How the Business Accelerator Fund (BAF) Creates Greater Access for Grand Rapids Startups
As a part of its continued work in assisting business growth and long-term economic prosperity for Michiganders, the Michigan Economic Development Corporation (MEDC), in partnership with the Michigan Small Business Development Center (SBDC), created a network of statewide locations where technology-based companies, entrepreneurs and researchers can locate community assets to assist in their endeavors.
These locations, referred to as SmartZones, are networks where the Business Accelerator Fund (BAF) is available. Spartan Innovations, an entity of the Michigan State University Foundation, is the designated Grand Rapids SmartZone operator.
What is the BAF?
The BAF provides funding to a participating Accelerator to help early-stage advanced technology companies based in Michigan to access specialized services to advance their path to commercialization, company success, and economic impact. These services typically require professional assistance that is not generally available through the Accelerators.
BAF requests are reviewed and awarded through a competitive process. Overall, a company may not receive more than $50,000 in BAF services and most have multiple engagements in the $7,000 to $15,000 range.
Who qualifies for the BAF?
Before contacting the nearest participating business accelerator, below are the following qualifications:
Must be technology-focused and early-stage advanced
Must be based in, or have a principal location in Michigan
Must be privately held, for profit and defined as a small business by the Small Business Administration
Must have less than $1M private sector investments and less than $2.5M revenue in last 12 months
Must agree to complete semi-annual BAF economic impact/client satisfaction surveys for five years
Must be compliant with the MEDC and any other state programs
What services do (and don’t) the BAF support?
The BAF funds should be a bridge to a key milestone of some kind that could not otherwise be achieved by the company. These services could include financial modeling, regulatory consulting, patent searches, and legal expenses such as strategic licensing agreements, bringing on key employees, or equity agreements for C-level employees. While the list of available services is comprehensive, there are some that are not supported by BAF. Tasks like bookkeeping, tax preparation, founder salaries, general company expenses or advertising, and other high level internal projects are not among the list of expenses that can be covered.
What is the application process?
After being approved by the Accelerator, business owners fill out a comprehensive proposal to be reviewed by three SmartZone directors across the state for approval. Proposals are at the most five pages in length. They detail the company, how the services will be used and will propel the company to its next milestone. It is not a quick timeframe for entrepreneurs to complete their proposals for submission and go through the review process, which is an important detail to consider when identifying a need and starting an application. While not every applicant receives approval for services, those that do have services paid for on their behalf, rather than receiving the funds and paying out of pocket.
Get in touch!
Not every startup is eligible for this service, but for those that are, the best place to start is to get in contact with a local SmartZone. There are 20 locations across the state and three in the Grand Rapids area. Please see full map here to find a local Business Accelerator.
To get in touch with Spartan Innovations, please contact Janet Wyllie, Director of Gateway Grand Rapids at jwyllie@spartaninnovations.org.