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Business Incubator Series: Interview With Ken Kousky, CEO, MidMichigan Innovation Center, Midland, Michigan (Part 2)

Posted on Monday, Mar 14th 2011

By guest authors Irina Patterson and Candice Arnold

Ken: Through our center, Chris Moultrup directs a program we call 1,000 Angels, which is a statewide initiative to expand angel investing in the state, whether it’s done by individuals on their own or working with universities in setting up alumni networks. We know that we need early-stage seed capital to grow these companies. So, the incubator has an intimate relationship with the angel club.

Through this relationship, we developed a statewide program called Boost Michigan, where we’ve now had several hundred companies do elevator pitches of their business plans.

In the Boost program, their presentations are reviewed and vetted by people we call ESPs, or entrepreneurial support professionals. Our state is filled with helpers. We’ve had a lot of federal and state funds, a lot of university interest, and a lot of EDA interest in helping small businesses grow.

We let those people judge these companies and coach them in our Boost program. From that, we take the best opportunities, coach them a little more, and have them present at a pitch night. We’ll let six companies present. They give five-minute presentations. Then we have an open Q&A. The audience are the angel and venture funds in the state.

We’re finding that we’re taking early-stage companies through Boost and pitching and getting companies funded in about a six- to eight-month cycle.

The program has been so successful in MidMichigan, we were invited to the Detroit Chamber to run it down at the southeastern and northwestern edges of the state. Traverse City, Michigan, has hosted two of these events.

We have tried to automate or accelerate the screening process and engage a lot of the support organizations in that process to help coach and mentor and vet the companies. We believe the link to seed capital is a vital component of what’s working for us.

Irina: How many companies have been incubated in your center to date?

Ken: We’re doing an updated survey. My guess is it’s about 36. Some of them are physical tenants, and some of them are nonphysical.

When you say incubated, it implies some level of hatching and completion. That’s why we like to think of ourselves more as an accelerator.

We have a company in the innovation center – that has been here for three years, received a round of angel funding, went on. We assisted in raising a $1 million in grants. Now, [it’s] in another $1 million raising stage.

While much of their work now is being produced in joint ventures and facilities off our campus, their offices remain in our facility. It’s an ongoing relationship. They certainly have hatched. They’ve gone from concept to proof of concept into a commercialization stage now.

We have many companies that have progressed. Some have left. Some remain in the facility. When we say left, I think we, normally, call it graduated. We’ve had several successful departures, but we try to continue working with them. [For example,] a woman who runs a financial services business moved out and took a more commercial presence for her service company, but she continues to work within our operations.

Irina: In the past 12 months, how many companies have been helped?

Ken: We have over 40 companies that we are actively working with. We have over 40 companies between those in the innovation center and those that are member affiliates or companies that we are taking through the capital development cycle.

Irina: Do you charge for your services?

Ken: Yes. This is really an important cultural issue that we take to heart, which is that we believe that our services have to be tested by the same mettle as our clients’ services.

That’s the cauldron of the act in the competitive marketplace. We’re not just offering generalized services from a foundation. We ask companies to pay for our services. To become a member today, we have a program that’s about $100 for a company to subscribe to our lowest level of basic services.

If we took state and federal grants – well, we’ve visited a lot of centers that spend a lot of money on four-color glossy presentations about what they do, but they give away their services because they’re underwritten by the state. They measure the success of the service by how many people are in the audience.

Too many of those audiences in Michigan, we find, are helpers helping helpers. So, it’s one agency or one economic support group attending another economic support group’s events. You look around the room and say, “Where are the entrepreneurs?”

We spend most of our time trying to talk to the entrepreneurs.

This segment is part 2 in the series : Business Incubator Series: Interview With Ken Kousky, CEO, MidMichigan Innovation Center, Midland, Michigan
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