Start Garden Expands to Keep Up with Changing Grand Rapids Ecosystem
In 2012, Amway scion Rick DeVos launched Start Garden, a $15 million seed fund based in Grand Rapids, MI, that would support early-stage startups in $5,000 increments. Those startups would then be invited back a few months later to update the investors on their progress. If Start Garden liked what it heard, it awarded the startup another $20,000, and it kept inviting startups back and awarding more money as long it liked the company’s progress. The maximum investment each company could snag was $500,000.
Now, according to Start Garden chief operating officer Mike Morin, that’s about to change. While Start Garden will still invest in very early-stage startups, it has bumped up the maximum investment to $1.5 million per company. (According to the Start Garden website, there are three companies that have raised the maximum $500,000 since the organization’s inception: Alsentis, Blue Medora, and Verify Valid.)
Morin says he’s not sure if Start Garden will keep the format where it awards funds in $5,000 increments. Since the fund is backed by private investors, the total amount Start Garden has to invest was not disclosed.
“If you go back , we really didn’t have portfolio companies,” Morin adds. “Now, we have a portfolio that is growing, gaining traction, and raising a significant amount of capital. We wanted to be sure to be there and provide leadership to those companies and entice other investors.”
Morin also points out that Start Garden in agnostic in terms of which industries garner the most funding. “We intentionally set up to let the market dictate instead of being prescriptive,” he says. So far, Start Garden has invested in everything from apps to hardware to lifestyle companies.Start Garden has added Mike DeVries, a veteran Ann Arbor venture capitalist, to advise and guide the startups receiving high-dollar investments from Start Garden.
Start Garden is also opening a new space on Pearl Street in downtown Grand Rapids that is three times the size of its old location. The facility can hold up to 100 people, which will come in handy as Start Garden tries the co-working model for the first time.
Non-dedicated desks are $150 per month, dedicated desks are $300, a three-person “pod” is $750, and a six-person pod is $1,250 per month. Morin says the Start Garden team is still selecting the tenant companies, but he encourages interested startups to apply.
“We have a half-dozen startups committed to being here as of now,” Morin says. “It’s not just open to our portfolio companies, but any startup that’s interested in growing and collaborating with other founders. We’re hoping everybody from the [local startup] ecosystem will make this space their home.”
Start Garden’s expansion is just the latest milestone in a city that is quickly becoming a bonafide hub for tech startups and cutting-edge ideas. Andrea Chocko, who organized Startup Weekend Grand Rapids last month, also sees lots of growth and changes in the local scene. This year, more than 150 entrepreneurs participated in the event held Jan. 17 to 19, and this year’s winner, a company called Hex, created a Bluetooth device for sports or outdoor use that lets you control a cell phone, iPod, or other device in your pocket without ever having to take it out in the cold. Chocko says there is a lot more opportunity in Grand Rapids these days. She says in 2009, during the first pitch contest she participated in, what she heard from the investors in the room was crickets. “They didn’t want to take risks or understand risks,” she says. “That has definitely changed over the years.”
Chocko also says she sees a lot more meet-up groups hosting meetings and entrepreneur-led support organizations in Grand Rapids than she did in the past.
When asked about the area’s challenges, Chocko says Michigan needs a big exit and more investors, especially those from out of state. She adds, “We need more people willing to take risks, more mentors, and entrepreneurs who can act as mentors. We definitely are getting there.”