MACKINAC ISLAND -- Skeptics have suggested that the effort to create a start-up ecosystem in downtown Detroit, led by Detroit Venture Partners, is the result of wealthy backers (read: billionaire Quicken Loans founder and Chairman Dan Gilbert) having money to burn on top of money to burn.

The investors in the nascent companies in DVP's portfolio bank on a slim success rate for their return-on-investment, one skeptic suggested at TechWeek Detroit, then cash out when a company emerges as viable enterprise poised for growth. According to research from the Harvard Business School, cited by the Wall Street journal, three out of four start-ups fail.

But Josh Linkner, CEO and managing director of DVP, has some numbers of his own.

“We did the math just on Detroit Ventures Partners - there’s obviously so much more going on beyond our little thing – but just on Detroit Venture Partners, and if we invest at the same pace that we’re doing today over a 10-year period, and assuming we just have average, center-of-the-bell-curve returns, we’re not doing especially good, not especially bad, just average Silicon Valley returns, when you add that up, it’s pretty profound over a 10-year period,” he said. “We’ll end up creating over 6,500 high-paying jobs in the city of Detroit, it means we’re going to create over $1 billion year of economic revenue inside the city, and fill 1 million square feet of office space. And we’re one little venture firm.”

“Little” may be relative for DVP, at least compared with the same time last year. Then, DVP’s companies were concentrated in downtown Detroit’s Madison Building.

Now, DVP and its related companies are in four buildings in an area now known as the Madison Block.

The Madison Block is the city block bordered by Woodward Avenue on the west, Broadway on the east, Witherell on the north, and John R. on the south. It’s a partnership between DVP, Grand Circus, Bedrock Real Estate Services and Bizdom.

In the buildings on that block, there is Grand Circus, the new technology training institute launched in the Broderick Tower last August. There is also Bizdom, the start-up incubator at 1528 Woodward. Sasche Construction, which built office space on the block, is also at 1528 Woodward. Detroit Labs, which began in Madison Building but expanded beyond its space there, now occupies the fifth and sixth floors of the building at 1520 Woodward. Avalon Films/Hudson Editorial is at 1500 Woodward.

It is on that block that Linkner, Gilbert and others have been busily trying to establish Detroit's own technology ecosystem, with entrepreneurs and their ideas feeding off each other.



DVP was launched by Linkner, a best-selling author and founder of ePrize (now called HelloWorld), and Gilbert, along with Brian Hermelin in 2010 with the intention of investing in 6-8 companies that year, and another 20 in 2011. There are now 70 companies on the Madison Block, Linkner said Thursday.

Those start-ups have produced 400 jobs, according to Bizdom CEO Ross Sanders.

"There's been just explosive growth, particularly in the past year," Sanders said.

And Linkner said the ecosystem is still far from mature.

"It's not like, 'oh now were done,'" he said. "The momentum in fact is building, so the rate of change is only increasing from here."

David Muller is the business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com or follow him on Twitter