This is part of a series called Postcards, where we share lessons from places outside of Technical.ly’s core markets. Email editor-in-chief Zack Seward at zack@technical.ly if you’re interested in contributing.

When you think “Michigan,” what comes to mind?

Cars are certainly near the top of that list, but the Wolverine State can no longer be defined merely by its leadership in the auto industry. Featuring one of the most diverse economies in America, Michigan is becoming an increasingly popular place to launch high-tech, high-growth companies — in the life sciences, agriculture and advanced applied materials.

With entrepreneurial activity on the rise, Michigan has made strides in designing programs to cultivate each level of the startup ecosystem. Fostering a strong entrepreneurial ecosystem in the state has been a result of many things. Among them:

• Programs designed to support researchers developing new technologies at top research universities across the state
• Resources providing entrepreneurs with business services and operational support
• Organizations, such as the Michigan Venture Capital Association (MVCA), dedicated to growing and sustaining a vibrant and resilient venture and angel investment community

To fertilize high-tech collaboration across the state, the Michigan Translational Research and Commercialization (MTRAC) program — originated to accelerate technologies out of the university lab and into the commercial market — has been expanded to four statewide innovation hubs managed and administered by the Michigan Economic Development Corporation (MEDC), Michigan State University, the University of Michigan and Michigan Technological University.

To date, the MTRAC program — supporting high-tech companies in advanced applied materials, transportation, biomed, agbio and life sciences — has funded 159 projects, fostered 29 startup companies, created 100 jobs, 22 licenses with industry and secured $130 million in follow-on funding.

As we continue to see a rise in spinouts from university technologies, and as regional economic development groups continue to spur entrepreneurial growth, the need for venture- and angel-capital support grows.

To that end, the MVCA recently released its 2018 MVCA Research Report to summarize and analyze the activity of Michigan’s entrepreneurial and investment community.

Here are three key takeaways related to investment in Michigan’s entrepreneurial and investment community:

1. Michigan’s startup ranks are growing

The report identified 134 active venture-backed startups in Michigan in 2017, which is a 26 percent increase over the last five years.

Additionally, 68 startups received $179 million in funding from venture capital and angel investors, a 100 percent increase over the last five years, and 37 startups received funding from university and economic development-related funds.

Finally, there are 87 venture capital professionals in Michigan, a 23 percent increase in the previous five years, and 797 angel investors in Michigan, a 229 percent increase over the last five years.

What does this mean? Not only is the state seeing significant gains in high-tech innovation demonstrated by the rise in the number of entrepreneurs and startups, but this is also evidenced by the increases in the number of VC professionals and the amount of support they provide.

2. Michigan entrepreneurial activity is attracting out-of-state support at an exponential rate

Every $1 invested in a Michigan startup by a Michigan-based venture capital firm attracts $3.83 of investment from outside of Michigan. Furthermore, 472 out-of-state venture firms have invested in Michigan-based startups, a 376 percent increase over the last five years.

These data points are crucial. They show: Michigan is home to a growing number of great companies; in-state VCs are having success in the companies they support; and connections and networks are strong in securing out-of-state firms to invest in Michigan companies.

3. There is a need for more capital in Michigan, and that’s a good thing

The report tells us in-state and out-of-state VCs have $403 million for follow-on funding and there is an estimated $627 million needed to support growth. This “capital-gap” further demonstrates the upward trend of Michigan’s vibrant venture capital and entrepreneurial communities. The increases seen in the number of startups across the state, and the number of VC professionals working in Michigan, signifies the ecosystem is thriving and maturing, but to keep up with the rise of entrepreneurial activity, additional funds are needed for all stages of growth.