Michigan Pre-Seed Capital Fund

The Michigan Pre-Seed Capital Fund supports high-tech start-up companies as they near commercial viability by providing access to early-stage capital investment or micro loans to accelerate company development. Supported by a consortium of Michigan SmartZones, these funds will extend the personal investment of entrepreneurs during the critical stage when they are developing their businesses to the point of readiness for outside investment.

The fund targets companies throughout the state that are creating the newest technologies in the following competitive areas:

To begin the application process follow these steps:

Start with the checklist of things you will need to answer in preparation for funding.
Contact a SmartZone (review list at right for your local SmartZone contact) to review and help prepare your company for funding.
Decide with your SmartZone the milestones you need to achieve with new funding that they will be able to help you with.
Secure the match of new cash you need for Pre-Seed Fund acceptance.
After completing the due diligence, the SmartZone will give you access to the application form.

Additional application information for Pre-Seed investment:
Eligible companies will need to be past the concept development and analysis phase, and have specific milestones identified for achieving commercialization suitable to a matching investing partner of the Pre-Seed Fund.

These needs might include hiring key management executives or specialized consultants, regulatory review, contract manufacturing agreements, marketing strategies and sales plans, etc. At this stage, the Pre-Seed Fund will be able to fund $50,000 to $250,000 per company alongside their investment partner who will provide a minimum dollar for dollar match.

The goal of the Pre-Seed Fund is to position these companies for follow-on investment. The concept of identifying early, matching investment partners with each company provides the company with a level of professional direction they would otherwise not have at this stage. These professional investors will also know how to garner the attention of the Venture Capital community at the appropriate time and facilitate the next level of investment for a win-win situation.

Additional application information for micro loan:
Loans will range from $10,000 to $50,000.

Companies must meet the following criteria before applying for funding:

Be located in Michigan
Have the rights (ownership or license) to innovative technology, or be seeking a strong IP position
Meet the definition of a small business (per the SBA)
Funding is to be used for the development of a business that is focused on the commercialization of technology of interest to the 21st Century Jobs Fund
Loans may not be made into a publicly held company, but may be utilized to spin technology out of a public company and establish a new private entity.
Have potential for rapid growth with majority of future sales revenue outside the state

Companies can only be brought to the Fund by a sponsoring SmartZone.

The submission package must include:

Business plan (maximum 10 pages counting financial pages)

Company overview
Market information
Operations
Product description
Summary of Management talent
Financial proforma including forecast for next 12 months
A Certificate of Good Standing from the State of Michigan
Use of funds

Recommendation by SmartZone on milestones to be accomplished and role the SmartZone will commit towards facilitating to help achieve such milestones
Strategy for follow-on funding

Before actual funding occurs the following documents will be provided and placed in the Administrators files:

Background Check Reports
Certificate of Good Standing with Michigan
Executive Summary
Promissory Note

Pre-Seed Fund:
Application Information
Frequently Asked Questions
Due Diligence Checklist
The Role of a SmartZone
Michigan SmartZones
Local SmartZone Contacts
Scoring Sheet

Micro Loan:
Micro Loan Program
Subordinated Promissory Note
Micro Loan Web Cast (5-4-09)
Micro Loan PPT (5-4-09)

Industry Sector Technology Definitions:
Advanced Automotive
Alternative Energy
Homeland Security
Life Sciences

Call 734 761-9317 for more information or email
skip@AnnArborUSA.org.

Ann Arbor SPARK: 201 S. Division, Suite 430 • Ann Arbor, MI 48104 • 734.761.9317

SPARK Business & Wet Lab Incubators
SPARK Central Business Incubator: 330 East Liberty Street • Ann Arbor, MI 48104
SPARK East Business Incubator: 215 W. Michigan Avenue • Ypsilanti, MI 48197
Michigan Life Science Innovation Center: 46701 Commerce Center Drive • Plymouth, MI 48170

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