There is a significant amount of investment coming into Detroit to support small business development and entrepreneurship. However, as a business owner, are you aware of the various types of programs and how to access funding to support your short and longer-term goals and needs?
An example is Invest Detroit.
In 1995, Detroit Renaissance (today, Business Leaders for Michigan), created and funded the $52M Detroit Investment Fund (DIF). In 2010, DIF management expanded the DIF model to create Invest Detroit Foundation (Invest Detroit). The intent was to increase economic development opportunities and leverage the existing infrastructure to support a variety of new funding tools.
Today, Invest Detroit serves as an umbrella entity for nine different targeted funds and programs which include: DIF, Core City Strategic Fund, New Markets Tax Credit Program, Urban Retail Loan Fund, Predevelopment Fund, Small Business Loan Fund, First Step Fund, Detroit Innovate and Venture Development Organization. Invest Detroit represents more than $200 million in funds and tax credit allocations focused on supporting a broad range of businesses and commercial real estate development. To date, it has leveraged more than $1 billion in total investment, primarily in the City of Detroit.
I’ve recently interviewed David Blaszkiewicz, President, Invest Detroit, for his thoughts on its funds and how resources are allocated across the city and region.
Lee: How would you define the vision and mission for Invest Detroit?
Blaszkiewicz: Invest Detroit is an organization driving catalytic change through financing of businesses and real estate projects. As a leader in the design and implementation of collaborative economic growth strategies, Invest Detroit utilizes a variety of funding tools to promote the creation of density, jobs and sustainability. As a 501(C)(3) and certified Community Development Financial Institution, its serves its mission to create a better quality of life for the communities served through well-defined initiatives such as transit oriented development to create vibrant, walkable and sustainable communities.
Lee: What’s the relationship between Invest Detroit, the New Economy Initiative (NEI) and Midtown Detroit?
Blaszkiewicz: Invest Detroit has always worked closely with its economic development partners. NEI and Midtown Detroit have been key drivers of renewal efforts and actively engaged and supportive in the identification of catalytic projects and programs for Detroit and the region. Invest Detroit has partnered with Midtown Detroit on numerous projects (most recently the Woodward Willis Building) and strategies. NEI is a major sponsor of Invest Detroit’s First Step and Detroit Innovate Funds, which are strengthening the growth platform for entrepreneurs through early-stage financing and development support.
Lee: There’s been significant investment in downtown Detroit and Midtown. What role does Invest Detroit have in assisting entrepreneurs in neighborhoods across the city and region?
Blaszkiewicz: Invest Detroit has several funding tools and programs to assist entrepreneurs. Invest Detroit’s Urban Retail Loan Fund provides financing and matching technical assistance grants to assist entrepreneurs to grow their business. Invest Detroit vice president Martin Dober also leads the efforts of the Venture Development Organization (VDO) which is designed to strengthen the region’s entrepreneurial ecosystem by 1) Building partnerships among regional assets, 2) Connecting high-growth companies with support programs and capital, 3) Promoting entrepreneurship while being inclusive of opportunities for minorities and women, and 4) Delivering programs that increase the breadth and depth of resources available to entrepreneurs.
VDO works alongside Invest Detroit’s First Step Fund and Detroit Innovate and provide support to companies in the Detroit region with high growth potential that are either investment prospects for those funds or existing portfolio companies of those funds.
Of note, funded by a grant from MEDC, Invest Detroit will also administer the Accelerate Michigan Innovation Competition, November 2014, which honors top early stage entrepreneurs and rewards them with $1M in cash and in-kind prizes.
Lee: Regarding the $100 million grant from J.P. Morgan Chase, it’s my understanding $25 million is being allocated to Invest Detroit. What types of initiatives will be supported with this investment?
Blaszkiewicz: Five million of the $25m was received in the form of a grant which will be used to enhance operations and two loan funds; the Pre-development Fund and Core City Strategic Fund. These funds provide financing to developers and community organizations to support commercial real estate projects in the greater downtown. $20,000,000 represents financing for the Chase Invest Detroit Fund which will co-invest with Invest Detroit’s other managed funds to promote commercial real estate projects and the development and expansion of commercial and industrial businesses. The CIDF will also assist with the acquisition of critical properties in targeted areas identified by key strategic initiatives as catalytic projects to advance economic development.
Lee: What resources and/or specific programs are available for start-ups and existing entrepreneurs focused on growth?
Blaszkiewicz: The First Step Fund is specifically designed to work with start-ups and early stage businesses. In addition, the Urban Retail Loan Fund supports new and growing retail establishments. Detroit Innovate provides investments in growing technology companies. Invest Detroit also provides technical assistance and matching grants for companies meeting specific criteria.
Lee: With respect to entrepreneurs, Detroit’s has the fourth largest number of minority-owned businesses. How is Invest Detroit supporting diverse businesses across the region?
Blaszkiewicz: Invest Detroit has made outreach activities a high-priority. Lenders work closely with community leadership and the foundations to identify and assist under-served minorities with access to capital. Through Invest Detroit’s broad spectrum of targeted funding tools, technical assistance grants and the type of lending which can be tailored to the needs of the specific transaction are some of the ways in which Invest Detroit is supporting diverse business creation and expansion.
Lee: Any new initiatives under consideration or currently being rolled out?
Blaszkiewicz: Invest Detroit is launching Invest Detroit Small Business Fund, a $7 million fund designed to provide access to capital to small businesses located in Southeastern Michigan. Part of Goldman Sachs’ 10,000 Small Business initiative and funded by Goldman Sachs and the W.K. Kellogg Foundation, the fund is designed to unlock the job-creation potential of 10,000 small businesses across the United States. The program brings together a network of local academic and non-profit partners who understand the needs of their local business communities to empower business owners to grow and create jobs.
Lee: If you’re a prospective or business owner, how should they feel about Detroit’s longer-term prospects for support and growth?
Blaszkiewicz: This is a great time to open or expand a business in the city of Detroit. With more capital available, new and expanded entrepreneurial programs and directed business opportunity programs, we have seen a dramatic increase in business activity. It’s only going to get better for prospective businesses. With bankruptcy largely behind us, a strong City administration and a dedicated corporate and philanthropic community, Detroit’s long term prospects are excellent.
For more information, please visit: www.investdetroit.com or call us at (313) 259-6368.