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Why Michigan Could Become a Startup Powerhouse

The unicorns in Michigan demonstrate a fertile startup ecosystem with unlimited opportunities. A couple weeks ago, StockX became the state’s newest in a quickly-growing cohort of unicorns, which includes two other startups that also earned the elite status this year. In February, OneStream Software announced that it had not only become a unicorn but that it is profitable as well, an achievement…

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The unicorns in Michigan demonstrate a fertile startup ecosystem with unlimited opportunities. A couple weeks ago, StockX became the state’s newest in a quickly-growing cohort of unicorns, which includes two other startups that also earned the elite status this year. In February, OneStream Software announced that it had not only become a unicorn but that it is profitable as well, an achievement that few startups can claim — even by the time they exit. In the same month, electric vehicle startup Rivian also earned a billion-dollar valuation when it received a significant investment from Amazon. The startup secured another large round of funding just two months later from Ford.

Last month, I had the opportunity to visit Ann Arbor during a week-long series of tech events curated by economic development engine Ann Arbor SPARK. This event series brought together people from around the world and afforded me the opportunity to connect with many Ann Arbor and Detroit startup entrepreneurs, investors, and supporters who are strengthening the ecosystem. The startup growth in Michigan has given the entire region palpable momentum and energy. What’s so special about Michigan’s startups isn’t merely its energy, though. Heavily fueled by its decades of cybersecurity software expertise and success — and boasting world-class unicorn companies that span consumer marketplaces, enterprise software, and automotive innovation — Michigan’s ecosystem has evolved in a way that bodes extremely well for the region’s economy, community, and entrepreneurs alike.

The first Michigan unicorn in recent history was Ann Arbor-based cybersecurity startup Duo Security, which claimed the status in 2017. Acquired by Cisco last year for $2.35 billion, Duo is the latest in a long line of successful enterprise cybersecurity startups, whose research and development in Ann Arbor dates back to 1966, when the University of Michigan founded Merit Network, the nation’s longest-running computer network. While they weren’t all unicorns, cybersecurity startup success stories in the city also include Arbor Networks (acquired by NETSCOUT), Deepfield Networks (acquired by Nokia), and up-and-comer Censys (which has already received coastal capital).

Meanwhile, Detroit has become a rising force in consumer brand startups. For example, Michigan’s newest unicorn, sneaker exchange StockX, and the established luxury goods manufacturer Shinola both call Detroit home. The city houses many other direct-to-consumer startups as well, though, including modular but long-lasting furniture maker Floyd, indoor houseplant brand Bloomscape, and curly hair product line Naturalicious. All three of these startups have received funding since 2018, including from coastal investors.

One industry we aren’t surprised to see growing in the nation’s motor capital is, of course, mobility. With deep roots and unique expertise in the automotive industry, Michigan does not just see innovation with electric vehicles like Rivian (one of the unicorns I mentioned above); Ann Arbor-based autonomous vehicle startup May Mobility has gained considerable traction as well. Founded in 2017, May Mobility closed a $22 million Series A round in February of this year. The company has already deployed vehicles in Detroit and Columbus and is using its latest round of funding to expand to other cities. Finally, just last week Ann Arbor-based autonomous delivery robot startup Refraction came out of stealth mode at TechCrunch’s Mobility Session (and did so with venture backing).

Ironically, although entrepreneurship continues to grow in the Ann Arbor-Detroit corridor, one of the key challenges that the region faces is indeed mobility-related. There are extremely limited public transit options between the two cities, which means that one must drive a car between them in order to connect. The ecosystem would arguably see greater collaboration and increased density of resources — which are both critical for scaling — if it were possible for the region’s talent to connect through other mass transit options. Moreover, in a city with the highest car insurance rates in the country, Detroit alone would certainly benefit if startup talent could live there without needing to own a car. This is a key issue that the region will have to solve in order to continue growing successfully.

As an outsider looking in, I see a unique opportunity for Michigan to accelerate its path to ongoing success by uniting the community and building an even more intentional innovation corridor between Ann Arbor and Detroit. By building more collaborative structures across its wide swath of expertise and experience, the state could transform the workforce with new skills, attract investors, and thoughtfully plan to improve life for all citizens — not just those involved in technology.

Organizations in the region are already working hard on helping people transition careers, such as Grand Circus, which helps people transition into tech without going back to college, and Build Institute, which has helped over 1,700 entrepreneurs launch startups (often direct-to-consumer) in the Detroit region. Further collaboration, however, across these cities’ respective non-profits, politicians, investors, and entrepreneurs alike could help the region accelerate its growth path not just in a single vertical or area of expertise but as a broader community.

While the state is not without its challenges, Michigan sees a lot of strong momentum and has the trappings to be a diverse startup powerhouse. This is good news not only for Michiganders but for the broader Midwest ecosystem as well. Helping to rescue the region from its “rust belt” moniker, Michigan is proving that innovation is strong in the Midwest. With further collaboration across cities and industries, Michigan has the opportunity to create a diverse economy that’s poised for greater resilience during times of economic compression. This strength and synergy across Midwestern cities and states will be key as we continue to rise alongside our coastal counterparts.

Originally featured in Forbes.

Source: https://hydeparkangels.com/why-michigan-could-become-a-startup-powerhouse/#utm_source=rss&utm_medium=rss&utm_campaign=why-michigan-could-become-a-startup-powerhouse

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” The Leapfunder Note is a sensible and attractive way to place capital in start-ups in the Netherlands “

” Diversification is important in angel investing. Leapfunder is a platform that allows angels to spread their investments. “

” Leapfunder investing allows you to become actively involved in a start-up, just as in classical angel investing, while taking all the hassle out of transaction execution “

” Leapfunder is ideal for investing smaller amounts in a start-up in the very early stages. Such investments can be a powerful addition to a portfolio “

” With Leapfunder you get a great opportunity to build up a diversified portfolio of start-up investments, often investors can play an active role in developing the company “

” When I saw the Leapfunder proposition I thought straight-away: this is what start-ups need. I am an entrepreneur and wish this system had been available when I started my company. “

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Pieter ter Kuile

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Wouter Kneepkens

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Ronald Bazuin

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Eric van der Maten

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Eric van Gilst

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Donald Res

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Source: https://www.leapfunder.com/companies/165

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Liquid Alternatives: Watch Out For These “Potholes” (Goldman Sachs)

Theodore Enders, Global Head of Goldman Sachs Asset Management (GSAM) Strategic Advisory Solutions, says that investors are sometimes disillusioned with their investments in alternatives. However, on closer analysis, it turns out that poor implementation choices within portfolios are more often the problem rather than flawed strategies.

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Liquid Alternatives: Watch Out For These “Potholes” (Goldman Sachs)

https://platodata.net/wp-content/uploads/2020/10/liquid-alternatives-watch-out-for-these-potholes-goldman-sachs.jpg

An incisive note from Goldman Sachs Asset Management details the three pitfalls in daily liquid alts investing.

Theodore Enders, Global Head of Goldman Sachs Asset Management (GSAM) Strategic Advisory Solutions, says that investors are sometimes disillusioned with their investments in alternatives. However, on closer analysis, it turns out that poor implementation choices within portfolios are more often the problem rather than flawed strategies. (GSAM)

GSAM used the equity market drawdown triggered by the coronavirus endemic in early 2020 as a case study.

Three common implementation pitfalls

 

·        Defining the term “alternative”

GSAM defines daily liquid alternatives (DLAs) more rigidly compared with Morningstar. In the opinion of GSAM, DLAs are similar to hedge funds because they reduce portfolio risk, better manage equity drawdowns, and provide differentiated returns from both equities and fixed-income. Several funds considered as alternatives by Morningstar do not fall within the ambit of this definition.

“During the Coronacrisis drawdown, the Morningstar funds that we exclude from our stricter definition exhibited sharp performance disparity—with nearly a quarter having deeper drawdowns than the S&P 500 (-34%),” writes Enders. “Investors owning these funds and expecting better performance were likely dismayed by the outcome.”

·        Lacking strategy diversification

Investors tend to crowd into the equity long/short strategy. However, there are other DLA strategies available such as tactical trading, relative value, and event-driven.

The problem with excessive use of the equity long/short strategy is that these funds also have the highest beta to equities.

“Therefore, they may disappoint exactly when investors hope to realize the benefits of alternatives,” says Enders. “During the Coronacrisis drawdown, the median Equity Long/Short fund fell -22%, double that of all other alternative funds.”

GSAM recommends the use of a multi-strategy approach.

·        Excessive manager concentration

The third pitfall identified by GSAM is the use by investors of only one or two managers. GSM points out that though the median DLA outperformed US large blend funds during the corona crisis, the range of outcomes was nearly 3 times as wide. This shows the greater potential of return dispersion across managers.

“If an alternatives sleeve was comprised of only one or two managers, investors were likely frustrated if those managers were at the bottom end of that range.”

GSAM’s recommendation: Use multi-manager strategies or hedge fund replication strategies.

Related Story:  Retail Investors Can Use Alternative ETFs To Their Advantage

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Source: https://dailyalts.com/liquid-alternatives-watch-out-for-these-potholes-goldman-sachs/

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Supernode Global rebrands with £28m fund for mediatech start-ups

Originally written by Timothy Adler on Growth Business

Supernode Global has rebranded with its £28m venture capital fund for media technology start-ups. The rebranded VC brings together Rooks Nest Ventures and media networking community Supernode in what CEO Michael Sackler believes will give media tech start-ups access to capital, while giving investors a route to the most exciting start-ups. Merging both sides of

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 Michael Sackler, CEO of Supernode Global

Evangelical: Michael Sackler believes venture capital has underserved or even ignored media start-ups

Supernode Global has rebranded with its £28m venture capital fund for media technology start-ups.

The rebranded VC brings together Rooks Nest Ventures and media networking community Supernode in what CEO Michael Sackler believes will give media tech start-ups access to capital, while giving investors a route to the most exciting start-ups. Merging both sides of his business will create a holistic platform.

To date, the old VC side, Rooks Nest Ventures, has made 14 early stage seed investments with an average investment of £400,000.

“We’ve done a little bit more and a little bit less,” said Sackler.

Supernode Global will invest in eight companies per year.

>See also: Draper Esprit raises £110m to invest in tech companies in just three days

Portfolio companies Sackler is particularly excited about include home workout app Fiit, which is in a Series B funding round; Rap Tech Studios, a rap app development company and social media platform for hip-hop fans; and Good Human, a searchable platform for sustainable brands, pitched as a cross between Amazon and Pinterest.

Supernode Global focuses on media infrastructure, both either consumer-facing user-generated-content platforms such as Rap Tech or the under-the-bonnet technology which powers those platforms.

“Any companies that are creating the picks and shovels of the media industry,” said Sackler.

He highlights mobile 3D games engine Unity, which sits under the hood of many of today’s popular games, as the kind of business he would like to invest in.

>See also: Over 1,000 tech start-ups have gone bust since lockdown

Sackler is evangelical about the potential of media technology, arguing the sector has been underserved or even ignored by most venture capitalists.

“These companies that are starting up now are going to have a huge influence on how individuals view the world and possibly even the way society even operates. It’s undervalued and possibly even ignored. You’re consuming media all day every day on these platforms,” he said.

Having founded Rooks Nest Ventures in 2017, the former film producer and angel investor began thinking about creating a global community for mediatech startups and investors last year.

Sackler said: “We thought, let’s focus on building a community which focuses on early stage media technology start-ups where they will get access to the best minds in the business. We didn’t want it to be just a top-of-the-funnel marketing exercise for us. We want to provide every resource we can for start-ups in this space, including venture capital.”

To date, Supernode is creeping up towards 1,000 handpicked members. Although membership is open to all – something which Sackler feels is important for diversity – those members are vetted before joining.

Sackler, a scion of the philanthropic Sackler family, believes that Supernode Global can act as a flywheel, accelerating the development of mediatech.

Sackler said: “We can provide access to a whole range of different services, whether it’s access to capital or talent, partners, workshops, peer-to-peer education, offering both access to start-ups and deal flow for investors.”

Further reading

25 of the most exciting fast growing technology companies in the UK

Source: http://s17026.pcdn.co/supernode-global-rebrands-with-28m-fund-for-mediatech-start-ups-2558200/

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