DeVos’ Start Garden Aims to Give Grand Rapids a Jolt

5/24/12Follow @XconomyDET

A young member of a prominent Michigan family known for its wealth, its power in political circles, and its philanthropy has launched a new endeavor to try to stoke the flames of entrepreneurship in West Michigan.

The DeVos family looms large in Michigan, particularly in Grand Rapids, the second-largest city in the state. They are billionaires thanks to the Amway Corporation, which Richard DeVos co-founded in 1959. They give a lot of money back to their community—the DeVos name is stamped on quite a few buildings in West Michigan—and the family is also deeply involved in politics. Dick DeVos, Richard’s son, ran unsuccessfully for governor of Michigan in 2006, and Richard, Dick, and Dick’s wife Betsy are considered on par with the Koch brothers in terms of their influence in conservative politics.

Though 30-year-old Rick DeVos shares some of his father Dick’s physical features, he has chosen a different philanthropic path. Instead of funneling money to the American Enterprise Institute or Focus on the Family, he has chosen put his cash behind efforts to build entrepreneurship and civic participation in West Michigan. His official biography for ArtPrize, which he launched in 2009, says that he wants to “focus on endeavors that create, expand, or enlighten conversation.” ArtPrize has certainly done that. Last year, it drew competitors and spectators from all over the world—more than 300,000 of them. The $1.4 million in prizes helps, but so does the uniqueness of the event: Any artist in the world is invited to compete, any property owner in Grand Rapids can offer its space as a venue to host artwork, and crowds of people walk around the city over a period of several days voting on which pieces they like best. Rick DeVos is fond of calling it a social experiment, but it’s on its way to becoming one of the most popular annual events in Michigan.

Last month, Rick DeVos launched Start Garden, a $15 million seed fund. What makes it different from other funds is that Start Garden invests in increments. Every week, the fund invests $5,000 in two ideas for potential companies: one picked by Start Garden and one selected through a public vote. (Anyone with a Facebook account can vote for five ideas per week.) “Five thousand dollars is enough to validate something,” DeVos says. “I want to invest in people who can provide something to validate.”

Those who are granted $5,000 must come back to Grand Rapids within two months to update the Start Garden team on their progress and prove, as DeVos puts it, that they’re doing something “interesting.” If the team agrees that the project has merit and is off to a good start, Start Garden invests another $20,000.  From there, the fund watches each project carefully to see if further investment is warranted, which DeVos says is always the goal. Start Garden may choose to invest another $50,000 to $500,000 in exchange for equity and will bring the startup to Grand Rapids so it can leverage some of the city’s resources. “We want to be a catalyst igniting the broader seed community,” DeVos adds. “We look at ourselves as a concierge for startups, but we also have insights and deep connections. The end goal is a massive reduction in friction.”

The idea for Start Garden came from a previous DeVos effort, now on hiatus, called 5×5 Night, which was an open call for business ideas. Each month, 5×5 held an event where a five people had five minutes to present their ideas to a panel of five judges, and the people attending picked the winning idea, which received $5,000 in funding. DeVos says 5×5 Night regularly drew more than 200 people. “It got us interested in micro-level investing,” he adds.

DeVos says that though the startup community in Grand Rapids is growing, it needs initiatives like Start Garden to give it a boost. “We don’t have a very active seed culture here,” he notes. “It’s completely underground. Folks don’t want to talk about it, because it’s embarrassing to talk about  failure.”

He thinks the city’s biggest strengths are the fact that there aren’t layers between companies and decision makers, meaning startups can get things done without jumping through too many hoops.  He also points out that the city is situated between Detroit and Chicago and has a proud heritage of design and furniture making. “We have one of the highest rates of designers per capita in the country,” he says. “We have design-centered manufacturing, so there’s still a lot of capacity to make things here.”

DeVos thinks Grand Rapids’ biggest challenges are its culture, practices, and beliefs. “There’s an overly conservative approach to investing here,” he adds. “People aren’t as interested in the discovery process.” But if anyone can upend that worldview, it seems like a DeVos can. “I see a clear connection between my grandfather’s work with Amway and Start Garden,” he says. “People who own their own businesses have the same spirit. I definitely don’t subscribe to a zero-sum vision. This region is so under invested and under believed in.”

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

By posting a comment, you agree to our terms and conditions.