Original NEI Vision:
Southeast Michigan is a prosperous region with high per capita income and low unemployment, where all residents who are willing to learn and work will thrive in the new knowledge economy.

Original NEI Goal:
To speed the transition of southeast Michigan to the new knowledge economy, and to ensure that this occurs in a manner that is as complete and thorough as possible and allows all residents to participate. Preparing, retaining, and attracting talent is key to this transition.

The Business Accelerator Network of Southeast Michigan, a region-wide network for building and retaining new business in southeast Michigan, included the region’s largest business accelerators:

• Automation Alley
• Ann Arbor Spark
• Macomb-Oakland University
• INCubator
• TechTown

Growth Capital Network was charged with two primary goals:

• Deliver data, analyses and stories about the impact of NEI and its role in shifting the local economy
• Build a performance measurement system for NEI grantees

Detroit Regional Innovation Network’s organizations were primarily concentrated in Detroit’s 3.5-mile Innovation Corridor that runs from Midtown to Downtown Detroit.

Focus areas for investment were in six key areas:

• Ideas
• Tools
• Investment
• Place
• Connections
• Talent

Two place-based, neighborhood-specific entrepreneurial programs were granted funds.

ProsperUS provided training in the Cody-Rouge, North End and Southwest Detroit neighborhoods. ProsperUS was a program designed specifically for immigrants and entrepreneurs of color.

ACCESS focused on bringing entrepreneurial training and mentoring to two communities: the Dearborn/Detroit neighborhood of Warrendale that has a high concentration of Middle Eastern immigrants and the city of Hamtramck that includes Yemeni, Bangladesh and Bosnian immigrants. ACCESS also provided a mentor and professional service provider network, a micro-loan fund and resource mapping.

While grant-making continued, NEI spent 2013 reflecting on what was learned and determining the best course moving forward. Although much had been accomplished to identify and develop an entrepreneurial ecosystem, more was needed to ensure its growth and sustainability.

Therefore, it was determined more work was required to support entrepreneurship, small business growth and innovation.

The BizGrid is an interactive online directory and a physical infographic designed to help entrepreneurs navigate the landscape of organizations providing business assistance in Detroit.)

NEIdeas was started to provide grants directly to existing small businesses across every zip code in Detroit, Hamtramck and Highland Park with ideas for growth. This program had a low barrier to entry for the application process and all materials were translated in five languages.

It not only provided over $500,000 in direct grants to 36 small businesses, it provided an entry point for all 600 businesses who applied to access the growing network of available small-business services NEI had been supporting.

Of the first 30 winners, 73 percent were BIPOC owned, 60 percent were women owned, and 50 percent were both women and BIPOC owned.

• enhancing business advocacy in the neighborhoods,
• strengthening the readiness of new and growing small businesses to access capital, and
• promoting the availability of accessible neighborhood retail and commercial spaces.

At each High Growth Happy Hour event, a founder of a successful larger company, such as Garden Fresh or Shinola, shared stories about launching and scaling a company in southeast Michigan; this was followed by an informal Q&A session and networking with an audience of aspiring high-growth entrepreneurs.

Neighborhood strategy focus areas:

• Providing grants to three community development corporations serving entrepreneurs in three Detroit neighborhoods: Grandmont Rosedale Development Corporation in northwest Detroit, Central Detroit Christian CDC in the North End, and the Osborn Neighborhood Alliance in northeast Detroit.
• Supporting organizations such as ACCESS, Build Institute, TechTown SWOT, Accounting Aid Society, ProsperUS Detroit, and FoodLab that provide neighborhood entrepreneurs with training and services.

Convening a quarterly worktable dedicated to enhancing business advocacy in the neighborhoods, strengthening new and existing businesses’ readiness to access capital, and promoting the availability of accessible neighborhood retail and commercial space.

In addition to selecting and sponsoring the Detroit delegation, NEI partnered with the State Department to develop and host “The Detroit Story,” an official GES side event featuring panel discussions between entrepreneurs engaged directly in Detroit’s social, food, and mobility sectors. The event, which took place at the Hana Haus in Palo Alto, California, was attended by more than 100 people and provided NEI and Detroit entrepreneurs with exposure at one of the most prominent entrepreneurship events in the world.

Key Insights:

• Invest in your assets, not your deficits.
• Keep showing up. You’ve got to be inclusive from day one and at all levels to impact systemic change.
• An ecosystem is a complex thing. Don’t try to force it to be one thing or another. Instead, establish and reinforce connections.
• Need a regional consciousness around the entrepreneurial support work
• Never declare mission accomplished
• Focusing on job creation is not enough; focus on how you change culture through economic development.
• The value of place is important to attracting, retaining, and growing entrepreneurs and talent who will create a better future.
• Develop environments that not only support entrepreneurs’ business needs, but also those that create a sense of community among entrepreneurs.
• Entrepreneurs create jobs, wealth, opportunities and positive impact for communities. Their innovations lead to positive social change and improved quality of life.

Detroit Innovation Fellowship is a talent-development program that promotes and invests in social entrepreneurs leading projects to strengthen neighborhoods in Detroit, Hamtramck, and Highland Park.

Twelve fellows representing nine projects were selected to participate in the inaugural 2018 cohort. Each fellow received a stipend ($10,000 per project), as well as additional funding for professional development.

Capital Access report key findings:

• There is a continuum of capital available for new and existing entrepreneurs with better access in metro Detroit than in Hamtramck or Highland Park.
• Resource needs for small business owners are often interrelated, complex, and nuanced. Solving for one area of need, such as capital, requires a view of the business and its owner holistically.
• For those who come from neighborhoods or communities that have historically lacked access to money, education, or networks of people who can serve as mentors, there are additional layers of awareness, trust, systems navigation, community-building and institutional bias that must be addressed to affect positive change.
• Among small businesses owners nationwide, 68 percent had outstanding debt in 2017, and 87 percent of small business owners relied on the owners’ personal credit score to obtain financing.
• The presence of bank branches in a neighborhood plays a role in the ability of that institution to collect informal information that can improve the ability to lend and contribute to more favorable credit terms.
• Federal Reserve survey results show that the location of a bank’s branches is the single most important factor influencing customers’ choice of bank, particularly in areas with lower incomes.
• Low-income entrepreneurs have limited ability to either rely on personal sources to fund a startup or use retained earnings to support an existing business.
• Detroit-area nonprofit lenders and Community Development Financial Institutions (CDFIs) are critical sources of capital for entrepreneurs along the continuum, particularly for those who are new to credit or in search of smaller amounts of capital.
• Real estate-based lending options are also important for larger or more mature businesses. A key issue in Detroit is the volume of empty commercial space and blighted residential and commercial buildings.
• Equity investment is an option for businesses at the larger end of the capital spectrum, but equity investors are often looking for businesses with high-growth potential, strong margins and a scalable market.

Recommendations/Insights:

• It is essential that local capital providers support an ecosystem approach to capital access that leverages collaboration over competition to ensure the right type of capital is available at the right time for an underserved entrepreneur.
• Money alone will not address the resource needs of underserved entrepreneurs who need support building financial and small business management skills, navigating the capital ecosystem, and building trust in systems that were not originally built for them.
• It is essential to address capital constraints at the macro level, not just at the organizational or neighborhood levels, to overcome structural issues and support long-term success of underserved entrepreneurs.

The series featured three interactive workshops that brought together NEIdeas Alumni business owners and expert service providers around three key topics:

• Investing in Design to Enhance Growth,
• Financial Strategies for Growing Your Business, and
• Accelerating Growth Through Marketing + Promotion.

Key insights:

• There is a reciprocal relationship between entrepreneurs and their communities.
• It takes a community to raise an entrepreneur, contrary to the socially pervasive belief in our culture—often stemming from the traditional American definition of success—that entrepreneurs “make it” on their own.
• Entrepreneurs circulate in many types of different communities. Some are geographic. Some are based on their business. Some are oriented to a particular subject matter or area of interest. Some are physical, while others are virtual.
• Entrepreneurs may feel a closer connection to their local community than larger, more established global organizations.
• There are a range of ways entrepreneurs give back to their communities. Some are financial, but assets like knowledge and networks are also valuable reciprocity opportunities.
• The concept of reciprocity in community engagement and entrepreneurship can be complicated by the blurred distinctions between for-profit and social entrepreneurship.
• Remaining closely connected to community is good for entrepreneurs’ businesses. Women are particularly aware of this phenomenon.
• Engaging in community benefits entrepreneur’s businesses, the entrepreneur themselves, and their communities.
• There is also interrelationship between entrepreneurship, philanthropy, and American communities. Entrepreneurs create businesses that create wealth in our economy. Philanthropy plays a major role in catalyzing the entrepreneurship ecosystem that keeps entrepreneurs in their community and helps them be successful.

Key Insights:

• The term “entrepreneur” is not ubiquitous. Most Detroiters think of entrepreneurs as people who are self-employed or open a family-owned business or franchise business. Before being presented with a definition, 29 percent of respondents considered themselves to be entrepreneurs, 63 percent did not, and 8 percent were not sure. After receiving a definition, more than 40 percent of Detroit residents considered themselves entrepreneurs.
• Research shows that 42 percent of Detroiters do not consider there to be much opportunity in the city of Detroit for the average person to get ahead economically. Subsequently, Detroiters see entrepreneurship as a way to make their own opportunity regionally.
• There is a reciprocal relationship between entrepreneurs and their communities. Most residents (84 percent) think entrepreneurs have a positive impact on the city.
• Though nearly half of Detroit residents believe that there are some or a lot of resources available from government or nonprofits to start a business, financial security did not feel like a possibility for most.
• Though small businesses comprise the majority of employers in Detroit, they account for only 14 percent of jobs in the city. Building and supporting the growth of small businesses in the city may be a valuable strategy for leveraging entrepreneurship into employment opportunities for more Detroiters.