The MVCA Annual Research Reports provide relevant data regarding Michigan's venture capital industry.
- 2023 saw the most capital raised by Michigan-based funds of the past decade, overtaking 2016’s tally of approximately $450 million.
- Overall, venture activity has plateaued in 2023, indicating that Michigan remains somewhat insulated from national trends. Despite the collapse of key banking partners causing several weeks of uncertainty and prompting critical discussions about company banking practices, Michigan founders and venture firms ended the year on par with 2021 and 2022. While deal value in the Great Lakes region dropped from $17 billion to $6 billion, Michigan maintained steady investment levels with $1 billion invested.
- The majority of venture capital deal value in Michigan for 2023 was concentrated in Series B funding. This highlights the critical need for increased pre-seed funding to support the growth and development of the startup entrepreneurial community in the state.
- The Michigan venture community composition broadly indicates 70.4% of survey respondents identified as male. Female VC professionals made up 29.6% of respondents, which compares favorably with national averages. Recent research indicates that women represent around 11% of investing partners at VC firms and approximately 21% of all investment professionals.
- Exits at scale have been increasingly difficult to achieve in the US over the past few years. In 2023, exit value totaled $67.6 billion from just over 1,000 completed exits, both figures being the lowest since 2016. Michigan reflects this trend, with no significant surge in exits beyond 2021.
Produced by PitchBook, this comprehensive analysis showcases the positive impact of investment activity within the state in 2023. According to the report, four major firms collectively secured nearly $500 million in capital, indicating a notable shift towards larger, later-stage funds.
Investment activity in 2023 also demonstrated the strength of Michigan’s entrepreneurial ecosystem, with more than $1 billion invested into Michigan-based portfolio companies. Reflecting a broader market trend, this investment activity was driven by more mature companies, with 2023 seeing record-high average and median ages for funded companies. Despite a slow pace of exits and a scarcity of unicorn returns, there is a silver lining: Detroit has emerged as a major player on the global stage, ranking second among startup ecosystem growth worldwide, according to PitchBook’s recent Growth Score research.
Special thank you to the Michigan Economic Development Corporation for their generous support of this report. Download the Report