By Katie Vloet
Jake Cohen grew up in the Detroit suburb of West Bloomfield and attended U-M for his undergrad and graduate studies. Still, when he considered job opportunities, he assumed he would have to go to one of the coasts to work in entrepreneurship.
“I had accepted an offer to work in the start-up world in Boston,” says Cohen, ’13. “I didn’t think I could do the kind of work I wanted to do in Detroit.”
Then he heard about a venture capital firm that would invest in early-stage technology companies. And it would be based in Detroit. “When I heard about a position with Detroit Venture Partners (DVP), I knew I couldn’t pass it up. This was a once-in-a-lifetime opportunity.”
DVP was the brainchild of ePrize founder and venture capitalist Josh Linkner, Quicken Loans founder and champion of Detroit revitalization Dan Gilbert, and Rockbridge Growth Equity founder and chairman Brian Hermelin. They thought the region was underserved by venture capital, especially in the funding of tech startups.
Cohen, who had founded eatBlue.com, Ugrub.com, and Ubars.com, crammed in as many half-semester classes as he could in the fall of 2010 so he could begin the job in November of that year, when funding was set to become available. He worked at DVP while finishing up his joint JD/MBA degree, which he received in 2013. Since Cohen joined DVP, it has invested $19 million out of a $60 million fund.
“We have a unique value proposition. We don’t just have money to fund ventures. We are hands-on investors, we bring experience, and we help to build your customer base,” says Cohen, now a partner at DVP. “Our purpose also is very much tied to Detroit. Helping to rebuild the city through entrepreneurship is part of everything we do.”
Several DVP-funded businesses have taken off. App-developer Detroit Labs had four employees when DVP invested, and now has 45. Stik, a reviews website that drives local referrals for professional services, has grown to 25 employees—with more being hired every month—after DVP’s investment. Office- and school-supply website Chalkfly started as two brothers, and now is approaching 20 employees; it was the fastest-growing e-commerce site in the country last year after doing $2.5 million in revenue in its first full year of operations. After companies reach a certain size, they move out of the industrial-chic DVP headquarters in the Madison Building downtown to make room for new startups; Detroit Labs and Stik were two of the first up-and-outs.
When Cohen travels outside of the city, he often gets asked: Why Detroit? Many people associate the city with bankruptcy and not regrowth, he says. “Really, though, the city’s bankruptcy is a trailing indicator. The city has been on the rise at least for the past three years.” Plus, he says, the fact that Detroit presents certain challenges is appealing to someone with his professional drive. “I’m an entrepreneur, so I like the idea of building something from the ground up. That’s inherently exciting to me.”
Even Silicon Valley is paying attention to what is happening in Detroit. For instance, a funny thing happened to the founders of Stik, which moved to Detroit from San Francisco. “We were sitting in a conference room, and a reporter visiting from the San Francisco Chronicle interviewed them,” Cohen says. “Stik had been in San Francisco, but they weren’t interviewed by the San Francisco Chronicle until they moved to Detroit.
“What’s going on here is historic.”