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PANDEMIC, FLOOD SHIFT TRAJECTORY OF CENTRAL MICHIGAN UNIVERSITY RESEARCH CORP. AFTER RECORD 2019 - Crain's Detroit by Tom Henderson
June 7, 2020

Crain's Detroit

It was a record year in 2019 for the Central Michigan University Research Corp., and 2020 was certain to be even better — until the pandemic that disrupted everything in America and the world.

The CMURC was created in 2002 to promote collaborations between universities, industry, government and community, with a focus on growing technology-based businesses and jobs. Its headquarters and largest co-working and incubator spaces are in a 30,000-square-foot building on the CMU campus.

Last year, it set three records, serving 562 clients, creating 638 jobs and creating 84 new companies. While the amount of money client companies raised from investors last year wasn't a record, the total of $8.1 million was substantially higher than the $1.5 million it raised in 2018.

With the opening of its third satellite incubator and co-working space in Midland in March, in addition to other offices in Saginaw and Bay City, Erin Strang, the nonprofit's president and CEO, said she was sure her organization would set some records this year.

But COVID-19 more or less brought the kind of networking and outreach that matches CMURC's services and facilities to the needs of would-be entrepreneurs and early stage companies to a standstill. While the four incubator offices remained open to those tenants who had keyfobs, lockdown rules imposed by Gov. Gretchen Whitmer temporarily ended most other activities.

Based on the CMU campus and running the Mt. Pleasant SmartZone, the CMURC is a 501(c)3 with 10 employees. Its chairman is university president Robert Davies. The SmartZone, one of 21 in the state, is a partnership with the Michigan Economic Development Corp.

The CMURC began expanding its SmartZone operations regionally in 2017 when it opened a 5,000-square-foot facility in Bay City, followed by a 10,000-square-foot facility in Saginaw in 2018 and the 8,000-square-foot facility in Midland in March.

No further expansion is planned for now, and Strang hopes to quickly get things back on track now that Whitmer has begun easing many of her lockdown restrictions. "We had a pretty aggressive rollout of these facilities and we're still proving out that the model is a good one," said Strang. "We'll see how things proceed."

CMURC
Basic membership to CMURC co-working spaces start at $150 a month and allow access to shared working space, access to office equipment and meeting rooms.
In May, just after CMU announced it was going to hold in-person classes this fall and things seemed to be getting back to something like normal, the Midland office was threatened by the record floods that hit the city after the failure of the Edenville dam. The Midland office of the CMURC was spared from flooding or water damage.

There was one silver lining to restrictions imposed on the CMURC by Whitmer's orders.

CMURC has what it calls a Percs program. Before COVID-19 hit, entrepreneurs met for a community lunch at each facility every Monday, with an opportunity for one entrepreneur to practice his or her pitch for investments and get feedback. Tuesday was Ideation Day, where an entrepreneur struggling with his or her business plan or in need of marketing help, for example, would get feedback and advice from other tenants. Thursday was Beer 30 at 4:30, where clients and service providers could meet at 4:30 for a beer, glass of wine and networking.

"We had to get creative, so we went to virtual Percs via Zoom," said Strang. Tenants at all four facilities, instead of meeting separately, Zoom together. "It's been a cool way to introduce people in Mt. Pleasant to people in Saginaw or Bay City or Midland. An unintended consequence was building a better sense of community," said Strang.

The co-working offices have varying levels of membership. The basic membership is $150 a month and allows access to one of the co-working spaces and access to office equipment and meeting rooms. Seating space is first-come, first served.

A regional membership allows access to a dedicated space at a location of your choice and access to all facilities for $250 a month.

A private membership, which includes a lockable office, starts at $500 a month and goes up, depending on the number of employees and how much office space is needed.

There is also what is called professional co-working space, where service providers in the community pay $250 a month to be able to use a facility one day a week to offer advice and mentoring to tenants and potentially add them as clients.

Before COVID, day passes were available for $15 a day for those who needed access to equipment and office space from time to time. That is on hold for now.

The CMURC has a free accelerator program for would-be entrepreneurs thinking about trying to form a business. It is free of charge and four are picked to join each month. "We want to get them to their first sale," said Strang. "Get them ready and then gather individual investors to hear them pitch."

The accelerator program is run in three phases. In seven years, 231 entrepreneurs began phase one, 95 moved on to phase two and 49 to phase three, ending up with a total of 52 products or services with sales. Currently, 36 companies are in various phases, with graduates welcome to stay on as paying tenants in co-working spaces until they feel ready to rent large facilities out in the community.

Two recent graduates are Ithaca-based X-Ability LLC, which makes winter apparel for the disabled; and Mt. Pleasant-based Dribble Stick Training LLC, which makes a device that helps teach ball-handling skills to basketball players.

The organization also runs the CMURC Exchange, a proprietary crowdfunding website that allows friends and family to donate to local entrepreneurs. In six years, entrepreneurs have raised more than $98,000.

Currently, the CMURC serves 152 companies. That number includes tenants and entrepreneurs associated with various programs. Of those companies, 113 are service-based or traditional companies and 39 are innovative-product or technology-based companies.

Local companies also work with the CMURC to provide discounted service to SmartZone clients, including Mt. Pleasant-based Blystone & Bailey, CPAs PC; and the Mt. Pleasant-based law firm of GraySky & Associates PLLC

Tony Fox is regional director the Mt. Pleasant-based office of the Small Business Development Center. The SBDC and the CMURC often either work with the same clients or refer would-be clients to each other depending on their need.

"CMURC is a valued resource for early stage firms and aspiring entrepreneurs. I feel their suite of programing nicely compliments our SBDC training and consulting services. I've had a long-standing working relationship with both Erin and Elissa during their time at CMURC," he said. (Elissa refers to Elissa Gagne, the CMURC's operations manager.) "I've always found them to be responsive and diligent in their efforts to serve current, and emerging, needs of early stage small business in Michigan."