Detroit Regional Chamber > Racial Justice & Economic Equity > How a Detroit-Based Entrepreneurial Incubator is Changing With the Times

How a Detroit-Based Entrepreneurial Incubator is Changing With the Times

July 20, 2023

Crain’s Detroit Business
July 17, 2023
Jay Davis

Nonprofit, entrepreneurship-focused Venture For America is preparing its current crop of 182 fellows to work and start businesses in a changing landscape.

VFA offers current college students and recent college grads a two-year, paid entrepreneur fellowship that serves to create economic opportunity. Fellows work full-time positions with startups across the country. The nonprofit is committed to ensuring those who have been historically excluded, particularly women and people of color, see themselves as future startup leaders or founders.

The organization is switching gears to focus on compensation and career development more so than ever before, VFA Vice President of Marketing and Communications Keenan Covington said in an email.

Gen Z, Covington said, is much more concerned about long-term career goals than prior generations.

Keenan Covington, Venture for America

Keenan Covington, Venture for America

“Many early-career professionals expect quicker promotions than prior generations,” Covington said. “They expect to be recognized for their efforts within a year, and hope to advance rather quickly. We’re also seeing that mental health resources and wellness support is something that is valued, as well as companies with a social impact focus or lens.”

Flexibility is key, too, according to Covington, as more than 50 percent of VFA fellows search for roles that offer hybrid work options.

“At VFA specifically, we see that our fellows want to work for a company solving an interesting problem where they will learn, grow and develop quickly and have responsibility early in their career. They want to be a part of a community where they will have support and structure.”

Venture For America was started in 2011 by former Democratic presidential candidate Andrew Yang. The company is currently led by CEO Eric Somerville, who joined VFA in 2021.

Headquartered in Detroit, VFA has a staff of 39 employees, with capacity for 43, according to Covington. It has grown to offer programs in 13 cities after starting in five; Current cities hosting VFA fellows include Baltimore, Birmingham, Charlotte, Cleveland, Detroit, Kansas City, Miami, New Orleans, Philadelphia, Pittsburgh, San Antonio, St. Louis, and Tulsa, Oklahoma.

Strong Success Rate

VFA receives financial contributions from national and regional funders, according to Covington. The company’s earned revenue comes by way of placement fees for matching incoming fellows with employer partners — referred to by VFA as company partners.

In 2021, its most recent financial report, VFA revenues topped $6.8 million.

VFA company partners provide fellows with a full salary and benefits over the course of the fellowship. The average salary for the 123 VFA fellows in 2022 was about $55,000, up from a minimum salary of $38,000 in 2019. More than 30 percent of fellows received equity options from company partners. Company partners are required to provide health insurance as part of a benefits package or offer a stipend to secure health care. Around 80 percent of 2022 VFA fellows had full health care benefits, and stipends provided averaged around $350 a month, according to Covington. Some VFA company partners also offer relocation assistance.

The current cohort of 182 VFA fellows is at training camp at Wayne State University now through July 26. The program is funded by support from the Gilbert Family Foundation, the William Davidson Foundation, the Community Foundation for Southeast Michigan and the Michigan Economic Development Corporation.

Local partners include Detroit-based integrated marketing firm 2050 Partners Inc., Ann Arbor-based Advaita Bioinformatics and Detroit-based Athlytic, which was founded in 2021 and brought in about $125,000 last year. It matches college athletes with brands that want to pay them to use their name, image and likeness to promote their company or service.

VFA since 2011 has partnered with more than 950 companies and has a network of more than 1,600 current fellows and alumni around the country and

VFA fellows find success upon completing the program. Nearly 40 percent of VFA alums earn more than $100,000 a year, Covington said. Nearly 30 percent of VFA graduates have started businesses, and fellows have raised more than $960 million in investment capital. That group includes Ann Arbor-based men’s retailer Ash & Erie and Detroit-based doll maker Healthy Roots.

Covington said creating a more inclusive, equitable future for entrepreneurship has replaced job creation as VFA’s central focus. He said job creation is a difficult metric to quantify.

“We’re working to build that inclusive, equitable entrepreneurial ecosystem by supporting the growth of diverse ecosystems across American cities by developing entrepreneurial talent and providing access through programs, networks, and resources,” Covington said.