On the surface, Beringea's investment in the Detroit Institute of Music Education can be head scratching.
The Farmington Hills-based venture capital firm is Michigan’s largest, specializing in the later stages of investment. VCs are known for investing in startups with scalable technology that can lead to big exits. The Detroit Institute of Music Education doesn’t exactly fit that stereotype.
The music college for contemporary musicians is launching its U.S. operations from one of Bedrock Real Estate Services
buildings in downtown Detroit this fall. The company will offer lessons in playing instrument and musical entrepreneurship. To Beringea's brass, the market for that sort of education is so underserved it makes sinking $3 million into the business an easy choice.
"It's really more about the size of the market that exists and whether it's being served or not," says Charlie Rothstein, founder & senior managing director of Beringea
Beringea's employees first came into contact with the co-founders behind Detroit Institute of Music Education, commonly known as DIME, through its London office. Sarah Clayman, Bruce Dickinson and Kevin Nixon launched Brighton Institute of Modern Music
in Brighton, England, in 2001. They sold the business in 2010 and were recruited by Rothstein and his colleagues at Beringea to open a U.S. version in Detroit.
The trio considered other major cities but were wowed by Detroit. A combination of the Motor City’s musical heritage, buzz about the city’s forward momentum, and hospitality from its business leaders like Rothstein and Quicken Loans Chairman Dan Gilbert made it an easy decision.
"There wasn't a city that extended this sort of hospitality to them," Rothstein says.
The Detroit Institute of Music Education will open its doors to a projected 150 students in September. It will occupy 15,000 square feet in downtown, which Rothstein expects will be able to support up to 1,000 students one day. The company is currently looking to hire 20-30 instructors and support staff for the firm.
Source: Charlie Rothstein, founder & senior managing director of Beringea
Writer: Jon Zemke