service providers). CEI is in the
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process of merging this list into a Salesforce database, which is maintained by the Grand Rapids SmartZone . CEI is
also the lead West Michigan participant in the Tech Transfer Talent Network (T3N), a statewide collaboration to share
tech transfer talent and networks. These contact lists can be made available upon request.
5. A plan that demonstrates the organization provides professional development for the business
incubator/accelerator personnel.
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The SmartZone provides personnel with many opportunities for professional development in all areas of business.
Strategic partners such as GVSU, StartGarden, The HUB Grand Rapids, and MEDC, as well as memberships in industry
organizations such as MBIA (Michigan Business Incubator Association), NBIA (National Business Incubator Association),
ACE (Annual Collaboration of Entrepreneurs), and GLEQ (Great Lakes Entrepreneur Quest), allow for professional
development
6. A plan that projects future outcomes based on past performance and reporting metrics to the MEDC.
Over the course of the iStart program, the program will invest $20,000 in 40 new businesses in sectors defined by MEDC
as having a high potential for growth. The total cost of the iStart program will be $1,689,235, meaning that each new
company will be created for a cost of $42,230. MEDC is being asked to grant $840,000 to the Michigan iStart program,
meaning that MEDC will see a return of one new Michigan business for every $21,000 invested.
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
C) Past Experience
CEI was awarded the contract to manage the SmartZoneSM in October of 2012; and has since begun the
process of restructuring and modifying the administration. As a result, this proposal is being submitted by CEI
on behalf of the Grand Rapids SmartZoneSM. For this reason, the past experience of both CEI and the
SmartZoneSM are important in representing the positive community impacts of the applicant organization.
CEI is a comprehensive hub designed to build capabilities and capacities in entrepreneurship to strengthen
West Michigan‘s economy. The center provides cutting-edge theory and hands-on experience to support
current and future entrepreneurs.
One example of business accelerator services provided by the CEI is the administration of the Small Business
Technology Development Center Business Accelerator Fund. CEI began administering the Business
Accelerator Fund on behalf of the Grand Rapids SmartZone℠ in September, 2012. Accelerator services focus
on business milestones such as positioning a company to attract private capital, developing a stronger
business plan or marketing strategy or securing its first customer. The program targets companies with
characteristics that typically provide the highest return on investment for business and job growth. Preference
goes to high-technology firms in renewable energy, life sciences, homeland security and defense, advanced
manufacturing and materials, and others. In its three months of operation, the Grand Rapids Business
Accelerator Fund has awarded 6 companies more than $100,000, and has assisted more than 40 companies
in various capacities.
In 2011, CEI was awarded a $61,000 grant from the Michigan Initiative for Innovation & Entrepreneurship
(MIIE) to run the inaugural Michigan Green Technology Entrepreneurship Academy (MI-GTEA). MI-GTEA is an
innovative, intensive five day course designed for science and engineering faculty, postdocs and PhD students
who want to learn to commercialize their research, prepare for a career in industry, or take the first steps
toward launching a new venture. The Academy is a springboard for moving new clean-tech ideas out of the
lab. Likewise, CEI was recently awarded an MIIE grant to conduct a farm/agriculture entrepreneur academy in
conjunction with Saginaw Valley State University and Ottawa Extension Center. The farm/agriculture
entrepreneur academy will focus on helping natural resource based enterprises develop new businesses.
For a complete list of business services offered by CEI see Appendix C.
The mission of the Grand Rapids SmartZone℠ is to support growth in new businesses in sectors defined by
MEDC as having high potential for growth, through accelerated technology commercialization. These high
growth potential sectors include advanced manufacturing, alternative energy, homeland security and defense,
life sciences, agricultural processing, advanced commuting, and advanced information.
The Grand Rapids SmartZoneSM was originally formed through collaboration between Grand Valley State
University, Van Andel Research Institute, the City of Grand Rapids, Grand Rapids Community College and The
Right Place, Inc. The collaboration has expanded to include Michigan State University College of Human
Medicine, Spectrum Health, Saint Mary‘s Health Care, Mary Free Bed Rehabilitation Hospital and the Grand
Angels. Together the partners assist in the commercialization of ideas and corresponding new products,
develop collaborations for infrastructure and possibilities for new product development, and provide valuable
connections that bring together individuals and businesses to spark new opportunities. With the recent
restructuring of the Grand Rapids SmartZone℠, CEI is contracted to manage the incubator and accelerator with
the intent to create a more aggressive entrepreneurial environment.
One example of a tool that helps facilitate the process is the SmartZoneSM incubator facilities, a community
asset for incubation and acceleration of high-technology businesses. Entrepreneurs can take advantage of the
incubator/accelerator amenities and services located in Cook-DeVos Center for Health Sciences at Grand
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Valley State University. As the SmartZoneSM continues to create opportunities to ensure the growth of high
potential businesses in Michigan, the SmartZoneSM partners are poised to build on shared success thus far.
The Grand Rapids SmartZone was a recipient of the 2012 21st Century Jobs Fund for Business Incubation.
The $500,000 grant was awarded to the LDFA for use in the restructure and subsequent management of the
Grand Rapids SmartZoneSM. In 2010, the Grand Rapids LDFA contracted with a consultant to complete an
intensive review of the existing incubator and accelerator services currently offered, along with the outcomes
delivered. The recommendations for implementation, posed by the consultant, will take the existing incubator
and accelerator to the next level of performance. The recommendations will result in a modification to the
current administration of the programs and requires substantially more investment. As a result, the Grand
Rapids SmartZoneSM LDFA and CEI submitted a proposal and were awarded the $500,000 grant. CEI was
awarded a contract to manage the SmartZoneSM in October of 2012; and has since begun the process of
restructuring and modifying the administration.
For more detail about the past experience of the SmartZoneSM incubator see Appendix – D.
The funds requested in this proposal will be used to fund a Michigan iStart program, through a partnership with
Michigan colleges and universities; with the seven West Michigan area colleges and universities (GVSU,
Davenport University, Hope College, Grand Rapids Community College, Kendall College of Art and Design,
Cornerstone University, Aquinas College, Ferris State University) being the primary partners. Other primary
partners will come in from Michigan corporations and small enterprises. The Grand Rapids SmartZone℠
managing the iStart program and the finances and will be part of the Grand Rapids SmartZoneSm accelerator
and incubator program. The iStart program will have a dedicated program manager and instructional
coordinator. MEDC funds allocated toward this program will be used for the equity component of the program.
LDFA funds and GVSU funds will be used to support the operational portion of the program.
The iStart program will complement and amplify current programs and allow the Grand Rapids SmartZoneSM to
maximize community programs including but not limited to regional competitions, StartGarden, and the HUB
Grand Rapids. West Michigan, like many parts of Michigan does not have access to extended launch
programs or boot camps. Because of the presence of early stage capital in Grand Rapids, including
StartGarden, Michigan Accelerator Fund, and the Grand Angels, iStart is a complementary entrepreneur
program that will accelerate current programs.
iStart is distinct from previous grants with separate staffing and capital allocation. Program recipients will be
distinct from other programs.
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
D) Team, Facilities, Partners, Vision
Organization
LDFA Board Executive Director, Kara Wood
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Grand Rapids SmartZone Manager, CEI/GVSU
J. Kevin McCurren, Interim Exec Dir
Michigan iStart
Program Director (TBD)
Instructional Coordinator (TBD)
Partner Corporations
in conjunction with
The Right Place, Inc.
VanAndel
Global Trade
Center
HUB Grand Rapids
Steve Frazee
Bill Holsinger Robinson
West Michigan
Colleges and
Universities
(WMCUG); 7 each
Michigan, Public
Colleges and
Universities
FBA &
FOBI
MISBTDC
The Right Place,
Inc.
Partner Small
Organizations
GVSU
Programs &
Services
StartGarden
Mike Morin, Rick
DeVos, Amanda
Chocko
Johnson Center for
Tech
Transfer
Philanthropy ( Grants)
Center for Leadership
and Innovation
DOER
Center
Team: The team managing the Michigan iStart Program will consist of a Program Director and Instructional Coordinator,
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to be hired. The program will report to the Executive Director of the Grand Rapids SmartZone . iStart will be supported
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by the SmartZone Development Manager, Marketing and Communications Manager and Entrepreneurs in Residence in
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various sectors. The SmartZone reports to the Executive Director of the LDFA. These programs are closely linked
with University Technology Transfer and many other programs in the university that intersect at entrepreneurship.
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J. Kevin McCurren, Executive Director (CEI/SmartZone ) mccurrke@gvsu.edu
Kevin is the Executive Director for the Center for Entrepreneurship and Innovation at Grand Valley State University,
Seidman College of Business. He has over 25 years of combined corporate and entrepreneurial experience. As an
entrepreneur and angel investor, he has been involved in the start-up of a medical management company, a dental
laboratory company and several biomedical companies. He has served on the Executive Committee of the Venture Club
of Louisville, and has served on Board Committees of the Louisville Medical Center Development Corporation, MetaCyte
Incubator, the Beargrass Endowment Fund, the Charter and Priority Health Care. Most recently, Kevin served as
President and Start-up Executive with Intervention Insights, a Spark funded company and a 2011 50 Michigan Companies
to Watch. A 2010 graduate of the Michigan Political Leadership Program, Kevin holds a Bachelor of Science and Master‘s
Degree in Public Health and Health Services Management from the University of Missouri. As Executive Director of the
Center for Entrepreneurship and Innovation, Mr., McCurren will incorporate his role as Managing Director into his current
position until permanent directors can be placed.
Kara Wood, Grand Rapids, Economic Development Director; kwood@grand-rapids.mi.us
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Kara Wood is the Economic Development Director for the City of Grand Rapids where she leads the City‘s economic
development efforts and administers the Economic Development Corporation, Brownfield Redevelopment Authority,
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SmartZone Local Development Financing Authority and Corridor Improvement Authorities. She interacts with and
guides community business leaders in the positive advancement of the city‘s economic growth through complex public
private partnerships, and assists developers in implementing a wide variety of programs, including brownfield
redevelopment, and other development finance incentives. She holds a Bachelors of Arts in Business Administration from
Michigan State University, an Economic Development Finance Professional Certification from the National Development
Council and is a Certified Economic Developer. She also holds a Masters of Public Administration from Western Michigan
University.
Partners
Start Garden is a $15 million venture capital fund that invests $5,000 in two business ideas each week. Backed by the
DeVos family of Grand Rapids, Start Garden is designed to remove the barriers for an idea to become a project and a
project to become a start-up business. Each week, Start Garden will invest in two ideas submitted to the website. Each
idea will receive $5,000; one will be chosen by Start Garden team members and the broader community will select the
other by voting for ideas they like via the website. Each person who receives the initial $5,000 investment has 60-90 days
to get some traction with his/her idea, and return to give an in-person update at a public event. The update informs Start
Garden management and mentors which candidate made a smart use of the funds. Ideas can receive an additional
$20,000 to continue to move forward through subsequent rounds of financing, up to a total of $500,000. The network of
professionals that make up Start Garden will be an invaluable resource, aiding the success of each team.
The HUB Grand Rapids, is economic gardening made real in West Michigan. It is a cutting edge economic development
and community engagement initiative designed to grow regional businesses while generating positive social outcomes.
The HUB Grand Rapids will provide Michigan iStart members with a physical, shared workspace, as well as business
mentorship. A key to the Michigan iStart Program is the multidisciplinary exchange of ideas. The HUB is a shared location
that will allow for a conduit of information between iStart teams and their mentors as well as the community at large.
Michigan iStart is open to all Michigan public universities and colleges; however, the West Michigan Colleges and
Universities Group, WMGUG, which includes Aquinas, Calvin, Cornerstone, Davenport, Hope, GRCC, and GVSU, will be
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the initial partners to the program. The SmartZone /CEI recognizes that although all Michigan colleges and universities
are welcome applicants for iStart, geographic constraints will create a degree of natural selection. The WMCUG group of
institutions currently share close working relationships, specifically in the area of business. WMCUG members, Calvin,
Davenport and GRCC, have currently submitted letters of support for iStart. Additionally non-WMCUG Universities such
as Michigan State University, Western Michigan, and Kendall, have also shown support for Michigan iStart. As part of the
partnership, each university must agree to certain requirements, as noted above in the Proposed Services section. After
early success, iStart will be geographically expanded to other Michigan universities and SmartZones℠.
Michigan iStart will actively seek out partner corporations, with the mutual expectation that the partnership will
encourage and lead to corporate employee participation in iStart. By seeking partnership with these organizations,
avenues for the exchange of ideas will be created. One of the main opportunities for corporate growth is through
intrapreneurship and spinning out new businesses. The small organization/Individual iStart program is designed to
target and assist people in the community who have a great idea for a start-up, but are not affiliated with a larger
institution. These people are in need of a way to add structure and organization to their new business start-up efforts.
Vision: It is the vision of Michigan iStart to become an efficient and aggressive pipeline for entrepreneurship. iStart will
be a barrier-free pipeline that takes viable business ideas, and guides them through a development process that will result
in the start-up of successful new companies in the state of Michigan. There are four key elements essential to the flow of
this pipeline: 1) Collaboration with a multidisciplinary flow of ideas, 2) Access to financial capital, 3) Business support in
the form of social and intellectual capital, 4) and a structured development plan.
Please see the Letters of Support section below for a list of partners that have currently shown written support for The
Michigan iStart Program. Appendix - B
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
E) Milestones/ Deliverables
Milestone/Deliverable
Due Date
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
Finalized outline of the development plan
Hire Program Manager
Create Investment Committees—sectors
Create Agreements/marketing components
Start application process (1)
Investment committees make final decisions- accept 8 applicants (1)
Sign contracts defining members‘ milestones and obligations (6/1) (1)
Memberships to The HUB Grand Rapids and StartGarden (1)
Enter into investment agreements (1)
Collecting and screening of applications (2)
Investment committees make final decisions- accept 8 applicants (2)
Graduate first cohort (1/1); Public presentations (1)
Start cohort 2 (2)
Enter into investment agreements (2)
Follow-up with previous cohort (1)
Complete Year One Assessment; consider geographical expansion
Collecting and Screening of applications (3)
Investment committees make final decisions- accept 8 applicants (3)
Graduate 2nd cohort (1/1); public presentations (2)
Sign contracts defining members‘ milestones and obligations (1/1) (3)
Memberships to The HUB and StartGarden (3)
Enter into investment agreements (3)
Follow-up with previous cohorts (1,2)
Collecting and screening of applications (4)
Investment committees make final decisions- accept 8 applicants(4)
Graduate 3rd cohort (1/1) (3)
Sign contracts defining members‘ milestones and obligations (1/1) (4)
Memberships to The HUB and StartGarden (4)
Enter into investment agreements (4)
Follow-up with previous cohorts (1,2,3)
Collecting and screening of applications (5)
1/1/2013 4/1/2013
1.
2.
3.
4.
5.
6.
Investment committees make final decisions- accept 8 applicants (5)
Graduate 4th cohort (1/1) (4)
Sign contracts defining members‘ milestones and obligations (1/1) (5)
Memberships to The HUB and StartGarden (5)
Enter into investment agreements (5)
Follow-up with previous cohorts (1,2,3,4)
4/2/1015 10/1/2015
1. Graduate 5th cohort (1/1) (5)
2. Follow-up with previous cohorts (1,2,3,4,5)
4/2/2013 10/1/2013
10/2/2013 4/1/2014
4/2/2014 10/1/2014
10/2/2014 4/1/2015
10/1/2015 –
12/31/2015
*Bolded #s indicate which cohort the milestone is referring to
11
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Have management structure in place
The Grand Rapids SmartZoneSM /CEI will have to carefully choose the Program Director and Instructional
Coordinator for the program based on their collective experience and expertise as compared to the needs of
the program.
Finalize outline of the development plan
There will be a standardized development curriculum that each iStart member must follow and commit to
deliverables against. This development plan will be the foundation of the iStart Program operations.
Collecting and screening of applications
It will be imperative to collect as many applications as possible in order to create a high level of competition,
and therefore ensure that only the best teams, with the greatest potential for success, will be involved in iStart.
Investment committees make final decisions
To further ensure that only the best teams are admitted to iStart, investment committees will be used to make
final decisions. These investment committees will be composed of 3-5 members from each of the iStart
programs. For example, an investment committee of college and university faculty will make final decisions
about college/university applicant teams.
Sign contracts defining members’ milestones and Obligations
Although there will be a standardized development plan, each iStart member will require different variations to
the plan. iStart will work with each team to customize a development program that suits the particular team.
Each team will be required to agree to the terms, with defined milestones, and be expected to deliver on them.
Membership to The HUB Grand Rapids and StartGarden
Upon becoming a member of iStart, each team will receive membership to both StartGarden and The HUB
Grand Rapids. These memberships will provide the teams with access to mentorship and technical advice and
will plug them in to the entrepreneurial community.
Enter Into Investment Agreements
A major part of the iStart program is the access to capital. Each team will have access to $20,000 in start-up
capital as a part of iStart. The teams must however, agree to certain conditions in order to receive the funds.
The funds will be distributed in the form of a convertible note or equity. Returns on investments will be
reinvested back into iStart.
Graduate Cohort
The greatest factor deciding the economic impact will be the number of successful businesses that iStart is
able to create. In order to maximize this number, it is importation to efficiently bring teams in, give them the
tools that they need, position them for success, and graduate them out in order to make room for another
group.
Follow up with cohort
After each cohort graduates, they will still have access to the same business services at a lesser extent. iStart
will provide continued business support through the transition process from the iStart program to entirely
independent operation. Additionally, as part of their contract, businesses must agree to give iStart access to
financials and employment information of 5 years after graduation, for tracking purposes.
12
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
F) Budget
Expenses
4/1/2013- 10/1/2013- 4/1/2014- 10/1/2014- 4/1/2015- 10/1/20159/30/2013 3/31/2014 9/30/2014 3/31/2015 9/30/2015 3/31/2016
Totals
Salaries
65,000
65,000
65,000
65,000
65000
65000
390,000 LDFA
Benefits
16,250
16,250
16,250
16,250
16,250
16,250
97,500 LDFA
Marketing
12,500
12,500
7,500
7,500
7,500
7,500
55,000 LDFA
Events
Travel
5,000
2,500
10,000
2,500
5,000
2,500
10,000
2,500
5,000
2,500
10,000
2,500
45,000 LDFA
15,000 LDFA
License
Launch Plan
480
480
480
480
480
StartGarden
Technical
Assistance
4,800
8,000
4,800
8,000
4,800
8,000
4,800
8,000
4,800
8,000
Seed
Capital
160,000
160,000
160,000
160,000
160,000
Overhead
15,188
41,930
40,430
41,180
40,430
41,180
Total
116,438
321,460
309,960
315,710
309,960
315,710
Funding
Source
2,400 LDFA
24,000 LDFA
40,000 MEDC
800,000 MEDC
220,335 GVSU/
LDFA
1,689,235
Notes to Financials:
1. Salaries and benefits represent staffing of one program manager and one instructional coordinator.
Benefits are estimated at 25%.
2. Initial year one marketing is set at $25,000; subsequent years at $15,000. Marketing includes website
development.
3. Events represent networking programs and public presentations associated with company launches.
4. Travel includes educational programs and travel for promotion.
5. StartGarden is a Grand Rapids based early stage venture fund and networking program. Each team is
allocated two annual memberships at $300/person.
6. Workspace and educational programs will be provided at The HUB Grand Rapids. The HUB Grand
Rapids is an open workspace that will be the epicenter of entrepreneur activities. Prior incubator
funding has been provided to the Hub and provides for memberships as part of the agreement.
7. Technical assistance represents $1,000 per team to provide technical capability for due diligence as
part of the selection process.
8. Seed capital is allocated at $20,000/team. Seed capital will take the form of convertible debt or equity.
Teams will be eligible to receive $10,000 to $25,000 depending on need. Seed capital will be an
investment. Returns will be reinvested.
9. Overhead is 15% of the MEDC award amount and the LDFA contribution to the operating capital as
allowed under the RFP. Overhead reflects operating support provided by GVSU including but not
limited to office space, common work areas, conference capabilities, telephone, office support, internet,
copying and the administrative structure required to support an operating program. The Overhead
does not reflect the actual costs of supporting this program which may or may not be higher or lower.
13
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
10. It the intention of the Grant Rapids SmartZoneSM to seek outside funding from corporate partners,
venture funds and investors as a match for the Grant. The SmartZonesm has not been able to solicit
outside funds before submission. When outside funds are acquired, these funds will be used to either
increase the equity component of the program or reduce the direct costs of the LDFA or GVSU as
decided by the LDFA board.
Organizations P&L and Balance Sheet
Attached are the financial statements for the Grand Rapids SmartZoneSM and Grand Valley State University.
The strong financial statement of these organizations demonstrates the financial capability of these
organizations to sustain the iStart program. It is also the intention of the applicant to use the start-up capital
provided from this grant to illustrate the value of the iStart Program to organizational participants. Once the
value of the program is demonstrated the, applicant will seek corporate support for continued funding
Organizations P&L Budget over the Term of the Proposal:
Attached is the five year plan for the SmartZonesm as reflected in the three year agreement between
GVSU/CEI and the LDFA to manage the SmartZonesm. A five year plan for the Smartzone is not available.
The GRSmartZoneSM received a $100,000 incubator grant in 2011 and a $500,000 incubator grant in 2012.
Below is the requested table:
Year
2012
FYE
6/30/12
2013
FYE
6/30/13
2014
FYE
6/30/14
2015
FYE
6/30/15
2016
FYE
6/30/16
Total
LDFA SmartZone
Support
568,923
640,533
681,011
1,890,467
2012 Business
Incubator MSF
2013 Business
Incubator MSF-iStart
Total Grant Funds
& SmartZone
Revenue
Expenses
50,000
100,000
50,000
200,000
336,000
336,000
168,000
840,000
1,076,533
1,067,011
168,000
2,930,467
Grant Revenue
0
618,923
Accelerator
0
618,923
740,533
731,011
0
Expenses for
SmartZone
Expenses associate
61,094
634,294
625,669
368,178
with 2013 Business
Incubator MSF iStart
program
Total with 2013
Business
Incubator Grant
0
680,017
1,347,827
1,356,680
368,178
Expenses (iStart)
1. 2011 Business incubator grant was issued to GVSU and is not reflected in the LDFA financials
2,090,467
1,689,235
3,779,702
14
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
SM
The following is the Grand Rapids SmartZone budget that was approved as part of the new management agreement
dated October 1, 2012 between the LDFA and CEI:
15
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Budget for the SmartZone℠ as part of the LDFA Budget
The following represents three years of estimated expenses for the SmartZone℠ as part of the agreement
entered into on October 1, 2012 between GVSU/CEI and the LDFA. The GVSU Component of the SmartZoneSM
budget does not include LDFA contract between LDFA and Right Place for marketing services. The expenses
below are reflected in the Science and Technology Expenses of the LDFA Budget for 2012-2015. The
SmartZone℠ contract runs from October 1 through September 30 and crosses LDFA budget years.
Total Yr 1
Total Yr 2
Total Yr 3
Variable Expenses
-
-
Programs Events*
12,000
24,000
24,000
Annual Event*
Website Development (US
SourceLink)
Future Incubator Feasibility Study
15,000
15,000
15,000
50,000
25,000
50,000
Fund Development Study
Total Variable Expense
30,000
77,000
119,000
64,000
Executive Director
125,000
125,000
135,000
Admin Support
50,000
50,000
51,000
Web/Social Media Mngr (Sourcelink)
25,000
25,000
25,750
Staffing--
Contract Manager
Virtual Incubator/Accelerator Manager
0
30,000
30,000
100,000
100,000
110,000
Entrepreneur in Residence #1
25,000
25,000
25,000
Entrepreneur in Residence #2
8,333
25,000
25,000
Entrepreneur in Residence #3
0
14,583
25,000
Total Prof & Admin
333,333
394,583
426,750
Fringe Benefit (41.2% of salary)
123,600
135,960
144,921
Indirect Cost--office, etc
60,000
66,000
70,350
Travel/Prof Development
24,990
24,990
24,990
Operating Expenses
208,590
226,950
240,261
618,923
740,533
731,011
Total Incubator Expenses
16
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Notes to Budget:







Additional revenue was not projected in this proforma. GVSU CEI expects that additional revenue
will derive from others sources, specifically additional grants, state funding, rent, federal funds and
philanthropy. Though not listed, incubator tenants will be expected to fund portions of their rent.
One time expenditures include future incubator feasibility studies. The center expects to engage
Lawrence Molnar of the University of Michigan. Dr. Molnar has completed extensive national
studies on the feasibility and effectiveness of incubators and development of a website U.S.
Sourcelink.
Executive director, contract manager, virtual incubator/accelerator manager and admin asst will be
contract employees through GVSU until a separate 501c3 is established. Budget includes estimated
admin and benefit costs based on GVSU allocations (41%). Benefit costs may decrease under a
separate entity.
Entrepreneurs in residence (EIR) added as clusters are developed; part time adjunct positions at
$50K each; state provides $25K subsidy via Tech Transfer agreement for 3 each through a GVSU
grant. EIR’s will be independent contractors with no benefit costs.
Indirect costs are administrative costs provided by GVSU and include office supplies, printing,
telephone, internet, office equipment, etc. Rate for indirect costs is 20% which is the GVSU rate for
State of Michigan contracts.
Travel and professional expenses are $833/month for Executive Director, Virtual
Incubator/Accelerator Manager and Entrepreneurs in Residence (.5 FTE). Travel expenses reflect
the cost of an active development program required to place tenants and assist companies.
Executives will be expected to attend industry meetings throughout the state of Michigan and
Chicagoland. Examples of programs include national BIO Conference, all Michbio events,
technology meetups in Ann Arbor, Ann Arbor networks, Accelerate Michigan, Southwest Michigan
Life Science events, Mi Tech events (Grand Rapids can be the commercialization center for MI Tech
spinouts), Impact Engine Chicago, all Michigan State events and networks, Midwest Venture Forum
all Michigan Venture Capital Association meetings, all StartGarden events, etc. In addition to
travel, the SmartZone℠ should hold memberships in many of these organizations as a component
of professional expenses.
Month-by-month estimates are available but not shown for purposes of brevity.
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
G) Economic Impact
The following table represents the economic impact of the iStart program:
2013
Companies Created
Jobs Created
Jobs Retained
Companies Served
MEDC Funds
48
Increase
Investment/Revenue
Federal Funds obtained by
companies
Angel Funds acquired by
companies
Total Capital
Patents/IP
FY Oct 2013
To Sept 2014
FY Oct 2014
To Sept 2015
FY Oct 2015
To Sept 2016
8
8
8
48
$160,000
16
28
8
96
$320,000
16
56
28
96
$320,000
$40,000
$130,000
$150,000
$150,000
$150,000
$20,000
$190,000
$190,000
$310,000
$700,000
$790,000
4
8
8
Other organizations with
formal collaborations
Tech transfer talent development network including: Michigan Technological University,
Ferris State University, Michigan State University, Western Michigan University, University
of Michigan, Flint, Dearborn, Central Michigan University,
Eastern Michigan University, Oakland University, Wayne State University, Saginaw State
University, Lake Superior State University
Companies Attending
Events
25
30
35
40
Assumptions/Justifications:
1. MEDC investment: Investment in each company is $20,000. Capital is commonly cited as one of the
most important factors, contributing toward the success of failure of a start-up. By investing $20,000 in
each company, iStart will allow each team the opportunity to accelerate the process of proving their
concept and taking steps toward launch. Additionally, the mentorship and oversight that the companies
will receive will ensure that each team uses their resources as efficiently as possible.
2. Companies served: For each company accepted in iStart it is estimated that six companies will apply
and be reviewed.
3. Increase Investment Revenue: Invested capital (original company investment) is expected to have a
25% annual return. Returns on the investments made in iStart companies will be re-invested back into
the Michigan iStart program. This practice will decrease the amount of funding that iStart will need in
order to continue after the three year period. It is the goal of Michigan iStart to be able to secure
corporate sponsorship and a greater financial contribution from partnering colleges and universities in
the future. The ability to reinvest capital will decrease the amount required for continuation on an
exponential curve, while also proving the concept to outside organizations. This will in turn increase the
likelihood of being able to secure outside sponsorship and support.
18
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
4. Federal Funds: After the start of the program, it is expected that one company/year will receive a Phase
1 SBIR (Small Business Innovation Research) grant. Each company that receives an SBIR award will
be an iStart success. Phase 1 SBIR awards a small business up to $150,000. Each SBIR award is a
strong indication of the success of iStart and of the potential for the commercialization of an innovative
new technology.
5. Angel Funds: It is expected that one company/year will receive $150,000 Angel investment; 50% of the
companies will receive $5,000 StartGarden funds. Angel investments are a strong indicator that a
business will grow in the state of Michigan. Angel Investors typically only invest in opportunities that
they see as having high potential and that they expect to get a high return on investment from.
6. Patents/IP: 50% of the companies will obtain IP. By patenting their products, 50% of iStart companies
will be able to build barriers to entry for other firms. These patents will further increase the potential for
iStart teams to build a sustainable business.
Companies Created
iStart expects to put eight new venture teams through the program during every six month cycle. The number
eight comes from the assumption that three teams will come from colleges and universities and three will come
from corporations and large organizations. The remaining two teams will be brought in from other small
organizations and individual teams. Only the best applicants, with the greatest potential, will be accepted into
the program. It is expected that each of the teams will be positioned to launch by the end of the six months,
and that many of them will be able to maintain success. Bizdom in its first year of operation has placed 32
businesses through their bootcamp. StartGarden since its inception in ____ has funded over startup ideas.
19
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21st Century Jobs Fund 2013 Business Incubator Application
Appendices
Appendix – B (Letters of Support)
Verification of Operations
November 26, 2012
Contracts and Grants
Michigan Economic Development Corporation
nd
300 North Washington Square, 2 Floor
Lansing, MI 48913
RE: 2013 Business Incubator RFP – Verification of Operations
Dear Contracts and Grants Administrator:
SM
This letter is submitted in support of the business incubator grant proposal submitted by the Grand Rapids SmartZone
Local Development Finance Authority (LDFA) and serves to verify that the incubator program is active and has been in
operation continuously without interruption since 2003.
SM
The Grand Rapids SmartZone is a high tech incubator/accelerator for life science, medical device and high-growth
start-ups or small businesses. The Michigan Street Incubator located at Grand Valley State University provides more than
26,000 square feet of incubator space to help these companies grow and succeed.
SM
The Grand Rapids SmartZone works for start-up companies and entrepreneurs by letting them focus on what they do
SM
well; while the SmartZone handles the administrative support challenges that come with running a complex work space.
SM
The Grand Rapids SmartZone was formed in 2003 as a collaboration between the Van Andel Research Institute, Grand
Valley State University, the City of Grand Rapids, Grand Rapids Community College and The Right Place, Inc. The goal
SM
was to support the development of high-technology business start-ups within the Grand Rapids SmartZone . The
collaboration has since expanded to include Spectrum Health, Saint Mary‘s Health Care, Mary Free Bed Rehabilitation
Hospital and the Grand Angels. The mission has grown to accommodate the region‘s growth in life science, technology
and other high-growth industries.
The LDFA provides financial support sufficient to ensure sustainable operation of incubator/accelerator. The LDFA‘s
SM
commitment to the Grand Rapids SmartZone is sufficient to provide the opportunity for development of additional
st
resources to the incubator and accelerator programming with the resources available through the 21 Century Jobs Fund
Business Incubator RFP.
We look forward to your favorable consideration of the proposal and can assure you of our commitment to working
collaboratively with our partner agencies and programs to develop a more effective incubator program.
Please contact me if you require additional information.
Sincerely,
Kara Wood,
Executive Director
SM
Grand Rapids SmartZone Local Development Finance Authority
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Appendix – B (GVSU business services)
The following is a list of CEI‘s Current Programs & Initiatives
a) Support for Commercialization of Ideas:
GVSU Technology Commercialization Office (TCO)
The office of Technology Transfer resides in the Center for Scholarly and Creative Excellence at GVSU. The
Executive Director of CEI serves on the Universities Tech Transfer review committee. In this dual role, the
Executive Director protects and facilitates the conversion of university developed intellectual property. The dual
role also allows the Executive Director to be active in the development of new business around a licensed
technology. The office fosters university-business relationships while participating in the economic
development of the region and the state. The Technology and Commercialization office works closely with the
Center for Scholarly and Creative Excellence at GVSU. The Center is involved in seeking and administering
grants and third party funding for University researchers.
Entrepreneur in Residence (EIR)
Designed to increase mentorship of entrepreneurs by entrepreneurs clients. The program provides accessible
presence of an established and proven entrepreneurial leader. That person provides process and education
insights, as well as connectivity to a vast network of business development. Most recently Entrepreneurs in
Residence included Roger Jansen, founder of Thinkwise and Ryan Vaughn, founder of VNN. Future EIR's
include Sam Hogg (resume attached). It is anticipated that Sam and future EIR‘s would be actively engaged in
SmartZone℠ work.
Savvy Entrepreneurs Series
Designed by entrepreneurs for entrepreneurs, the Savvy Entrepreneurs Series meets five months a year to
tackle the toughest of entrepreneurial topics. Through panel presentation and open discussions, attendees
push to ―A HA‖ moments of understanding how each other‘s experience can benefit the growth of their
business. The Savvy Series is designed to be an ongoing series of entry level classes and topics for
entrepreneurs. It is anticipated that this program would continue as part of the SmartZone℠ program.
Business Acceleration (BAF)
CEI is the place high-growth entrepreneurs can turn to for direction and connections to ensure great ideas are
converted to actionable plans for commercialization. Every interaction with CEI is focused on improving
entrepreneurial skills, as well as lowering the costs of start-up. The CEI also provides support to design
optimized funding strategies and introduction to the right capital sources. CEI is currently serving as an
Accelerator Partner for the following accelerator programs: the Business Accelerator Fund, the Green
Technology Entrepreneur Academy, Momentum, the CleanTech Accelerator and Impact Engine.
Business Connection
CEI is a central hub capable of linking the resources of Grand Valley with emerging and high-growth business
innovations. As one of the most comprehensive business support networks in Michigan, it is dedicated to
sharing knowledge, expertise, and opportunities within the West Michigan business community and beyond.
The Business Connection is served by the website business resource portal developed as entry point to help
businesses and companies‘ access university resources. The web resource portal can be found at
http://www.gvsu.edu/businessresource/service.htm.
Access to Capital:
Appreciating that new ventures are dependent on available capital, CEI works to develop, promote, and
connect to available funding for entrepreneurs. The CEI is engaged in the entire continuum of funding
21
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
including state and federal grants, seed funding, Angel and Venture Capital investment, and institutional loan
vehicles. CEI provides administrative support and research assistance for the following early stage funding
programs: SBIR/STTR, Kickstarter, Grand Angels, Huron River Ventures, Michigan Accelerator Fund I and
other angel groups in surrounding areas including Lakeshore Advantage, Muskegon Angels, the Michigan
Accelerator Fund and various venture funds. CEI is also a member of the Michigan Venture Capital
Association. Grand Valley via the Grand Valley Research Corporation has invested in several of startup
ventures and early stage funds. GVSU is also a sponsor of the Grand Angels annual meeting and has initiated
the development of the West Michigan Collegiate Fund, a college based West Michigan college venture fund.
High Tech Incubation Facilities
Incubation is another support process that can accelerate the successful development of start-up and fledgling
companies, by providing entrepreneurs with an array of targeted resources and services. Regionally there are
seven incubation centers available for entrepreneur residency. Grand Valley is home to two of these; the
Grand Rapids SmartZone℠ focused on the life sciences and medical device, and the Michigan Alternative and
Renewable Energy Center (MAREC), focused on alternative energy. CEI can help entrepreneurs find the
perfect fit to advance their new venture proposition. CEI also works closely with or sponsors several private
and public incubators and accelerators including Momentum and the Factory, a private technology space
sharing; TeenAcademy, a week long entrepreneur boot camp for middle and high school West Michigan
students.
MI-GreenTEA (Michigan Green Technology & Entrepreneurship Academy)
The Michigan Green Technology Entrepreneurship Academy (MI-GTEA) is an innovative, intensive five day
course designed for science and engineering faculty, postdocs and PhD students who want to learn to
commercialize their research, prepare for a career in industry, or take the first steps toward launching a new
venture. The Academy is a springboard for moving new clean tech ideas out of the lab. The Inaugural Michigan
Green TEA was hosted by the Seidman College of Business, Center for Entrepreneurship & Innovation at
Grand Valley State University from July 25-July 29, in Pew Grand Rapids. The program provided participants
with a practical understanding of how innovations move from the laboratory to the market, and introduced them
to a strong network of professionals who can help mentor and connect them as they move forward. MI-GETA
welcomed 19 participants from a diverse group of science and engineering researchers from 10 Michigan
Universities.
Invest Locally, Invest Profitably: The Key to Successful Investing in West Michigan
This educational conference offers West Michigan high net worth and institutional investors the opportunity to
learn about a wide range of private capital investments that can provide diversification, attractive returns and
contribute to the success of West Michigan's next generation of business success stories.
ENTREPRNR.NET
Being an entrepreneur is busy enough without the added struggle of sifting through regional support offerings.
The CEI developed ENTREPRNR.NET as a web-based tool to facilitate locating the most relevant information
when it‘s needed. The site provides information and connection to regional support services, incubation
facilities, knowledge resources, and capital sources, 24/7.
b) Talent Development
Empowering Entrepreneurship
CEI hosts the annual Empowering Entrepreneurship, a meeting focused on accountability reporting where
leading entrepreneurs, investors, community and business leaders discuss and assess West Michigan's
entrepreneurial progress, next steps, and an open discussion on challenges in our regional entrepreneurial
ecosystem. In 2009, the Seidman College of Business commissioned and published, Empowering
Entrepreneurship, a study of the Entrepreneurship in West Michigan. This seminal study validated the need for
22
Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
entrepreneur initiatives in West Michigan. The report is scheduled to be re-released with new comparative
longitudinal data in 2014.
ENT Interdisciplinary Education
CEI in collaboration with the Seidman College of Business, offers interdisciplinary entrepreneurship curriculum
in starting and managing an entrepreneurial venture. Coursework covers researching entrepreneurship in
society, analyzing entrepreneurial opportunities, financial management, obtaining funding, marketing a product
or service and preparing a business plan. Small business internships are integrated to allow for direct
application of classroom learning.
ENT Scholarships
For GVSU students on the entrepreneurship learning path, the CEI has scholarships available. Application
requires evidence of interest and experience in entrepreneurship as well as demonstration of intention to
participate in starting a new venture. Two scholarships are currently offered to entrepreneurial students at
GVSU, the American Photo Marketing Entrepreneurship Scholarship, and the Robert H. and Barbara Wood
Scholarship.
ENT Internships
The CEI is committed to connecting students interested in entrepreneurship with experiential opportunities in
start-up and small business. Integrated with the ENT interdisciplinary educational pathways to achieve a
certificate or minor, the internships are designed to optimize 21st Century work skills through hands-on
experiences.
ENT Student Enterprise
GVSU is committed to the launch and development of student enterprises. The ventures, owned and operated
by students primarily serving a campus population, offer unparalleled opportunity to start and manage a
business. Students are accountable for all aspects of the business P&L.
Business Plan and Idea Pitch Competitions
The GVSU Business Plan and Idea Pitch Competitions are a great opportunity for Grand Valley students
to organize their creative ideas, research for feasibility, and prepare solid business plans- and win cash prizes.
Along with promoting critical thinking about their ideas, this competition also acts as a great resource for
students to network with and gain feedback from West Michigan entrepreneurs.
Regional Business Plan Competitions
CEI plays a major role in organizing and coordinating the Regional Business Plan Competition which combines
the winners of seven local collegiate business plan competitions in a tournament of champions. Contestants
represent their respective schools including Aquinas, Calvin, Cornerstone, Davenport, GRCC, Hope, and
GVSU. The mission of this program is to encourage undergraduate entrepreneurs to develop and grow a startup company.
Collegiate Entrepreneurs Organization (CEO)
The Collegiate Entrepreneurs' Organization (CEO) at Grand Valley, advised by the CEI, is part of a nationwide
organization which develops start-up business fundamentals and builds student interest in entrepreneurship.
Through CEI leadership, the CEO has opportunities to run student enterprises, provide support to local
businesses, as well as take a leadership role in administering the GVSU Idea Pitch Competition.
GVSU Student Enterprise Association (SEA)
The purpose of the Student Enterprise Association is to foster the development of collegiate entrepreneurial
ventures from conception to finish, through the implementation of a core curriculum, faculty advising,
community mentorship and business competitions, and in doing so creating an atmosphere of innovation and
business development at GVSU, the surrounding community and the state of Michigan.
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GVSU Teen Entrepreneur Summer Academy
CEI organizes and runs the GVSU Teen Entrepreneur Summer Academy in Grand Rapids and Holland.
Designed for students grades 9-12, the Academy is an exceptional, week-long opportunity for area teens to
interact on a college campus, work with college faculty and GVSU students, while learning fundamental
business concepts and essential entrepreneurship skills through hands-on, highly interactive, and creative
workshops.
Meijer Lecture Series in Entrepreneurship:
The GVSU Fredrik Meijer Honors College is home to both the Meijer Lecture Series, established to provide
local and national presentations that focus on issues of leadership, innovation, and entrepreneurship from the
perspective of students, faculty, and participants in business throughout the region. Lecturers have included
Barbara Pierce Bush, Co-Founder and President Global Health Corps, Draper Richards Foundation Social
Entrepreneur, Echoing Green Foundation Fellow.; Bonnie Wesorick,, founder and Chairman Emeritus of the
Clinical Practice Model Resource Center (CPMRC), a business unit of Elsevier, and the Founder of the
CPMRC International Consortium; and B. Thomas Seidman, Producer/Director for such filmmakers as Robert
Redford (on Ordinary People), Clint Eastwood (Honkytonk Man) and Peter Weir (The Dead Poets Society).
Meijer Endowed Chair for Entrepreneur Studies
The GVSU Frederik Meijers Honor College is also home of the Endowed Chair for Entrepreneur Studies, an
endowed funded faculty position. The position involves residency in the Meijer Honors College half or threequarter time for the purpose of helping students develop skills for entrepreneurship, leadership, innovation &
creative problem-solving.
Michigan Shifting Gears
Michigan Shifting Gears, a program developed by the Michigan Economic Development Corporation, is a
three-month career transition program for talented corporate professionals who want to pursue opportunities in
entrepreneurial and business growth sectors where they can leverage their business knowledge and
experience in new ways. GVSU, is the MEDC‘s West Michigan partner and host for this program.
Applied Global Innovation Initiative
The Honors College and the Brooks School for Interdisciplinary Study is also home of the Applied Global
Innovation Initiative or the Estelí Innovation Project, an entrepreneur exchange program in Nicaragua. This
program, co-directed by Drs. Paul Lane and John Farris, stimulates entrepreneur economic activity in
Nicaragua by designing, manufacturing and selling products that are desired by Nicaraguans, that can be sold
for a price that Nicaraguans are willing to pay and can be manufactured in Nicaragua. The program is in four
regional campuses of La UNAN and the largest university in Managua. The Program involves @ 18 faculty
members and students throughout Nicaraqau.
NEU
NEU (pronounced ―new‖), is the Center for Entrepreneurship & Innovation‘s (CEI) biannual magazine. NEU
serves as an educational forum for entrepreneurs and a venue to highlight the many stories and great work of
local entrepreneurs and partner organizations. It also serves to update CEI‘s clients on our progress and latest
initiatives.
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Appendix – C (SmartZoneSM Incubator)
Dashboard Indicators - as a direct result of
business incubator or accelerator involvement
1)
Direct Jobs Created in Incubator or Accelerator
2)
New Companies Launched - Type of company
(examples: University of Michigan Tech Transfer
company, Michigan State University Student group,
or Pfizer spin-out) and Breakdown of industries
served (examples: software, automotive, medical
devices)
3)
Businesses Expanded - Type of company
(examples: University of Michigan Tech Transfer
company, Michigan State University Student group,
or Pfizer spin-out) and Breakdown of industries
served (examples: software, automotive, medical
devices)
4)
The number of new jobs [created] and projected
new job growth by entities that have received
funding
Direct Investment in Client Companies, including
the amount and type of funding
Private Equity Financing Obtained by Client
Companies, identify source
Grant Funding Obtained by Client Companies,
identify source
5)
6)
7)
Life of Incubator/Accelerator (2003November 2011 )
46
41=Incubator Tenants
5=Incubator Staff
11
Center for Molecular Medicine- diagnostics
Syzygy Biotech Solutions - diagnostics
Medical Device Testing – medical device
Tetra Discovery Partners – pharmaceuticals
Clinxus – clinical trials/healthcare
MSU-Women‘s Health Research – diagnostics
Barrier Technology – technology
TransCorp – medical device
Elkins Innovations – medical device
Soy Ultima – health food
INFORMD, Inc. – software
9
Sequenom Center for Molecular Medicinediagnostics
Syzygy Biotech Solutions - diagnostics
Tetra Discovery Partners – pharmaceuticals
Clinxus – clinical trials/healthcare
MSU-Womens Health Research – diagnostics
Barrier Technology – technology
TransCorp – medical device
Soy Ultima – health food
INFORMD, Inc. – software
Created = 40 current incubator occupants
Projected = 1141 direct and indirect per MEGA
$-0- directly from incubator
Avalon Laboratories - Estimated $66 million
-
8)
9)
Other Funding (besides Private Equity and Grants)
Obtained by Client Companies, for example Angel,
etc., identify source
The number of new patents, copyrights, or
trademarks applied for and issued to entities that
have received funding
10) Products commercialized by entities that have
received funding
Tetra Discovery Partners – National Institute
for Mental Health
Clinxus – MEDC
MSU-Womens Health Research – National
Institute for Mental Health
Barrier Technology – DoD SBIR
Elkins Innovations – DoD SBIR
-
Center for Molecular Medicine- private (Van
Andel Institute and Spectrum Health)
Syzygy Biotech Solutions – GLEQ/SmartZone
Award
TransCorp – venture capital – EDF Ventures
Applied Security –German parent funding
Unknown/Not Available
13
-
Syzygy Biotech Solutions = 3
Sequenom = 4
Avalon Laboratories = 2
Clinxus = 1
Soy Ultima = 1
INFORMD, Inc. = 1
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
-
Robertson Institute= 1
-
Syzygy Biotech Solutions
Sequenom
Avalon Laboratories
Clinxus
Soy Ultima
-
Avalon Laboratories = 1
Sequenom = 1
11) Increase in revenue by entities that have received
funding
5
12) The total number of new licensing agreements
entered into by each client company and the
number of new licensing agreements entered into
by each client company with Michigan firms
2
13) List of other state organizations with which you
have formal collaboration agreements
MEDC – current Business Incubator grant in amount of
$100,000 that was award March 2011
14) Example of selection/scoring criteria used to
incubate/accelerate







An innovative, technology-based business with a
proof of concept in the life sciences
The beginnings of a sound management and/or
product development team
Six months of working capital or adequate selffunding capability
A product which is less than 36 months from
market
Realistic business plan demonstrating significant
revenues within five to seven years
sm
Fit with GR SmartZone community and desire to
sm
leverage the services offered by GR SmartZone
Need for the wet lab facilities and the shared
equipment/instrumentation as appropriate
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Effectiveness of Incubator Operations
a. Average capital investment cost
Year 1 (2003)
>$5.5 million
b. Average yearly operating costs
$389,600 plan
Current Year FY2012
(7/1/2011-6/30/12)
Same +$123,000
$694,000 not including the
$100,000 MEDC incubator
grant
c. % revenue from public subsidies
d. Incubator space (sq. feet)
e. Average annual lease income
f. Number of incubator clients
91%
9,407 NSF + shared space
of 4,992 NSF + common
space
$8,110
3
58%
7,574/8,028 NSF + shared
space of 4992 NSF +
common space
$283,000
6
Social and Economic Impact
a. Incubator occupancy rates
b. Average length of tenancy
c. Number of management staff
d. Ratio of incubator staff/clients
e. % of manager's time advising clients
Year 1 (2003)
7.3%
2.3 yrs. by license
Two
2:400
NA
Current Year FY2012
7,574/8,028=94%
3.3
Five
5:600
25%
Year 1 (2003)
Current Year FY2012
Sustainability
a. Survival rate of tenant firms five years after
graduating
b. Average % growth in client turnover
c. Average jobs per tenant company
d. New graduate jobs per incubator
e. Cost per job – LDFA funds of ~$1.6 million
f. Total graduates/annual average graduates
g. Total revenue of tenants/average revenue of
tenants
NA
NA
4:1 =4 Est.
0
NA
0/0 Companies
82% +IP
NA
41:6 = 6.8 jobs/tenant
NA
$1.6 million/1182 expected
=
$1,091/job
11/1.4 Companies
NA
NA
The five major accomplishments by the Grand Rapids SmartZone℠ since 2003 that have had great economic impact:
1. Building awareness of life sciences in the region and opportunities to connect and learn
The Life Science Business Showcase each spring grew over five years to attract 450+ attendees. This showcase
provided education on what comprises life sciences and an opportunity to network and form connections for
individuals and companies in the life sciences community. Similarly, the Annual Dinner each fall provided an
opportunity for the community to celebrate together the life science successes in the region and to get to know some of
the key players in the region. It culminated in a grand finale with over 500 attendees! The Life Science Business
Showcase and the Annual Dinner culminated with 450-500 attendees. Both the business showcase and annual dinner
have now gone statewide with supporting MichBio as it holds two ―Expo‖ events each year, one in Grand Rapids and
one near Ann Arbor.
2. Creating a unique high-end life sciences business incubator/accelerator for Michigan
The Incubator consists of:
- A high-end life sciences incubator wrapped in a bundle of services for entrepreneurs resulting in one of the few
SM
accelerators in Michigan SmartZones
- Over 100 pieces of shared equipment and instrumentation for incubator member use
- An offering of services for incubator members and other clients
- Coaching of over 450 entrepreneurs and referral to the SBTDC
- Technology-based development services for entrepreneurs
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-
Access to services
- Marketing and Design, Accounting, General Legal,
- Intellectual Property, Investor and Public Relations, Human Resources
Thanks to all our tenants, the incubator has supported the economic development efforts of the City of Grand Rapids
and The Right Place, Inc. in creating or retaining 580 ―direct‖ jobs in the region. In addition 618 ―spin-off‖ jobs are
expected to be created due to Sequenom.
Taking into account the $1.6 million invested by the LDFA in the incubator over seven years, this accelerator
assistance to economic development in the city and region has cost the LDFA only $1,333 per job, a remarkable
SM
outcome the Grand Rapids SmartZone hopes to repeat. Tax incentives of over $20 million were also offered to
secure the commitment of Sequenom to the region.
3. Creating and filling three important Pipelines
Three Pipelines were created and are being filled:
- Entrepreneurial Pipeline, Intellectual Property Pipeline, Innovation and
Commercialization Pipeline
Space does not permit detailed description of all of the pipelines which have been transferred toCEI:
Entrepreneurial Pipeline
The creation and successful filling of the Entrepreneurial Pipeline was transferred toCEI. Successful recurring events
initiated are:
- Extended Learning Opportunities (ELO) network3 (K-12 STEM
afterschool)
- Extreme Entrepreneur Tour Forum 4 (collegiate event with 400
attendees)
- Collegiate Entrepreneurs Network (CEN) linking regional colleges and
universities
- Savvy Entrepreneur (practicing entrepreneurs and investors)
Intellectual Property Pipeline
In 2005, the Grand Rapids SmartZone℠ launched the Biotech Commercialization Project (BCP). The overall vision of
the BCP was and remains to create regional infrastructure to mine, assess, and protect novel life science ideas in the
region, fund the most promising through early stage commercialization, and then strategically exit through license,
partnership, or spin-out. The Grand Rapids SmartZone℠ provided facilitation of a BCP Steering Committee comprised
of leadership from each BCP member organization. The members are Spectrum Health Care, Saint Mary‘s Health
Care, Grand Valley State University, The Van Andel Institute, Michigan Medical PC (now Spectrum Health) and Mary
Free Bed Rehabilitation.
To date, BCP Partner Organizations have collectively reviewed more than 450 ideas, and successfully managed 25
ideas through various stages of product development. Fourteen patent filings have been made (two issued), with two
licenses completed (and one returning revenue). Three spin-out companies have been created, with two actively
seeking A Round investment funding. The BCP effort was recognized as a novel approach to drive community
innovation and commercialization in the life sciences by NASA, who awarded the project $150,000.
Innovation and Commercialization Pipeline
Through this BCP effort, an Innovation and Commercialization Pipeline has been established that can be successfully
managed and marketed as ideas develop. As a corollary effect, doing so has provided education and training for
BCP members in patent law, market research, new product development and commercialization, and transfer of the
technology as well as maximized community collaboration, support, and services in the life sciences. To catalyze
the BCP innovation pipeline the Grand Rapids SmartZone℠ convened the West Michigan Medical Device Consortium
(WMMDC). WMMDC’s vision is to have West Michigan be an internationally recognized cluster for medical device
design, development, and manufacturing.
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21st Century Jobs Fund 2013 Business Incubator Application
A standing agenda item for the WMMDC is presentation of assessed concepts from BCP organizations for their
consideration of engagement in commercial implementation. The WMMDC currently has 30 member organizations.
Since 2009, eight projects from ―BCP‖ commercially matured under direction by WMMDC members. Two others
involving area physicians and WMMDC members have successfully launched and are returning revenue.
4. Creating numerous regional life science workshops, seminars and educational events
Small workshops by the Virtual Company Alliance offering many services to entrepreneurs
• Obtaining FDA Approval for New Medical Devices
• Constructing Your Business, on how to start and staff your business
• Raising Capital, the dos and don’ts for entrepreneurs just staring
• SBIR/STTR training session for National Institutes of Health grant submission
5. Creating the Funding Continuum
SM
The Grand Rapids SmartZone supports various statewide capital competitions and is the due diligence agent and
the recommender for any applications for the Michigan Pre-Seed Capital Fund matching money. It has also been the
reviewer for many of the SPARK micro-loans. One of the incubator members, Syzygy Biotech Solutions, won the top
SM
prize of $100,000 this past year in the GLEQ SmartZone competition.
The Grand Rapids SmartZone℠ has been integrally involved in grant submissions and subsequent awards from the
State of Michigan for ClinXus (in collaboration with Van Andel Institute; $1.1 million), and Grand River Aseptic
Packaging (in collaboration with Van Andel Institute; $4.5 million). During the ATOM project, three companies
submitted grants, and three were funded for a total of $4 million in grant awards. Finally, several Michigan Pre-Seed
Capital Fund (MPSF) applications have been successful, raising over $2 million in funds from investors and the
MPSCF. We have another in preparation, and another interested in starting. In total, the Grand Rapids SmartZone℠
WMSTI has been instrumental in bringing over $11 million in grants to the region.
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21st Century Jobs Fund 2013 Business Incubator Application
Appendix – D (Sample Michigan iStart Curriculum)
(Based on Steve Blank‘s Model)
Week 1: Introduction to the Business Model Business Model
Read: Business Model Generation, pp. 118-119, 135-145
What is the business model? What are the 9 parts of a business model? What are hypotheses? What experiments are
needed to run to test business model? What‘s ―getting out of the building?‖
Deliverables for this week:







What is the core customer pain, or ―job‖ that you are doing for the customer?
What is the business model? What are the hypotheses about each of the 9 parts of the business model
What is the minimum feature set to test these assumptions?
What experiments needed to run to test business model hypotheses?
What is the market size? How will you determine whether this is a business model worth pursuing?
Find a name to your team
Start a blog/journal
Week 2: Team meeting/updates
Team presentations (10 minutes each)
What are your 9 Business Model Canvas hypotheses?
How will you test them?
Week 3: Test the Value Proposition
Read: Business Model Generation, pp. 118-119, 135-145
What is your product or service? How does it differ from an idea? Why will people want it? Who‘s the competition and
how does your customer view these competitive offering? Where‘s the market? What‘s the minimum feature set? What‘s
the market type? What was your inspiration?
Deliverables for this week:




What is the job customers are trying to get done? How significant is the pain?
What is your solution to the pain?
Why will people want it
Who‘s the competition, or alternative to your solution?

What did your customers think about your value proposition hypotheses?
Get out of the building
Talk to 10 customer, or use survey monkey or other tools to get more data
Update your blog

Week 4: Team meeting/updates
Team presentations (10 minutes each)
What did you learn about your value proposition from talking to your first customers?
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here‘s what we thought
So, here‘s what we did
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Grand Rapids SmartZone℠
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so here‘s what we found
so, here‘s what we are going to do
Week 5: Test the Customers/Users/Payers
Read: Business Model Generation, pp. 127-133
http://giffconstable.com/2011/07/12-tips-for-customer-development-interviews-revised/
Who‘s the customer? User? Payer? How are they different? Why do they buy? How can you reach them? How is a
business customer different from a consumer? What‘ a multi-sided market? What‘s segmentation? What‘s an archetype?
Deliverables for this week:






Get out of the building and talk to 10-15 customers face-to-face
What were your hypotheses about who your users and customers were? Did you learn anything different?
Did anything change about Value Proposition?
What do customers say their problems are? How do they solve these problems today? Does your value
proposition solve them?
What was it about your product that made customers interested?
Update your blog
Week 6: Team meeting/updates
Team presentations (10 minutes each)
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here ‗s what we thought
Here‘s what we Did
Here‘s what we Found
so, here‘s what we are going to do
Week 7: Test the Distribution Channels
Read: Four Steps to the Epiphany, pp. 50-51, 91-94, 226-227, 256-267
What‘s a channel? Physical versus virtual channels. Direct Channels, indirect channels, OEM. Multi-sided markets. B-to-B
versus B-to-C channels and sales
Deliverables for this week:




Get out of the building and talk to 10-15 potential channel partners face-to-face
What were your hypotheses about who/what your channel would be? Did you learn anything different?
Did anything change about Value Proposition?
Update your blog
Week 8: Team meeting/updates
Team presentations (10 minutes each)
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here ‗s what we thought
Here‘s what we Did
Here‘s what we Found
so, here‘s what we are going to do
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
Week 9: Test the Customer Relationships/Demand Creation
Read: Four Steps to the Epiphany, pp. 52-53, 120-125, and 228-229
How do you create end user demand? How does it differ on the web versus other channels? Evangelism vs. existing need
or category? General marketing, sales funnel, etc. How does demand creation differ in a multi-sided market?
Deliverables for this week:
For web teams:
Get a working website and analytics up and running. Track where your visitors are coming from, and how their behavior
differs.
Engage in (SEM) ―Search Engine Marketing.‖ Spend $20 as a team to test customer acquisition cost
Ask your user to take actions such as signing up for a newsletter
Use Google Analytics to measure the success of your campaign
Change messaging on site during the block to get costs lower
Non-web team:
Get prototype demo working
Build demand creation budget and forecast
What is your customer acquisition costs?
Did anything change about Value Proposition or customers
What is your customer lifetime value? Channel incentives—does your precut extend or replace existing revenue for the
channel?
What is the cost of your channel, and it‘s efficiency vs. your selling price
Everyone:
What kind of initial feedback did you receive from your users?
What are the entry barriers?
Update your blog
Week 10: Team meeting/updates
Team presentations (10 minutes each)
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here ‗s what we thought
Here‘s what we Did
Here‘s what we Found
so, here‘s what we are going to do
Week 11: Test the Revenue Model
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Grand Rapids SmartZone℠
21st Century Jobs Fund 2013 Business Incubator Application
What‘s a revenue model? What types of revenue streams are there? How does it differ on the web versus other
channels? How does this differ in a multi-sided market?
Deliverables for this week:







What‘s your revenue model?
What are your competitors doing?
How will you price your product?
What are the key financials metrics for your business model?
Test pricing in front of 100 customers on the web, 10-15 customers non-web
Assemble a rough income statement for your business model
Update your blog
Week 12: Team meeting/updates
Team presentations (10 minutes each)
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here ‗s what we thought
Here‘s what we Did
Here‘s what we Found
so, here‘s what we are going to do
Week 13: Test Partners
Who are your partners? Strategic alliances, competition, joint ventures, buyer supplier, licensees.
Deliverables for this week:






Find out who are your potential partners and the relationships
What partners will you need?
Why will you need them?
What‘s the cost of the partnership?
Talk to partners
Update your blog
Week 14: Team meeting/updates
Team presentations (10 minutes each)
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here ‗s what we thought
Here‘s what we Did
Here‘s what we Found
so, here‘s what we are going to do
Week 15: Test Key Resources and Expenses
What resources do you need to build this business? How many people? What kind? Any hardware or software you need
to buy? Any IP you need to License? How much money do you need to raise? When? Why? Importance of cash flows?
When do you get paid vs. when do you pay others?
Deliverables for this week:


Assemble a resources assumptions spreadsheet. Include people, hardware, software, prototypes, etc.
Access to resources. What is the best place for your business?
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21st Century Jobs Fund 2013 Business Incubator Application





Where is your cash flow break-even point?
What are the key financials metrics for costs in your business model?
Costs. Vs. ramp vs. product iteration?
When will you need these resources?
What‘s your expense model? What are the key financial metrics for costs in your business model?
Week 16: Team meeting/updates
Team presentations (10 minutes each)
Update BMC (Show original, and then show what you changed in new slide with changes in red)
Here ‗s what we thought
Here‘s what we Did
Here‘s what we Found
so, here‘s what we are going to do
Week 17: Presentation and Video Workshop
Deliverables for this week:




Identify the validated learning from customers. What you learned throughout the process, and how your business
model has changed. What is new, validated business model?
Talk through some example slides and presentation
Discuss basic format and requirements
Lab Tim to put presentation and video together
Week 18: Presentation and Pitch Skills
Deliverables for this week:



Teams will get a chance to listen to a communication specialist
Teams will get a chance to practice their pitches
Week 16: Presentation and Pitch Skills
Week 19: How to raise Money from a VC?
-
Panel Discussion by Local VCs
34
CHAIR
Doug DeVos
Amway Corp.
VICE-CHAIR
Michelle Van Dyke
Fifth Third Bank – Michigan
TREASURER
Richard C. Breon
Spectrum Health
Rick Baker
Grand Rapids Area Chamber of Commerce
Sam Cummings
CWD Real Estate Investment
Daryl J. Delabbio
Kent County
Brian Donovan
City of East Grand Rapids
James E. Dunlap
Huntington National Bank
Steven C. Ender, Ed.D.
Grand Rapids Community College
Terry Frewen, GRI, E-Pro
Coldwell Banker Frewen Realty
Representing the Ionia County Economic Alliance
Dan Gaydou
Mlive Media Group
Thomas J. Haas
Grand Valley State University
James P. Hackett
Steelcase Inc.
Brian Harris
H & H Metal Source
Richard Haslinger
Chase
William Johnson
Representing The Fremont Area Community
Foundation and the Newaygo County Economic
Development Office
John C. Kennedy
Autocam Corporation
Birgit M. Klohs
The Right Place, Inc.
Blake W. Krueger
Wolverine World Wide, Inc.
Hank Meijer
Meijer, Inc.
Lawrence J. Murphy
Varnum, Riddering, Schmidt & Howlett LLP
Craig A. Mutch
Miller Johnson
Richard J. Pappas, Ed.D.
Davenport University
John C. Porterfield
Comerica Bank
Milton W. Rohwer
Frey Foundation
Robert W. Roth
RoMan Manufacturing, Inc.
John G. Russell
Consumers Energy Company
Robert C. Shaver
Rhoades Mckee PC
Fred Shell
DTE Energy
Greg Sundstrom
City of Grand Rapids
David Van Andel
Van Andel Institute
November 16, 2012
J. Kevin McCurren, Executive Director
Center for Entrepreneurship & Innovation
Grand Valley State University
401 Fulton St. West, 270 C. DeVos
Grand Rapids, MI 49504
Dear Kevin:
The Right Place expresses our strong support for The Grand Rapids SmartZone/ Grand
Valley State University’s Center for Entrepreneurship and Innovation request for a 3year, $800,000 grant from the 21st Century Jobs Fund Business Incubator Program.
The Grand Rapids SmartZone will use the grant to fund new companies in Michigan
iStart, a six month launch pad for start-ups. The program is a competitive business
launch competition that is expected to create 40 new businesses over a three year period.
The Program is designed to support launchable high growth companies in three different
segments: Universities and Colleges (students), Large Organizations/Corporations and
Small Enterprises (Not For Profits, Small Businesses and Individual Teams).
The Right Place, Inc. is a regional non-profit economic development organization
founded in 1985 and supported through investments from the private and public sector.
Its mission is to promote economic growth in the areas of quality employment,
productivity and technology in Greater Grand Rapids by developing jobs through leading
business expansion, retention and attraction efforts.
Establishing the Michigan iStart program will provide significant value to the State, and
to clients of The Right Place. The synergy and collaborative nature of the proposed
program will leverage key resources to support the validation and commercialization of
new technologies, create companies, jobs, and bring new investment capital to Michigan.
Each business will receive mentorship and access to technical experts. In addition to
business support services, each business will have $10,000-$25,000 in startup capital for
use in developing their business.
We are excited for the opportunity the MEDC is providing with this grant and again
strongly recommend the awarding of this grant to The Grand Rapids SmartZone/Grand
Valley State University.
Sincerely,
Mike VanGessel
Rockford Construction Company, Inc.
Douglas E. Wagner
Warner Norcross & Judd LLP
Brian Walker
Herman Miller, Inc.
Sean Welsh
The PNC Financial Services Group
Birgit M. Klohs
President & CEO
November 16, 2012
J. Kevin McCurren, Executive Director
Center for Entrepreneurship & Innovation
Grand Valley State University
401 Fulton St. West, 270 C. DeVos
Grand Rapids, MI 49504
Dear Kevin:
StartGarden would like to express our strong support for The Grand Rapids SmartZone/ Grand Valley
State University’s Center for Entrepreneurship and Innovation request for a 3 year, $800,000 grant
from the 21st Century Jobs Fund Business Incubator Program. The Grand Rapids SmartZone will use
the grant to fund new companies in Michigan iStart, a six month launch pad for start-ups. The
program is a competitive business launch competition that is expected to create 40 new businesses
over a three year period. The Program is designed to support launchable high growth companies in
three different segments: Universities and Colleges (students), Large Organizations/Corporations and
Small Enterprises (Not For Profits, Small Businesses and Individual Teams)
StartGarden is a private, early stage seed fund investing $5,000 in two projects a week. Its stair step
approach to investing allows the management team to quickly deploy capital into projects as they
reach critical points in their development toward startup company, up to $500,000 in a single project.
Our unorthodox model of venture capital will fund hundreds of projects in small increments over the
next few years to discover a few that will scale into fast growth companies.
Establishing the Michigan iStart program would provide significant value to the State, and to clients
of StartGarden. The synergy and collaborative nature of the proposed program can leverage key
resources to support the validation and commercialization of new technologies, and in the process
create companies, jobs, and bring new investment capital to Michigan. Each business will receive
mentorship and access to technical experts. In addition to business support services, each business
will have to $10,000-$25,000 in startup capital for use in developing their business.
We are excited for the opportunity that the MEDC is providing with this grant and again strongly
recommend the awarding of this grant to The Grand Rapids SmartZone/Grand Valley state
University.
Rick DeVos
CEO, Start Garden
State Headquarters
Seidman College of Business
510 West Fulton Street
Grand Rapids, MI 49504
Phone: 616.331.7480
Fax: 616.331.7485
www.misbtdc.org
Regional Centers
Capitol
Genesee & Lapeer
Great Lakes Bay
Greater Washtenaw
November 21, 2012
J. Kevin McCurren, Executive Director
Center for Entrepreneurship & Innovation
Grand Valley State University
401 Fulton St. West, 270 C. DeVos
Grand Rapids, MI 49504
Macomb & St. Clair
Dear Kevin:
Mid Michigan
The Michigan Small Business and Technology Development Center (MI-SBTDC)
would like to express our strong support for The Grand Rapids SmartZone/ Grand
Valley State University’s Center for Entrepreneurship and Innovation (GVSU CEI)
request for a 3 year, $800,000 grant from the 21st Century Jobs Fund Business
Incubator Program.
Northeast Michigan
Northwest Michigan
Southeast Michigan
Southwest Michigan
Upper Peninsula
West Michigan
The MI-SBTDC has a strong history of collaboration with the GVSU CEI. The MISBTDC has most recently elevated that relationship through participation in the
Business Accelerator Fund and intends to further its collaboration by supporting the
Michigan iStart project.
The MI-SBTDC Tech Team - a team nine experienced consultants with a successful
track record of assisting technology companies with commercialization, capital access,
and growth – has extensive experience with two of the Michigan iStart targeted
companies; corporate spinouts and entrepreneurial tech-startups. The Tech Team will
help ensure the Michigan iStart program supports the companies with the highest
potential to create impact by assisting with the applicant review process and by
referring qualified companies. The Tech Team will also provide follow on consulting
support to Michigan iStart award recipients to help ensure these companies stay on a
successful growth path. As the companies continue to grow, the MI-SBTDC may offer
continued support through our Growth Group, our Finance and Strategy Specialists,
and other specialized services and tools as needed.
We enthusiastically express our support and look forward to furthering our
collaboration.
Sincerely,
In partnership with
the MI-SBTDC
Carol Lopucki
State Director – MI-SBTDC
Phil Tepley
Director of Technology Commercialization Services
November 16, 2012
J. Kevin McCurren, Executive Director
Center for Entrepreneurship & Innovation
Grand Valley State University
401 Fulton St. West, 270 C. DeVos
Grand Rapids, MI 49504
Dear Kevin:
GR Collective L3C, which operates HUB Grand Rapids, would like to express our strong support for the Grand
Rapids SmartZone/Grand Valley State University’s Center for Entrepreneurship and Innovation’s request for a
three year, $800,000 grant from the 21st Century Jobs Fund Business Incubator Program. We are delighted to
be partnered with the Grand Rapids SmartZone and GVSU-CEI to help develop a robust ecosystem of
entrepreneurship and innovation in West Michigan. This grant will have meaningful impact in the region by
accelerating the pace of high growth company formations.
HUB Grand Rapids serves a diverse membership of innovators including students, seasoned professionals, high
tech entrepreneurs, and people launching social enterprises. We endorse the Michigan iStart program due to its
incubation of high growth companies in three different segments: Universities and Colleges (students), Large
Organizations/Corporations and Small Enterprises (Not For Profits, Small Businesses and Individual Teams).
The creation of organizations in all of these market segments is good for the region and will produce a broad
offering of jobs to be filled.
GR Collective L3C, operating as HUB Grand Rapids, is pleased to be one node in the network of public/private
partnerships that are facilitating economic gardening and wealth development in West Michigan. We are excited
for the opportunity that the MEDC is providing and believe by awarding this grant to the Grand Rapids
SmartZone/GVSU-CEI new companies and jobs will be created.
Sincerely,
Steve Frazee
Co-Founder
cell: 214 697 2140
http://HUBGrandRapids.com
Grand Angels'
36 W. 8'h Street, Suite 200, Holland, Michigan 49423
lT
616-566-1770 | www.grandangels.org
November 21,2072
J. Kevin McCurren, Executive Director
Center for Entrepreneurship & Innovation
Grand Valley State University
401 Fulton St. West,270 C. DeVos
Grand Rapids, MI49504
Dear Kevin:
Grand Angels would like to express our strong support for The Grand Rapids SmartZonelGrand Valley
State University's Center for Entrepreneurship and Innovation request for a 3- year, $800,000 grant from the
21st Century Jobs Fund Business Incubator Program. The Grand Rapids SmarZone will use the grant to
fund new companies in Michigan istart, a six month launch pad for start-ups. The program is a competitive
business launch competition that is expected to create 40 new businesses over a three-year period. The
Program is designed to support launchable high growth companies in three different segments: Universities
and Colleges (students), Large Organizations/Corporations, and Small Enterprises (Not-For-Profits, Small
Businesses and Individual Teams).
As its Mission Statement says, Grand Angels is committed to using its financial, intellectual, and
networking capital to foster the success of emerging companies and to enhance the economic development
of West Michigan. Grand Angels makes investments that have a positive effect on our region through
business growth, job creation, and the attraction and retention of local talent. Investments with impact will
be the result of engaged, experienced business leaders providing both capital and wisdom to entrepreneurs.
Since its founding, Grand Angels has invested over $10.5 million in 24 businesses. With cash and
commitment, Grand Angels offers both capital and wisdom to entrepreneurs with the result promised in
Grand Angels' Mission Statement: "Investments with a Communit5z Impact."
Establishing the Michigan iStart program would provide significant value to the State and to companies in
which Grand Angels invests. The synergy and collaborative nature of the proposed program can leverage
key resources to support the validation and commercialization of new technologies, create companies and
jobs, and bring new investment capital to Michigan. Each business will receive mentorship and access to
technical experts. In addition to business support services, each business will have $10,000-$25,000 in
startup capital for use in developing their business.
We are excited for the opporlunity that the MEDC is providing with this grant and again strongly
recommend the awarding of this grant to The Grand Rapids SmartZone/Grand Valley state University.
Sincerely,
,/
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Thank you to our SPonsors
Worner Norcross & Judd I The Bonk of Hollond
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DAVID ROSEN, Ph.D., President
November 16, 2012
J. Kevin McCurren, Executive Director
Center for Entrepreneurship & Innovation
Grand Valley State University
401 Fulton St. West, 270 C. DeVos
Grand Rapids, MI 49504
Dear Kevin:
Kendall College of Art and Design would like to express our strong support for The
Grand Rapids SmartZone/ Grand Valley State University’s Center for
Entrepreneurship and Innovation request for a 3 year, $800,000 grant from the 21st
Century Jobs Fund Business Incubator Program. The Grand Rapids SmartZone will
use the grant to fund new companies in Michigan iStart, a six month launch pad for
start-ups. The program is a competitive business launch competition that is expected
to create 40 new businesses over a three year period. The Program is designed to
support launchable high growth companies in three different segments: Universities
and Colleges (students), Large Organizations/Corporations and Small Enterprises
(Not For Profits, Small Businesses and Individual Teams).
Since its founding in 1928, Kendall College of Art and Design has grown in harmony
with a region dominated by innovation, collaboration, the creative spirit, and
entrepreneurial thinking. It has cultivated the talents of artists and designers whose
work has made significant contributions to West Michigan and to the nation. Kendall
is justifiably proud of the accomplishments of its faculty, staff, students, and alumni.
In the coming years, Kendall will continue to produce the highest quality graduates,
whose impact will shape this region’s future and set a national example of work that
makes a positive difference in the world.
I believe that establishing the Michigan iStart program would provide significant
value to the State, and to students of Kendall College of Art & Design. The synergy
and collaborative nature of the proposed program can leverage key resources for to
support the validation and commercialization of new technologies, and in the process
create companies, jobs, and bring new investment capital to Michigan. Each business
will receive mentorship and access to technical experts. In addition to business
Kendall College of Art and Design of Ferris State University | (800) 676-2787 |
17 Fountain St. NW, Grand Rapids, MI 49503 support services, each business will have to $10,000-$25,000 in startup capital for use
in developing their business.
Kendall College of Art & Design is excited for the opportunity that the MEDC is
providing with this grant and again strongly recommend the awarding of this grant to
The Grand Rapids SmartZone/Grand Valley state University.
Kendall College of Art and Design of Ferris State University | (800) 676-2787 |
17 Fountain St. NW, Grand Rapids, MI 49503