How To Start a Startup @ Umich

How to Start a Startup @ UMich

By: Ryan Lieu

From institutional resources to prominent entrepreneurial alumni, Michigan is a great place to be a student startup founder.

Our graduates have gone on to found companies like Twilio, Duo Security, Groupon, and Google, and when it comes to raising capital as a student, we’re one of the top ten universities in the nation.

However, everything can get overwhelming — the abundant resources of campus organizations, the academic resources in business and engineering, and the alumni network all make it seem as though you need to take advantage of every resource out there.

The goal of this guide is to help you understand what’s out there, what resources may be best for you, and how to navigate your overall journey as an entrepreneur on campus.

One thing to keep in mind while you’re reading this guide is that all these resources are in fact just that: resources. You won’t go from having no idea to a venture-backed unicorn just by stepping through every opportunity. The highlighted resources will certainly be helpful at each stage, but if you don’t have a project you believe in, you definitely will not get the most out of them. You will get the most out of this guide if you feel the underlying urge to start a company and maybe even have an idea or two you’re dabbling in, but have no idea what to do next and need a bit of guidance. If you’re in the later stages of your startup, the resources outlined in later parts might still be helpful in discovering new opportunities to help you scale.

To make things easy, this guide is broken down into 3 phases:

  1. Getting Started
  2. Starting Up
  3. Launching

Part One — Getting Started

The first step in getting plugged into our entrepreneurial ecosystem is through broad exploration — join student organizations like Shift and Michigan Hackers to grow your knowledge base and meet other motivated students, take classes related to the industries and ideas you’re interested in, and explore resources at university-run programs like ELP and optiMize.

At this stage, you’re pretty early in your startup lifecycle at Michigan. Perhaps you’re looking for an equally passionate co-founder, or maybe you’re still ideating and need a community to work with and bounce ideas off of. Getting started can be one of the more daunting parts of this entire process, but Michigan has plenty of resources — both student and university run — to help you get off the ground. The goal here is really to expand your knowledge on startups and meet other interesting people that may be able to help you along the way.

Student Organizations

The different organizations on campus focus on one of two core value-adds: helping students build entrepreneurial skill-sets, and helping student founders scale their startups. Here’s some more context around specific organizations and what they offer:

  • Shift Creator Space: Shift is a student run incubator program that consists of a cohort of around 50 students each year. Both a home and a maker-space, Shift attracts self-motivated founders at Michigan.
  • MPowered: As one of the largest entrepreneurial organizations on campus, MPowered runs a multitude of programs centering around entrepreneurship — from pitch competitions to workshops.
  • Michigan Hackers: As the name suggests, Michigan Hackers is a student group that focuses largely on computer science and software development. They run a multitude of great educational workshops on software development and attract some well-known companies to give really informative tech talks.
  • M-HEAL: This is the place to be if you want to focus on the intersection of entrepreneurship and global health. The organization is project based, meaning that students conceptualize products that serve the health needs of under-developed communities.
  • Entrepreneur and Venture Club: More business aligned, EVC is focused on networking aspiring entrepreneurs and venture capitalists. They also run professional development events and trips throughout the year.
  • Michigan FinTech: A relatively new organization, Michigan FinTech centers around learning, developing, and working around new FinTech ventures. They’ve recently opened a really interesting $20,000 dollar cryptocurrency fund.
  • ENT: A combination of an entrepreneurial community and greek life, ENT (epsilon nu tau) is a pre-professional (co-ed) fraternity focused on entrepreneurship. ENT offers a tight-knit community of startup-minded brothers.

University Organizations

Michigan’s university-run programs tend to fall under a few general branches, with each belonging to a specific department or school. While certain programs may fall under the jurisdiction of a specific school, opportunities provided by these programs are generally open to all Michigan students.

  • Center for Entrepreneurship: The CFE is run out of the engineering school and provides several programs for students — classes, office hours & advising for student startups, numerous funding opportunities, accelerators, and programs (detailed below in later stages).
  • Zell Lurie Institute: The ZLI is Ross’s entrepreneurship department. Like the CFE, the ZLI runs a number of fantastic opportunities and funds that will become useful in the later stages of your startup. They also run educational workshops that are helpful on the business end throughout the year.
  • Entrepreneurs Leadership Program: ELP (lots of three letter abbreviations here) is an experiential year long program run by the Center for Entrepreneurship that takes in 25 students. The program consists of direct mentorship, entrepreneurship classes, as well as placement at a Michigan-based startup in the summer. ELP’s great if you feel the need to learn more about entrepreneurship before you found your own company.
  • OptiMize: Formerly a student organization, optiMize is now a department at Michigan that focuses on social entrepreneurship. They offer year-long workshops and mentorship, culminating in a fellowship that provides a bit of initial funding (detailed later).
  • Innovate Blue: Innovate Blue is a hub for most things entrepreneurial at Michigan. It’s a great resource to get a hang of all the programs Michigan has to offer.

Relevant Course Offerings

When looking through academic resources on the entrepreneurial side, search for classes that will directly benefit the skills you need to build your startup. A few examples of great courses to take based on the skill-sets you’re looking to learn:

Building an app? → Mobile App Development (EECS 441).

Interested in blockchain and cryptocurrency? → Intro to Cryptography (EECS 475).

Interested in AI? → Intro to Machine Learning (EECS 445).

Non-technical entrepreneurship? → Entrepreneurial Design (ENTR 390)

Logistics and details of IP? → Patent Law (ENTR 408).

Part Two — Starting Up

So, you’re ready to start building your product, talking to customers, and getting your company off the ground.

Where do you start?

There are plenty of pitch competitions, incubators, and other resources to help you get started, but

Start building.

Look at student focused pre-seed funds like the Zell Early-Stage Fund or incubators like TechArb to get some initial cash if need be, but make sure to put the majority of your focus and time on your actual product and customers. Outside of that, the resources on campus are supposed to be supplements that further help you with your product and customers.

Now, let’s dive into the resources you may need along the way.

Competitions

Competitions and challenges can be a great way to start building out and proving your product. You’ll get outside feedback, more hands-on focus on your product and market, and a chance to get a bit of grant-based capital if you win.

  • MHacks: MHacks is one of the largest and most prestigious collegiate hackathons in the nation. As a result, it attracts large companies, venture firms, and some of the most talented hackers in the nation. If you need some motivation to get that MVP done, MHacks is the place to be.
  • Michigan Business Challenge: Run by the Zell Lurie Institute, the Michigan Business Challenge is a startup competition. Your company’s pitch, financial assessments, and business plans will be assessed and judged by experienced professionals. Top companies receive a $25,000 cash prize.
  • Student Accelerate Michigan Innovation Competition: Accelerate Michigan is one of the more competitive business competitions in Michigan. The student track is a little lower stakes as it is restricted to only students and not full-time companies, and is a good way to win some money.
  • The Startup: A multiple stage startup competition, The Startup is run by the CFE and awards winning companies $15,000 dollar cash prizes. The multiple rounds of The Startup allow you to get multiple stages of feedback throughout the year as your company evolves.

Early Funding

A small injection of initial capital to start prototyping or building your MVP can be incredibly helpful, if needed. From grants to programs to venture funds, Michigan’s got plenty of resources you can tap into:

  • Dare to Dream Grant: The Dare to Dream Grant is a program that provides early stage funding and feedback for student-founded companies. Selected students receive $500-$5000 grants.
  • Social Venture Fund: The Social Venture Fund is a student run fund that invests in social impact-driven companies. Focusing on solutions in education, food systems, environmental, health, and urban revitalization , the fund conducts primarily pre-seed investments.
  • Zell Early-Stage Fund: The Early-Stage Fund is an entirely undergraduate run investment fund that invests in companies in the Michigan community. A relatively new fund, the team recently made its first major investment in the healthcare company Admetsys.
  • Zell Entrepreneur’s Program: The Entrepreneur’s Program awards up to $10,000 dollars in funding for seniors preparing to graduate from Michigan to pursue their startups. The program also provides students with mentorship and networking opportunities.
  • 1517 fund: While not necessarily a Michigan-specific opportunity, 1517 is a fund that has supported plenty of early-stage Michigan companies in the past to great success. 1517 partners Danielle Strachman and Michael Gibson (formerly of the Thiel Fellowship) award $1,000 dollars to promising students and companies and also give some really great advice for early stage founders.

Early Stage Incubators/Programs

Being a full-time student and full-time startup founder can be difficult. With Michigan’s early-stage incubators and accelerator programs, it can be a little bit easier. Here’s a run down of what each of them offer:

  • Techarb Student Accelerator: A collaboration between multiple university departments, TechArb is a selective student incubator that runs a year-long program. TechArb provides funding, mentorship, a physical workspace, and connections to the surrounding entrepreneurial community to accepted companies.
  • Venture Accelerator: The Venture Accelerator is a program run by Michigan Engineering’s Tech Transfer Center. The accelerator’s main goal is to commercialize Michigan research and intellectual property. The accelerator provides a large office and lab space, as well as a suite of business services.
  • OptiMize Innovation Challenge / Fellowship: A year long program, optiMize’s innovation challenge includes mentorship and workshops to help develop your social innovation project. At the end of the challenge, the most promising founders are chosen to receive $20,000 grants and become optiMize fellows who can work on their projects over the summer.

Part Three — Launch

Woah. You did it!

You’re not done yet though — things are just getting started.

It’s time to tap into the resources that focus specifically on helping companies scale. Full-time accelerators and opportunities for funding are generally where you want to set your sights on at this stage. Here, you may want to tap into both Michigan resources and resources in the broader tech community at-large.

Full Time Accelerators

From 500 Startups and Y Combinator to local accelerators in Ann Arbor and Detroit, Michigan startups have infiltrated several different valuable communities.

  • TechLab at MCity: The TechLab is an incubator that focuses on early-stage companies in the autonomous vehicle industry. Startups get access to the MCity test facility, a mock city designed for testing autonomous vehicles, and student interns.
  • Desai Accelerator: Desai is a full time incubator and accelerator run by both the CFE and ZLI. Startups in Desai receive seed funding, business services, mentorship, a large workspace, and Michigan student interns.
  • SPARK Ann Arbor: SPARK’s Central Innovation Center is a co-working space and incubator located in downtown Ann Arbor for health care, life sciences, and biotechnology companies.
  • Techstars Mobility: Techstars mobility is the Detroit arm of the larger Techstars family of accelerators. As the name suggests, the incubator supports companies that primarily focus on transportation.

Funding

Aside from the larger-known, institutional investors in Silicon Valley, there are a number of Midwest and university-focused venture funds that have been critical in catalyzing the growth of Ann Arbor-based startups. To help you think through the different options out there, this portion is split into 3 categories: Midwest-focused venture funds, Ann Arbor/Detroit venture funds, and University-focused venture funds.

Midwest Funds

  • Drive Capital
  • Hyde Park Ventures

Although not Michigan based, Drive and Hyde Park have invested pretty heavily in Series A rounds for several of Ann Arbor’s most successful startups. These two funds are great options to explore if you need to raise larger amounts of capital than typical pre-seed and early seed rounds.

Ann Arbor Funds

  • E-Lab
  • Detroit Venture Partners
  • Wolverine Venture Fund
  • Huron River Ventures
  • Zell Founder’s Fund
  • Zell Lurie Commercialization Fund
  • RPM Ventures

All of these funds have their own niche focus and investment philosophies, but they are all based in Ann Arbor or Detroit — as a result, they may be appealing options to explore if you want to work with investors that benefit you geographically.

College Network Funds

  • Dorm Room Fund — Built by students and powered by First Round, DRF provides founders with a strong network of investors, world-class mentors, and a $20,000 check.
  • Rough Draft Ventures — Powered by General Catalyst, RDV is a student team building and empowering the largest network of student founders.
  • Contrary Capital — a university-focused venture fund with investors on campus at more than 40 universities across the U.S.

These university-focused investors are national funds that tap into student networks to identify and invest in the most promising student-founded startups. While access to funding is certainly helpful, these funds are also a great way to access other resources and mentorship outside of Michigan’s ecosystem.

Beyond

At a certain point during your journey as a startup founder on Michigan’s campus, you may think about whether or not you should leave Ann Arbor. Most would advocate for moving to cities with a geographical advantage for your company, such as San Francisco, but there are benefits to staying. Companies like Clinc, Trove, Farmlogs, and Duo Security (which was just valued at north of $1B) have all stayed in town, and with that comes the benefits and resources of the UMich’s ecosystem, lower operating costs, and lower competition for resources like funding, talent, and office space.

As a reminder, focus on your company more than anything else entrepreneurship-related — the resources, funding, and programs are all helpful but you shouldn’t focus all of your time and energy and those. They are here for you to access when needed, but if you don’t focus your efforts on your product and company, you won’t find those resources valuable anyway.

If there’s anything we missed that you think should be included in this guide, please feel free to send an email to haris@drf.vc.

Dorm Room Fund is dedicated to supporting student founders across the country and helping them reach new heights — Check out our 5 year report to learn more about what students are capable of building

Working on a startup? Get in touch on twitter or here. If you’re interested in keeping up to date with DRF, signup for our newsletter here.

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Dorm Room Fund

Built by students and powered by @FirstRound, we provide our founders with access to strong investors, mentors, and a check. Email: info@dormroomfund.com.