VC Guru Mendelson on MI’s Entrepreneurial Ecosystem (And Why There’s Hope)
If the turnout at yesterday’s Michigan Growth Capital Symposium is any indication, our fair state is on the upswing. The conference, in its 31st year, had roughly 450 venture capitalists, entrepreneurs, academics, and government officials in attendance. Jason Mendelson, called “the Elvis of innovation” by this very publication, gave the keynote speech titled, “The Velocity of the Midwest Venture Capital Ecosystem: Sleeping Giants or Momentary Blips?”
Mendelson is the managing director and co-founder of the Foundry Group, a Boulder, CO fund that makes investments in early-stage information technology, Internet, and software startups. He grew up in metro Detroit and graduated from the University of Michigan. Upon finishing law school at U-M, he realized he was frustrated with what he saw as Michigan’s prevailing attitude—fostered by the auto industry—that seniority was all that mattered. Nobody seemed to care what the new guy had to say, even if the new guy had a potentially million-dollar idea. So he decamped to Silicon Valley and went on to serve as managing director and general counsel for Mobius Venture Capital.
Mendelson was in Silicon Valley for the first tech bubble, and he was still there, he says, after “the keg ran dry.” He describes Silicon Valley as an ice-hearted entrepreneurial machine, and not one other cities should necessarily seek to replicate. In his description, Silicon Valley is a place so consumed with competition that virtually the only pleasure in life comes from relishing in the setbacks and failures of others. It’s a toxic place that nobody much likes living in, he claims. Not surprisingly, he fled to Boulder in 2006.
Once he and his partners established the Foundry Group, they decided they would need to “level up” Boulder’s entrepreneurial scene by leveraging the University of Colorado, working to attract capital from outside the region, establishing rigorous entrepreneurial mentorship and development programs through the TechStars accelerator, and cultivating a community where collaboration is key. Now, Mendelson says, Boulder, a city of about 100,000 people, is ranked fourth in the nation in terms of new company formations and companies getting funded.
Before setting up shop in Boulder, Mendelson came to Ann Arbor in 2005 as “a VC with a checkbook.” He came ready to invest in the software/IT space, but he found … nothing. Not one company piqued his interest enough to cut a check. He came back … Next Page »