Bank of America commits $20m to Invest Detroit Ventures' early-stage startup fund
Invest Detroit Ventures (IDV) announced an investment from Bank of America to support IDV Fund IV, a newly-established $20 million fund that provides capital investment to Michigan startups during early, critical stages of development.
Patti Glaza, Managing Director, IDV: "This investment by Bank of America is significant because there is not enough early-stage capital for Michigan-based startups. Only 10% of Michigan venture capital is currently invested at the seed stage, resulting in entrepreneurs spending too much time fundraising instead of executing in a space where time to market is critical. Founders of color have an even bigger challenge as they try to navigate systemic barriers to funding."
IDV IV, the fourth fund managed by Invest Detroit Ventures, will build on the $22 million invested in 175 companies over the past decade. The fund will continue to invest in pre-seed and seed stage high-growth and high-tech companies based in Michigan. The unique fund structure will combine traditional investment capital with philanthropic capital to better serve Michigan's entrepreneurs. Up to half the fund will come from partners in which their investment returns will recycle into IDV's evergreen fund to support innovation in the state long-term. To date, over $1 billion in additional capital has been raised by their investments.
The fund will continue to focus on underserved entrepreneurs, including women, minority, and immigrant founders. In addition, capital and support to help bring ideas to early-product release is provided by the organization's FAM (Funding, Access & Mentorship) fund.
Matt Elliott, President, Bank of America Detroit: "Bank of America's equity investment in Invest Detroit Ventures underscores our ongoing efforts to address the persistent gap in access to growth capital for minority-led businesses. Being based in Detroit, Invest Detroit Ventures is well positioned to help more women, minority and immigrant entrepreneurs scale their local business ideas, which will ultimately spur job growth and create more economic opportunities across the state of Michigan."
Last year, Bank of America committed more than $6 million in grants to more than 65 metro Detroit organizations. These organizations create pathways to employment and job training, support community development and housing affordability, address the small business eco-system and its entrepreneurs and drive healthy outcomes for communities through innovative health care delivery while supporting basic needs functions.
Additionally, Bank of America employees volunteer 20,000 hours and donate over $1 million in matching grants to Detroit each year. In 2019, Bank of America also made a $1 million grant to support Invest Detroit's work in neighborhood development.
Dave Blaszkiewicz, CEO, Invest Detroit: "We are thrilled to see Bank of America add its support of early-stage companies to the Detroit region as startups are a major driver of economic growth. Though our venture program supports startups across the state, 25% of our founders are from Detroit, and the more we can build the state's ecosystem, the more Detroit becomes a startup destination."