Record Eagle
April 25, 2024
The Traverse City area is well-positioned for continued growth in the health technology sector — despite the challenges faced by startup companies in the field.
That was the message from a panel discussion involving local investors and health tech professionals that was part of Northern Michigan Startup Week, a four-day series highlighting the region’s entrepreneurs, innovators, colleges and universities and startup initiatives in the area. The event drew almost 80 area residents Wednesday morning at the Delamar Traverse City hotel.
“There are really innovative companies doing amazing things right here in Traverse City,” said Jim Millar, CEO of Attrex BioTherapuetics Inc., a development stage pharmaceutical company that works on prevention and treatment of drug-resistant infections. Millar moved his company to Traverse City from Madison, Wisconsin two years ago, in part because of investor support from Traverse City-based Boomerang Catapult that’s invested some $30 million in 30 startups in the Grand Traverse region in the past six years.
Millar said the region’s business landscape is fertile ground for health tech startups because of the investment capital that’s available locally, support from Michigan higher academic institutions and local health care centers, and resources to help companies deal with the steep regulatory requirements in the sector, including the Food and Drug Administration.
“There’s really been a strengthening of that ecosystem,” Millar said.
Boomerang Catapult Managing Director Lowell Gruman said the area is “uniquely positioned” to grow health tech startups, which help generate the career opportunities and high-paying jobs that Boomerang is working to attract to the region. Major medical facilities like Munson Healthcare and downstate operations including the University of Michigan Health offer the medical and technology infrastructure that can help health tech startups grow and thrive, he said. The region’s natural attractions and quality of life also make it an excellent draw for startup companies.
“This is a gathering of interests very central to our mission,” Gruman said. “We certainly have an opportunity to play catch-up ball here.”
Matt Okoneski, director of Red Cedar Ventures which is venture fund owned by the Michigan State University Research Foundation, said the complexities of the health tech sector can make it challenging for traditional investors. He said startups need to leverage support resources from other sources including universities and their faculty members, experimental laboratories or “wet labs,” along with business incubators and accelerator programs. He also said it’s important to promote the Traverse City area to existing health tech centers in places like Boston and San Francisco.
Jay Batcha, founder of Traverse City-based Optimal Capital that invests in a variety of business sectors including real estate, software and health care staffing, said there are “tailwinds” behind the health tech sector. But other challenges including rising interest rates, inflation and other national and international economic uncertainties are making some potential investors more cautious. Startup companies will have to work harder to secure investment, tighten their business plans and utilize public-private partnerships when possible, he said.
“You’re going to have to pitch 1,000 times — don’t give up,” Batcha said.
Panelist Amy Rencher, a senior vice-president with the Michigan Economic Development Corp., also outlined the state resources available to support the health tech sector, including the Michigan Translational Research and Commercialization Life Sciences Innovation Hub. MTRAC recently awarded more than $1.8 million for eight biomedical research projects ranging from opioid use disorder to preterm birth. Support from MTRAC has helped launched more than 40 startups in Michigan, and the hub has provided more than $20 million for Michigan-based medical and health-related initiatives over the past decade.
Early stage research and development support is also available through state’s Small Business Development Centers, Rencher said.
The panel discussion was moderated by Jody Trietch, executive director of Northern Michigan Angels which is a Traverse City-based investor group that’s provided nearly $9 million in investment capital around Michigan, about half in the Traverse City area. The panel was among eight events held as part of the local Startup Week. This year’s theme is Rural Health Innovation, highlighting the work of startups, entrepreneurs, universities and students in the field.
Other events included the re-launch of TCNewTech, a local start-up competition based at the City Opera House under the direction of 20Fathoms, a startup crawl tour, a program on area STEM education and other discussion panels focused on the area’s rural health systems.
