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Originally posted on Detroit Free Press by Tom Walsh, Detroit Free Press Columnist. See original article here.
Endeavor Detroit — part of a global nonprofit fostering high-impact entrepreneurship in 23 nations — entered its liftoff phase last week with the selection of two food-related start-ups as Endeavor companies.
McClure’s, of Detroit, and Algal Scientific of Plymouth, were chosen during a 3-day international selection panel in San Francisco. The two join a global network of more than 700 firms that receive high-level mentorship and support to scale up their companies.
The owners attend a week-long Harvard Business School executive education program later this month, tailored to Endeavor entrepreneurs.
Endeavor was formed in 1997 and launched initially in South America, Africa, Middle East and Asian nations where mentoring support for entrepreneurs was lacking. Endeavor does not directly provide or promise cash infusions — rather, its network offers services to help start-ups grow, create jobs, transform economies and ultimately give back to support future generations of entrepreneurs.
One of the key challenges in Michigan’s economy, especially pronounced in metro Detroit, is a scale-up gap. Endeavor’s research showed that the region’s number of high-growth firms — older than three years with at least 20% annual employment growth over the last three years — had declined by 50% between 2007 and 2012.
Although founded in New York, Endeavor initially focused its efforts outside the U.S. — but later realized that some U.S. cities face challenges similar to those in emerging economies. So Miami became its first U.S. affiliate in 2013, followed by Detroit this year.
Initial backing for Endeavor Detroit came via major donations from foundations in west and southeast Michigan — $500,000 from the Dick and Betsy DeVos Family Foundation in Grand Rapids and $1 million from the New Economy Initiative (NEI) for Southeastern Michigan.
Geoff Horst, CEO, Algal Scientific
(Photo: Algal Scientific)
‘Network for scouting’
Algal was formed in 2009 and has since grown to 23 employees and raised about $10 million in start-up capital. Endeavor will help propel growth in two key ways, said Algal CEO Geoff Horst: access to a big global network of executive mentors and its direct connections to partners and possible customers around the world.
“In just three days last week, I met a woman who’s growing pigs in Serbia and an aquaculture company from Indonesia,” said Horst, who expects more than half of Algal’s sales to come from exports to companies that need safer foods for chickens, pigs, fish and other animals.
McClure’s, founded in 2006 by brothers Bob and Joe McClure, has been growing at 30% to 35% a year, said Bob McClure. “If we’re going to grow at this pace, we’re going to need to attract, acquire and retain great talent,” he added. “We only know what we know — and Endeavor has the network for scouting and recruitment.”
Endeavor doesn’t write checks to finance new members of its fold, but McClure said it has great contacts among traditional lenders, private equity and venture capital that should be helpful in funding McClure’s future growth.
Growth and giving back
Antonio Luck, managing director of Endeavor Detroit, said his office is in discussions with other Michigan firms and hopes to have four to six more ready to participate in upcoming international selection panels in Mexico City in December or Dubai in March. Target companies typically have annual revenue of $2 million to $5 million, and are growing 20% to 30% a year.
Endeavor doesn’t have a bias toward any particular industry and focuses chiefly on two questions: can you grow into a great company? And can you give back, mentor, be an example to others?
The Endeavor Detroit board is chaired by Cindy Pasky, founder and CEO of Strategic Staffing Solutions. Board members include NEI executive director Dave Egner and Nate Lowery, a board member of the Dick and Betsy DeVos Family Foundation.
‘Values and priorities’
Interestingly, the DeVos family connection to Endeavor preceded the group’s contact with Detroit as a possible Endeavor affiliate.
Lowery, a Seattle native who married into the DeVos family, met Endeavor cofounder Linda Rottenberg three years ago at Harvard Business School.
“I knew Endeavor’s message of high-impact entrepreneurship would resonate with the values and priorities of the family,” Lowery told me earlier this year.
As an undergrad at Princeton, Lowery had met his future wife Elissa DeVos, granddaughter of Amway founder Rich DeVos and daughter of former Michigan gubernatorial candidate Dick Devos and his wife Betsy, former chair of the Michigan Republican Party. Lowery is now CEO of his own start-up firm, TM3 Systems in Royal Oak, and a board member of the Dick and Betsy DeVos Family Foundation.
The foundation had already made a donation to Endeavor’s global efforts, but when the Miami affiliate was established in 2013, Lowery immediately thought of Detroit. Grand Rapids didn’t fit the model for an Endeavor site, in terms of population, proximity to research universities or economic need, but Lowery knew the idea of high-impact through entrepreneurship on a community was “deeply deeply ingrained in the DeVos family’s DNA” — so when Detroit and NEI approached Endeavor, the DeVos foundation quickly stepped up to support the effort.
Finding ways to grow more large, job-creating companies is critical to the future of Michigan and it’s largest cities. It’s encouraging to see big corporate and philanthropic names from both East and West stepping up to the challenge.
Contact Tom Walsh: email@example.com, also follow him on Twitter @TomWalsh_freep.
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