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Michigan’s startup economy has been on an exciting journey in recent years. In 2024, venture capital (VC) and angel investments didn’t just grow—they evolved. From Ann Arbor’s thriving tech scene to statewide collaborations, Michigan is rapidly emerging as a hub for early-stage innovation.
To continue this progress and future opportunities, we spoke with Mike Flanagan, Vice President of Capital Programs at Ann Arbor SPARK and Managing Director of the Michigan Angel Fund. He shared insights on how Michigan is navigating challenges, building momentum, and creating opportunities for the future.
A Changing Early-Stage Investment Environment
Startups faced notable challenges in 2024. “It’s been the toughest two years for startups in over a decade,” Flanagan shared. Economic challenges meant fewer traditional funding rounds and more “bridge rounds” to help startups hit critical milestones and stay afloat.
Ann Arbor SPARK has been a vital lifeline for Michigan’s startups. Flanagan and his team oversee SPARK Capital, an evergreen fund for Michigan pre-seed startups, and the Michigan Angel Fund, a membership-driven angel investment group now on its fifth fund. Together, they ensure early-stage startups have the capital and support they need.
One thing that makes SPARK stand out is its industry-agnostic approach. They back companies in fields ranging from biotech to advanced manufacturing. “We invest in all kinds of technology-driven startups,” Flanagan explained. “That diversity is key to Michigan’s future—it’s what keeps us innovative and resilient. These investments help create high-paying jobs and strengthen our economy.”
Major Investments in Michigan
Despite challenges, 2024 was full of wins for Michigan startups. Ann Arbor SPARK made 23 investments statewide, powered by a $5 million grant through the Michigan Innovate Capital Fund (MICF). Launched in 2023, MICF has built a coalition of nonprofit venture funds like Invest Detroit Ventures, Michigan Rise, BRCC, and InvestUP, to expand resources for entrepreneurs.
A few standout biotech startups in Michigan from SPARK’s portfolio include:
- M3D Technologies: A University of Michigan spinout, M3D is reshaping cancer treatment with advanced medical imaging technology. Their tools help trace radiation hotspots and improve surgical precision. “M3D’s technology is incredibly advanced, and their growth in such a short time has been remarkable,” Flanagan said. With SPARK’s investment, M3D is ramping up production and moving closer to FDA approval for their groundbreaking surgical detection product.
- CircNova: Founded by U-M alum Crystal Brown, this Ann Arbor-based biotech startup is exploring new territory with circular RNA-based therapeutics. Using AI, CircNova developed a platform to identify RNA structures that could lead to therapies for a range of diseases. “They’re building something truly groundbreaking in biotech,” Flanagan said. “Not only are they developing their own therapies, but they’re creating an AI platform that other companies can use to innovate.”
Other notable achievements include ONL Therapeutics raising $65 million and Voxel51 securing $30 million in funding, both showcasing Michigan’s growing impact in tech and innovation. For more information, visit Ann Arbor SPARK and U-M Innovation Partnerships.
Ann Arbor’s Rise as a Tech Powerhouse
With a strong academic foundation and active community support, Ann Arbor has become a force in the Midwest tech scene. “Ann Arbor is the anchor of Michigan’s tech sector,” Flanagan said. Programs like SPARK’s Entrepreneur Boot Camp are vital to helping founders get their start. Hundreds of companies have attended SPARK’s Entrepreneur Boot Camp over the last 20 years. Some recent graduates include: SkySpecs, Groundspeed, AdAdaptedl, Sniffer Robotics, and PocketNest.
The boot camp offers workshops, mentorship, and guidance to help early-stage startups validate their ideas and build go-to-market strategies. The program culminates in a Boot Camp Celebration, where founders pitch to investors and industry leaders for valuable feedback—and, often, funding.
In 2024, the boot camp ran two cohorts, helping early-stage founders refine their business models. Notable alumni include Tackboard, a B2B manufacturing software solution, and Culturewell, a pathogen-testing startup that’s grown significantly since winning SPARK funding in 2022. Programs like these lay the foundation for long-term success while connecting founders with critical resources and networks.
SPARK also prioritizes job creation through its investments, supporting startups that bring high-paying, tech-driven roles to Michigan. The ripple effect of these efforts strengthens the local economy, sparking growth and fueling the entrepreneurial culture.
Looking Ahead to 2025
Building on 2024’s achievements, 2025 promises continued growth. Ann Arbor SPARK plans to invest in 20 new companies and raise its sixth Michigan Angel Fund to keep supporting early-stage innovation.
One of the most exciting opportunities is the potential passage of the Michigan Innovation Fund, a $60 million initiative designed to strengthen nonprofit venture capital networks across the state. Flanagan said, “If approved, this program will allow us to invest even more and expand our capacity to serve startups, creating a sustainable, evergreen fund to support Michigan’s innovation economy for years to come.”
Image credit: Ann Arbor SPARK
Still, challenges like talent acquisition remain. SPARK is tackling this through its job board and by hosting over 100 events annually, including a2Tech360, a week-long series of meetups and networking sessions that’s become Ann Arbor’s version of SXSW.
Trend Predictions for 2025
Flanagan shared a few trends that could define Michigan’s investment focus next year:
- AI-driven innovation: Startups and investors are increasingly focused on artificial intelligence. SPARK is also exploring how AI can improve its own workflows and expand capacity.
- Collaboration across ecosystems: Michigan’s coalition of nonprofit venture funds is growing, creating more statewide capital for startups.
- Resilience and focus: Investors will prioritize startups with strong leadership and sustainable business models to navigate the shifting economic climate.
New Investments and Growth
With expanding resources and a supportive network, SPARK is set to drive even more growth for Michigan’s economy. “We’re not just investing in companies; we’re building a community,” Flanagan said. “A strong tech sector has a ripple effect—it impacts jobs, education, and quality of life. That’s what keeps us focused on the bigger picture.”
From groundbreaking startups to innovative funding programs, the state is proving to be a place where entrepreneurs can thrive. If 2024 was a year of resilience, 2025 promises to be a year of opportunity. Keep an eye on Michigan—the best is yet to come.
