A Venture Update with Jeff Wesley: Accelerators, Investments, and Exits

In this episode, David Washburn talks with Jeff Wesley, Executive Director of Ventures at the MSU Research Foundation, about the rapid growth of venture creation and early-stage investing across Michigan.

Jeff shares updates on the Conquer Accelerator’s 10-year milestone, recent sector-based and regional cohorts, and partnerships with Henry Ford Health, Michigan Virtual, and MSU Federal Credit Union. He discusses how these programs are attracting startups from across the country and helping founders connect with customers, capital, and mentors.

The conversation also explores the Foundation’s growing investment activity, recent exits—including ATLAS Space Operations, FirstIgnite, and TheraB—and what they signal for Michigan’s innovation economy, along with a preview of the PitchMI Championship on April 7 at Grewal Hall.

Host: David Washburn
Guests: Jeff Wesley (Executive Director of Ventures, MSU Research Foundation)
Producers: Jenna McNamara and Doug Snitgen
Music: "Devil on Your Shoulder" by Will Harrison, licensed via Epidemic Sound

Stay connected with the MSU Research Foundation by following us on LinkedIn or subscribing to our email newsletters.

Transcript

Introduction and Guest Overview

David Washburn 0:47

Welcome to the MSU Research Foundation podcast. Today we have a friendly face and a friendly voice on the other end of the line. It's our colleague Jeff Wesley. Jeff is our executive director of Venture Creation and runs all of our captive venture funds. I think we last had a one-on-one sit down with Jeff in August, if I'm not mistaken. And in that last episode with Jeff, we said that we would be doing this on a regular basis. So here we are, six or seven months later, just checking in with Jeff to see sort of what is the latest and greatest in the world of venture creation and venture investing. There's so much activity here. So we have a little time to do a short tour. I thought it'd be fun, Jeff. Um, welcome to get started. Um, but before I do, let me just remind uh you folks out there this is not to be construed as investment or legal advice. These are portfolio companies that we have invested in through our activity at the uh MSU Research Foundation. Uh with that, welcome.

Jeff Wesley 1:53

Yeah, Dave, it's just nice to be back. It's it's amazing. Uh it seems like I was just here. These quarters go so fast. Um, but just excited to share some of the momentum that we're having here at MSU as well as all of our activities with our team around the state of Michigan.

David Washburn 2:09

Well, let's talk about venture creation. Um we have, if I'm not mistaken, um a couple of Conquer cohorts going on. It's our 10th anniversary. Where are we with Conquer in the last six months? Lots of action.

Jeff Wesley 2:24

Yeah, I'd be remiss, but a big shout out. 10 years of Conquer. That's an amazing thing. Um, many accelerator programs come and go, but it's really cool. The investment of the Foundation in the early days in Conquer and the number of companies we've been able to support over 10 years. And to some of the original people like Paul Jakes and Jeff Smith and Tom Stewart and all the people that have put time into this, um, just really cool. Over the last uh quarter, um, a lot of great things have happened. We've completed our Grand Rapids Conquer Accelerator. Uh, kudos to all the team and the companies that were part of that cohort. Very successful. Those teams are now getting ready to go to South by Southwest, getting all geared up for that trip and um making new connections, and we're trying to support them and the efforts around that campaign. Um, we've also got launched our MSU FCU um credit union around fintech and insure tech, which has just been a remarkable partnership working with the credit union. Um so cool that we're attracting companies around the country to come to Michigan and participate in that. Um, we I even have a startup from that originated from MIT in Stanford here in East Lansing, Michigan, um, in our accelerator program. On top of that, we have our Henry Ford Healthcare cohort, number four there. Um, just really neat to see the startups there, a lot of AI-based technologies around healthcare working with Henry Ford. And that partnership is just remarkable to me. Um, and everything that is an opportunity for our startups there. Um, we're just in the first few weeks of that. Every startup that we have as part of the cohort has a champion at Henry Ford that they're already working with on next steps. Um, to have that for a startup at that stage is just incredible. And just kudos to Henry Ford, kudos to the team that's working with our hub there. Um, the traction that they're able to get with this partnership at a very early stage is just truly beneficial.

David Washburn 4:34

So that sounds like at least 15 separate teams going through three separate cohorts, all kind of either started or stopped in the last six or seven months. And um, very much uh two sector-based cohorts, it sounds like um, and Grand Rapids. Uh, did that have a sector focus or was that broader?

Jeff Wesley 4:56

That was broader, that was more agnostic. We also finished our Michigan virtual one, probably in that time period with Michigan Virtual around EdTech. Oh, right. Um, so that's a big shout out there too to that one. Um, so that's 20 companies. Um and then if you look at the period, uh the fourth quarter calendar year of the period, we did about in total with those companies and beyond about 33 investments for the period. We've been averaging about 30 investments per quarter. So um, so the impact of our early stage funds, our team, and the efforts that are putting forth, um, just the opportunity to support that many companies is phenomenal.

David Washburn 5:35

Now I have to ask, you mentioned um South by Southwest, and I attended that a hundred years ago when it used to be just music. Are you are you personally escorting these teams down and and uh uh going to uh uh show them how South by Southwest is?

Jeff Wesley 5:52

You know, I attended South by Southwest a few years ago. Um at this stage, some of our team will be attending. Um and they will be working with these companies to make sure they leverage fully um the time window there to connect with other venture folks, um, to participate with uh Midwest House, um, to get connected with uh the entire Midwest ecosystem, including Michigan. And while we're there, we're gonna be working with the MEDC and others to really support building up Michigan and continuing to share the great story, the momentum here in the state, and hoping to get more people to want to participate in our ecosystem.

David Washburn 6:31

That is a uh a fun and crazy week that requires lots of caffeine and lots of energy. And uh I think I think when you come back from something like that, you usually need a day off just to recuperate.

Jeff Wesley 6:43

So I think you got that right.

Student Engagement and Humphrey Fellows

David Washburn 6:45

Well, good. Anything else on the venture creation side? Obviously, you touched on the partnerships, you talked about Conquer. What about Humphrey Fellows? Do you want to talk about Humphrey Fellows? That I think is interesting.

Venture Education and Real-World Learning

Jeff Wesley 6:58

Yeah, just um some great work going with Spartan Innovations around our pipeline with MSU. We have probably one of the best years going with our uh MSU IP track that comes out of the university and startups we're creating. Um, one of the things we do though is we go through those processes, um, we really want to get back to the university in terms of the young talent and giving them opportunities to participate along with us. And it's always nice to have extra resources, but um, the opportunity to connect with these young people and make a difference and get them associated with our ecosystem, our startups and venture is something that we take a lot of pride in. So if I look back over the recent period here, we're coordinating with Humphrey Fellows, an international program. Um uh we've connected uh, I think at least six people this period that are going to be working with our startups, our team, get hands-on experience. You know, personally, I just love walking in the office. They're actually in today to see um them in our office, participating, wanting to learn, putting the time and effort, and the smiles on their faces from the experience they're gathering and what they're learning is great for them, but it's also just wonderful for us. Um, two other programs that I would say recently that we've been working on is a uh VCIC program as part of Broad. Yep. Um our venture team puts in I don't know how many meetings, six or seven meetings to partner with these young folks to prepare them for that venture competition. Um, it's always rewarding work greeting, working working with FMI, David Hawthorne, and all the people over there at Broad. Um, we got a second place finish, so we're really proud of that. Um uh this competition continues to get tougher. Uh the team did remarkable. Uh, so we take a banner of pride as we uh take uh take that second place finish. Um it's it tied for our highest finish in the last number of years. Um so just really proud of that and really proud of what's coming up with 517 week. And we're working already actively over the last uh quarter here with Student Venture Capital Fund and some of the classes uh in Broad to give them real-world companies to do due diligence on and get the experience to um pick what are the best companies, and we're gonna be making a small investment as part of some of that activity. So just some of the great examples where we go beyond our daily work and just connect with the students and the broader MSU community. And, you know, in life, one of the greatest things you do is coach and mentor people and hopefully we're doing our part to make a difference in that.

David Washburn 9:40

Yeah, and we've been doing that for years, and I think it's a it's a great um, it's great to see, you know, you and I had the president on a couple weeks ago, and we talked about uh the Green and White Council, and he the thing he emphasized was um real world experiences for students, and and these are I think great examples of students who are getting sort of real world experiences in the venture space, um, doing due diligence and and getting a little taste of of what it's like to you know understand an early stage company where there's lots of ambiguity and uh lots of vision and maybe some PowerPoint slides and and what could something become, uh, and and you know, is there a plan and a team together that is an investable um project?

Jeff Wesley 10:28

So it's always nice when I connect with MSU alumni or people come back and they want to learn more about what we're doing and all the things that we have uh touching as part of our activities. And I always hear, boy, I wish I would have had that when I was here. I wish I knew that that was even opportunity. Um I think uh that's that's a pretty cool uh reflection of uh what we're providing them and something that's unique that hopefully goes with them for years to come.

Portfolio Growth and Market Conditions

David Washburn 10:58

Well, so let's let's transition to investments. Um uh as a reminder, we have um we have three families of early stage venture funds, uh Red Cedar Ventures, Michigan Rise, and uh the soon-to-be um active uh MSU Henry Ford Health Fund. Um I guess if two quarters went by, um we've probably done how many investments would you say in the last uh how many companies have we invested in in the last sort of three to six months?

Jeff Wesley 11:29

Yeah, you know, I know we're averaging about 25 to 30 a quarter, so um I would say we're still tracking really well along those lines between some of our pre-seed activity, our Michigan Rise activity, and our Opportunity Fund activity. Um, so I we remain very active. And what is really an interesting dynamic environment right now? Um, you know, for if you go back a year, we are seeing a lot of bridge type activities and and you know, the market was still trying to find its way. Um, we tend to see momentum right now. We see a lot picking up in terms of new rounds. And when you look at the entire MSU and Michigan ecosystem, we're just seeing great startups coming out. It's almost like uh it's it's it's a lot more difficult to find which ones we're gonna invest in because the number of startups is uh building momentum month to month. Um so I think right now we, you know, in total, when you look at our activities, we have uh, you know, over 265 active investments that we're managing. Wow. Um, you know, another area of focus beyond investments is portfolio support. One of the things that have a wonderful team takes a lot of pride in. It's not about a check, it's about how do we support our companies, how do we get them to the next inflection point. Um, so a lot of activities, not only investment, but just supporting the portfolio companies that we have and um trying to make a difference. Um, the other thing that stands out for me is probably the exits. Um you know, we've um, you know, there was a period of time where things were a little bit slow a year or so ago, but I can tell you in the last 12 months, we've had nine exits. Wow. Um, you know, the momentum's continuing. We see more are on the horizon. Um, and that's good because you want to see in venture activity. Um, you know, we you would rather see companies raising capital, exiting, or things that uh are really moving them to commercialization. And so just happy to see that momentum and happy to see some of the examples that have happened for us.

David Washburn 13:35

Anything you can talk about? I know we've made some announcements. Yep.

Jeff Wesley 13:38

Yeah. So I, you know, some recent ones that um stand out to me is I think, you know, in one of the previous, I talked about Atlas uh being purchased last July by York. Yep. Um uh ground software to service type uh entity out of Traverse City, Michigan. You know, that was awesome to see. But recently we saw York go public. And uh I think with their initial public offering, I think the valuation after was about $4.75 billion. So, you know, what's cool about that story, you know, if you go back a number of years as the Foundation looks to have its impact, as you have funds that are dedicated like Michigan Rise, we were fortuitous going through COVID, going through all those things to see the growing sector of space up in the U.P. You know, you have Kal Morris up there, you have Orbian up there, you have Atlas, all part of our portfolio. So we supported that sector, now seeing it come full circle, where that sector is coming up on the radar being purchased by York. Um, and then when you see startups in Michigan um being part of, you know, uh York building out the the golden dome for the defense industry. Yeah. Um, wow, we're we're part of that. We might be a little piece of that, but it's it's pretty cool to see that we were value added along that chain to get those activities going. So that's pretty rewarding to see. Um we said some recent exits, uh First Ignite, uh Chase Bontag, that uh uh, you know, originating our Conquer program years ago, has been uh a great partner of uh the Foundation. Uh, you know, every time we did uh an event up in Traverse City, Chase was there as with us, um, you know, helping us to find new startups and activities. Just I'm just grateful to see him and his team um get purchased by Merritt Holdings recently. Um and in both Atlas and Chase uh and First Ignite stand out to me. These are existing companies, they're just stay existing companies. They're just gonna elevate to new levels. And these are great for the communities, they're great for the states, and they're great to see these inflections happen for these good people and these good companies. So just kudos to Chase and his team. Um uh just think he's been just a great partner of ours, and I'm just grateful to see uh what's happened for him. Another one that, you know, I've hard to believe I've been here eight years. Um some companies are with you for eight years. So TheraB in a nice way was one of the companies, Alexa Jones. I met when I first came. Um, the story, hopefully, we'll tell it someday here soon, now that she's had an exit. Engineering student, um, out of MSU, um uh chose to do a startup, and I think instead of Goldman Sachs in her early days, um, has always committed to woman's health, uh, has a tech a wearable technology to uh help with jaundice for newborns um called Snugglet, has just powered through. If you think about eight years and all the things that have happened on a macro level and her work to bring this to light and reach recently just getting purchased by Natus Sensory, um just kudos to her. So, you know, there's numbers here to talk about, there's economics here to talk about when you look at these startups and the impact they're having on the state of Michigan, and then there's these personal stories that you know you get a lot of psychic income off from. So I I think it's uh just wonderful things happen in Michigan. This is why the efforts of what we do and many do in the ecosystem. I'm I'm just so excited about it. And uh I just hope the state of Michigan and everybody that has uh a commitment to this continues to build on it because I think just we're at a remarkable time in the state if we want to invest more and double down.

David Washburn 17:36

I love all those three stories. I'll let you catch your breath there for a second, but um I sure remember TheraB from from the very early days, and um uh and I'll say that you really hung in there with them and did a lot of that coaching that you referenced earlier, and uh it's so great to see them uh um find an exit and and find a path forward with uh with the new partner. And then obviously, um yeah, the First Ignite story, I love that. Um they're getting combined with Inteum, which is a software tool that I know of, and both of those products fit in well into the sort of um university tech commercialization space. One sort of manages um uh IP at universities, and then the First Ignite product is a way to identify um using a bunch of AI tools that they built, um potential licensees, and it's just a natural fit uh to see those those two products come together. And I know that um many many in the university tech transfer ecosystem are users of both of those tools, and um uh so that's that's exciting and and always fun to watch a company uh go public that we have a small piece of.

Jeff Wesley 18:46

Yeah, and you can go on with those stories. Uh, you know, First Ignite uh MSU Technologies uses their product, and we got them engaged very early on here working at the university. Um, and even when I look at TheraB and some of our great partnerships and collaborations, Henry Ford, she won a Henry Ford Challenge at one point and and received some benefits from that. Um it's just nice to see all the components that we have here from programming to investments to our collaborations. They all make a difference on these startups on their journey to success.

PitchMI Championship and Future Programming

David Washburn 19:20

Well, it's quite a lot every time we talk, and uh hopefully our listeners are are um taking all of this in and um because because this is really I think one of our big missions here at the Foundation is to try to um to activate not only here at Michigan State with our students and our faculty and staff, but you know, through our partnerships with the state and partnerships with Henry Ford, we're we're able to put together um new programs, new funding programs that allows us to sort of leverage the sort of land grant mindset of the university and reach across all the different Smart Zones. Uh that's that's how we get into the space business up north as going through the Smart Zones with our partnership with MEDC. So it's so great to hear. Um I want to wrap up. Um you talked about some of the exits, but I hopefully teed up um partnerships with MEDC. Um to just give us an update on Pitch MI. Um that's an incredible program.

Jeff Wesley 20:21

Yeah, Pitch MI, uh our statewide program that's coming to our first final competition here in April 7th, we're excited about. Um we've already got, I think, registered well over 200 people uh where our four regional partners will come together and uh get an opportunity to win a million dollars. Just so exciting. You know, some recent things that I might highlight. Again, it's been wonderful to take these regional founders and work with them. Uh, two recent things. We had them coordinate with the MVCA and a shout out to Ara Topouzian and all of the people of MVCA that participated in the meetings to provide a little feedback. Just what a benefit for the four regional partners. Secondly, we did some uh full couple days of personal work with them on pitching, on their style, uh, a little improv. Um, we what was nice about that, a few things that I learned is how connected the four of them are, how they've come together to bond as entrepreneurs, and how beyond just the journey of Pitch MI is giving them uh new relationships and uh ways that they can learn from each other. Um, but we also wanted to take a couple days and invest personally in them beyond just their businesses to prepare them for what's ahead short term and long term. So, just some great activities going around these companies and a shout out to all four founders, they're all winners. I'm really excited about uh the event coming up in April and just encourage everybody to sign up. This is going to be really cool. And if you believe in things that are going to be longstanding for the state of Michigan. I hope this goes on for years and years. And I hope everybody comes out and shows their support. So events like this will continue.

David Washburn 22:11

April 7th at Grewal Hall, which is also so that's the Pitch MI Championships. That is also the day of the Innovation Celebration at MSU. And also that is EI week here in Greater Lansing. So that will be a fun and exciting time.

Jeff Wesley 22:30

Yeah, full week of activities. Get to know a lot of startups, get to know the ecosystem, and just encourage you to come out and everybody participate.

David Washburn 22:38

All right. To wrap up on Pitch MI, just a future programming note. We did ask our colleague Pete Martin, who is leading that program, to interview the four finalists of Pitch MI. You will have uh four new episodes to look forward to uh very, very soon. And then we'll have round two of Pitch MI that will probably tee off sometime in the summer, late summer, early fall. Because we're gonna do this all over.

Jeff Wesley 23:06

Yeah, I I don't want to get ahead of ourselves, but we're already into planning for round two of Pitch MI.

David Washburn 23:12

Excellent.

Jeff Wesley 23:13

So for all those startups that have been following it this year, have uh grown a little bit from last time they might have applied, get ready for next year. You'll see announcements coming out about the sectors, the locations, and all the excitement around uh the coming year. But yeah, things are revving up already. So excited about this fall and what's yet to become.

David Washburn 23:36

My guest today has been our friend Jeff Wesley and colleague who leads our venture practice here at the MSU Research Foundation. Uh Jeff, thanks for being here. Maybe maybe May or June we'll talk again.