The first rule of starting any entrepreneurial venture is: Find a problem that needs solving. Detroit, as we all know, has some big social problems: poverty; crime; homelessness; abysmal literacy rates; rampant unemployment. It should hardly be a surprise, then, that a motivated young class of social entrepreneurs has sprung up in the city, and the successful startups they’ve created are gaining the attention of the region’s veteran entrepreneurs. The local boom in social entrepreneurship has even spawned a business incubator, Wayne State University’s Blackstone LaunchPad, and a capital fund, University of Michigan’s Social Venture Fund.
“Detroit is a great testing ground,” said Jeremy Schifeling, a fellow at the Social Venture Fund. “We want to make this city the epicenter of social impact.”
U-M’s Social Venture Fund, launched in September 2009, is the first student-run fund of its kind in the nation. Schifeling described its business model as having a “triple bottom line” of profit, environmental concerns, and social impact. The fund focuses its investments in four areas: health, education, food systems, and the environment and urban revitalization.
Housed at the Zell Lurie Institute for Entrepreneurial Studies, the U-M Social Venture Fund received more than 100 business plans for consideration during its first year of operation. Though most of the interest comes from startups in Southeast Michigan, it’s not exclusive. Thirty students from across campus, both graduate and undergrad and from schools as diverse as Natural Resources, Finance, Education, and Public Health, administer the fund, which has the capacity to invest $250,000 per company, though Schifeling says the typical investment amount is $50,000 to $100,000. The money in the fund comes from within the university, from high-net-worth individuals, and educational foundations.
U-M’s Social Venture Fund doesn’t just invest in companies—it also offers assistance in honing organizational skills and solidifying business plans. It’s a fairly ambitious program, especially considering that the folks running it already have full academic plates.
“It’s intense,” Schifeling says. “We’re trying to run a world-class fund in between classes.”
Quentin Love, Blackstone LaunchPad’s Program/Marketing Coordinator, knows a thing or two about student intensity. Funded by the Blackstone Charitable Foundation and modeled after a program at the University of Miami, the LaunchPad opened its doors a little over a year ago with the goal of being a comprehensive resource for student entrepreneurs at Wayne State. LaunchPad’s goal is to help the students develop “bulletproof business plans,” and to that end it offers workshops, networking events, and consulting sessions, as well as a brick-and-mortar location on campus for like-minded young innovators to gather and hash out ideas.
“We tell the students that we won’t run their business for them, but we’ll do everything we can to help them get it off the ground,” Love says.
One factor that sets the LauchPad apart is …Next Page »
Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or firstname.lastname@example.org or follow her on Twitter @xconomyDET.