Innovation & Job News

SkySpecs has taken another top prize in local business plan competition and tens of thousands of dollars more in seed capital with it.

The downtown Ann Arbor-based start-up recently took the top prize worth $50,000 at the Michigan Clean Energy Venture Challenge. It also took third place in the student portion of the Accelerate Michigan Innovation Competition, worth $10,000.

The company, founded by University of Michigan students, is developing unmanned aerial vehicles that use artificial intelligence to gather data in hazardous locations, such as collecting structural data in hard to reach places under bridges.

A2B Bikeshare, another U-M student-led start-up, took second place at the Michigan Clean Energy Venture Challenge. The showing was worth $15,000 in seed capital for the bike-sharing start-up.

The Michigan Clean Energy Venture Challenge is a business plan competition co-founded by the University of Michigan and DTE Energy. The competition, in its fifth year, aims to serve as a springboard for Michigan's college students to launch sustainability-oriented start-ups. This year it attracted participants from a broad range of colleges across the Great Lakes State, including Michigan State University and Western Michigan University.

"We were able to reach across the state," says Amy Klinke, assistant director at the University of Michigan's Center for Entrepreneurship. "We had 70 teams apply this year."

Source: Amy Klinke, assistant director at the University of Michigan's Center for Entrepreneurship
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Keith Porter and Ansgar Strother, students at the University of Michigan's College of Engineering, found a way to take a simple idea (a bike share program) add technology (touch screens) and create a new start-up, A2B Bikeshare.

"Everyone likes the idea of bike sharing but the solutions out there were either too expensive or didn't meet the need," Strother says. "Being computer engineers we decided we could develop something better."

A2B Bikeshare is a 6-month-old start-up that calls TechArb home. Its technology enables communities to independently implement bike sharing programs. The company's technology outfits bicycles with touch screens that outlines how to use the program, swipe a credit or  membership card and go.

The technology, which recently second place prize worth $15,000 at the Michigan Clean Energy Venture Challenge, allows A2B Bikeshare to offer its services at a sharply cheaper price-point compared to other bike-sharing program.

"The whole touchscreen interface isn't found on any other bike-sharing program," Strother says.

A2B Bikeshare currently employs a team of five people and expects to add another 5-8 people this year. It is currently working out the final bugs on a prototype and will launch a pilot program at Google's downtown Ann Arbor office in March.

"We would like to launch our first large-scale system of about 100-200 bikes," Strother says.

Source: Ansgar Strother, co-founder of A2B Bikeshare
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Out-of-state venture capital firm Flagship Ventures is close to signing a lease for a office in downtown Ann Arbor and expects to open its doors later this month.

The Massachusetts-based VC hired a recent graduate from the University of Michigan Ross School of Business to head up the office. Flagship Ventures was one of the investors in Accuri Cytometers, an Ann Arbor-based start-up recently acquired for nearly $300 million, and is looking to duplicate that success with similar investments in the local healthcare arena.

To make that happen it has hired Dr. Michael Johnson, a recent MBA graduate from U-M and fellow at the university's Medical Innovation Center. He helped co-found Converge Medical Technologies last year and has worked extensively with venture capital at the Ross School of Business.

"I had the background in what they wanted to do and I was on the ground here," Dr. Johnson says. "I had already worked at the Wolverine Venture Fund. It was a great fit a lot of reasons."

Flagship Ventures has received investments from the Venture Michigan Fund II and the Renaissance Venture Capital Fund. It has an active investment in Tangent Medical Technologies and is looking to make more investments in local start-ups this year. Dr. Johnson points out that Flagship Ventures specializes in early stage investments but is also open to later-stage investments.

Source: Dr. Michael Johnson, head of Ann Arbor office for Flagship Ventures
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Merck is re-upping with Lycera, forming a second strategic partnership with the Ann Arbor-based biopharmaceutical startup that could bring the total investment between the two firms of nearly $600 million.

Lycera is working to develop new autoimmune disease drugs that will help treat things like rheumatoid arthritis. It landed its first strategic partnership with Merck (worth $295 million in research investment) in 2011, which focused on therapies targeting the retinoic acid related orphan receptor.

The second partnership, announced this week, is distinct from the first partnership deal because the firms will spend up to $300 million to discover, develop and commercialize small-molecule therapies directed to selected novel targets being investigated for the treatment of a broad range of immune-mediated disorders.

"The validates Lycera as the partner of choice," says Kathleen Metters, president & CEO of Lycera. "It was built on a very successful first collaboration (between Lycera and Merck)."

Lycera is based in the North Campus Research Complex at the University of Michigan (formerly Pfizer's Ann Arbor campus) where it has a staff of 22 employees and a handful of interns. It has hired three people over the last year, including a chemistry project manager. These hires are strategic and often represent people relocating to Ann Arbor. Metters expects to continue making those sorts of strategic, high-end hires throughout this year.

Lycera is also looking to continue its research into its proprietary products, which are independent from its partnerships with Merck, and develop new technologies in the autoimmune disease sector.

"This is a very important area to continue investment in," Metters says.

Source: Kathleen Metters, president & CEO of Lycera
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Kalyspo, a bio-tech start-up, has won Ann Arbor SPARK's 21st Entrepreneur Boot Camp's Best of Boot Camp award with its new surgery-tool-tracking technology.

"The whole experience was very, very positive," says Dr. Theodore Marentis, co-founder of Kalyspo. "It got us from building the product point of view to building the business point of view."

The downtown Ann Arbor-based startup is developing technology that prevents foreign objects, such as surgical tools, from being left in patients during surgery. The technology employs a micro machined tag that improves the visibility of objects on x-rays and computer software that detects the tag, as well as untagged objects such as needles.

Kalyspo spun out of the University of Michigan four months ago and currently has a team of four people working on it. The team hopes to strike a strategic partnership with a major surgical sponge maker this year. It also expects to bring its product to market this year.

Source: Dr. Theodore Marentis, co-founder of Kalyspo
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Tissue Regeneration Systems is close to announcing its Series B round of fundraising, an infusion of seed capital that is expected to be worth between $2 million and $2.5 million.

The nearly 5-year-old medical device start-up is commercializing a skeletal reconstruction and bone regeneration technology. The University of Michigan spin-out is going for initial FDA approvals for its technologies and hopes to score those approvals within the next year. It also has scored a $1 million grant from the National Institute of Health.

"We believe that achieving these objectives puts the company in position to raise larger amounts of capital," says Jim Fitzsimmons, president & CEO of Tissue Regeneration Systems. To really build the company we need to raise sufficient capital."

The company is predominantly a virtually based firm but has offices in both Ann Arbor and Seattle. It has a team of five employees and the occasional intern. Three members of its team are based in Ann Arbor.

Source: Jim Fitzsimmons, president & CEO of Tissue Regeneration Systems
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

CareCheq is a start-up with one of the most valuable of commodities, paying customers.

The 1-year-old firm is creating technology that offers clear and efficient channels of communication people taking care of elderly patients. It allows users to create profiles and groups that can be edited and made private. Stepaniak points out that things like Facebook aren't exactly compliant with health-care regulations.

"We made a lot of progress," says Dennis Stepaniak, CFO of CareCheq. "There is a long ways to go but we are much better with the platform."

CareCheq currently has six employees which are handling the demands and needs for a handful of customers (he declined to name them). The start-up is building out its platform to fit the needs of these initial customers with the hope it will lead to many more within the next year.

"The biggest potential play we have is to get in with bigger players and license the product to them," Stepaniak says. "That's what our first three customers have been all about."

Source: Dennis Stepaniak, CFO of CareCheq
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Beringea, along with Credit Suisse, is launching the second investment fund for Michigan Growth Capital Partners.

Michigan Growth Capital Partners II is a $180 million fund focused on providing investment capital for start-ups based in the Great Lakes State. The fund, which is expected to be deployed over the next 4-5 years, looks to focus on companies in the following sectors: advanced materials and manufacturing, health care and life sciences, media and communications, specialized consumer goods, homeland security, IT and clean technology.

"There has been a tremendous increase in the level of innovation that has been taking place across the state," says Charlie Rothstein, founder & senior managing director of Farmington Hills-based Beringea.

Ann Arbor-based firms have been the beneficiary of a significant chunk of change in the first fund, which was launched in 2008. Some of the local big names include ReCellular (the largest cell phone recycler in the U.S.) and Sakti3, a University of Michigan spin-out working on battery-storage technology for electric vehicles. Both are based in Ann Arbor.

The biggest prize is Accuri Cytometers, an Ann Arbor-based bio-tech start-up that was recently acquired for nearly $300 million. There is no guarantee any of the money from the second fund will end up with any Ann Arbor-are start-ups this time around. But considering the robustness of the venture capital industry and the entrepreneurial ecosystem in Washtenaw County it looks like there is amply opportunity for a significant amount of the the $180 million in the Michigan Growth Capital Partners II to land in Ann Arbor.

Source: Charlie Rothstein, founder & senior managing director of Beringea
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Local Orbit is ramping up its hiring in preparation for a significant growth spurt this summer.

The downtown Ann Arbor-based local-food-ecosystem-software start-up has hired five people, expanding its staff to seven employees and two interns. "We have more than tripled out team, which is great," says Erika Block, founder & CEO of Local Orbit.

Local Orbit's technology helps connect restaurants and institutions with local producers in their local food ecosystem. Think Eastern Market in Detroit and how it's center of a local food universe. The software platform provides a flexible, customizable suite of business tools that helps everything from farmer's markets to food co-ops streamline ordering, transaction processing, inventory management, logistics, integrated marketing and business analytics. It works for everything from fresh produce to craft food to local artwork.

"It's anything that people are producing or selling locally," Block says.

Local Orbit is currently being used in eight local food ecosystems in Michigan, Washington, New Mexico and Pennsylvania. It recently received an investment from the Michigan Pre-Seed Capital Fund and hopes to leverage that seed capital to grow into 20 new markets in the coming months and 80 within the next year.

"We're ramping up for a big spoke in users in the next six months," Block says.

Source: Erika Block, founder & CEO of Local Orbit
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Monarch Antenna is off to a fast start in 2013, winning the top prize at the Great Lakes Entrepreneur's Quest's ACE business plan competition last week.

The Ann Arbor-based start-up took home first place in the Emerging Company category and $5,000 in seed capital with it. The company is developing next-generation antenna technology and was able to translate the science behind the new technology into why its a promising investment.

"We have been carving out mind space with the industry players," says Randy Dence, CEO of Monarch Antenna. "We need working capital and working engineers right now."

The 5-year-old company was spun out of Michigan State University. The technology alters the electronic properties of an antenna so it can maximize signal quality. It started out in 2007 with grant money from NASA and the U.S. military to create its first applications for a space suit belt and a flak vest. Today it's working toward creating revenue through producing the antenna technology in medical devices, military applications and smart phones. It counts Automation Alley as one of its early investors.

Monarch Antenna currently employs four people and the occasional intern. The company is working on building prototypes of the technology, raising seed capital and looking for strategic investors. Dence has been focusing on product development and clarifying the message about its potential.

"My goal is to be mentioned in the top two or three companies in the tunable antenna space," Dence says.

Source: Randy Dence, CEO of Monarch Antenna
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Pharma Form Solutions sees a need in the pharmaceutical industry (contract research) and is making headway to meet it in Ann Arbor.

The less-than-1-year-old company was launched by a couple of locals who have more than 50 years of experience in the pharmaceutical industry. They saw that companies in that sector, both big and small, are looking to outsource some of their lab research work instead of shouldering the costs of maintaining their own research facilities.

"There is a tremendous need for this sort of discovery work done in the pharma industry," Barry Paxton, CEO & co-founder Pharma Form Solutions.

Pharma Form Solutions provides contract research services and offers high quality solid-state screening services, process development, and a generation of intellectual property associated with physical forms of research compounds.

The company recently won the "Most Committed to the Business Model Canvas Process Award" award at Ann Arbor SPARK's most recent Entrepreneur Boot Camp. Paxton points out the boot camp experience help his three-person firm see that it has both opportunities to get work from both big pharmaceutical companies and smaller pharma start-ups.

"The best way we found to penetrate the market is to do work with these small pharmaceutical companies," Paxton says. "It's a more direct path to get into a profitable business."

Source: Barry Paxton, CEO & co-founder Pharma Form Solutions
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

A couple of tech entrepreneurs in Ann Arbor have teamed up to create Spork, a mobile app start-up who's first offering is starting to gain traction.

Spork release LeaseCrunch about a year ago with little fanfare and even less marketing. The mileage-monitoring app for leased cars has enjoyed a slowly growing following since. It has about 400 users and is still being actively bought in the iTunes store. Jordan Brown and Ross Johnson, Eastern Michigan University grads and Spork's co-founders, plan to ramp up the visibility through viral marketing this year.

"It has done a lot better than I expected without advertising," Brown says. "People are just sort of stumbling upon it."

LeaseCrunch helps drivers keep track of their leased vehicle's mileage to prevent overage charges. Through a few simple setup questions and periodic odometer mileage updates, the application calculates where the user stands in the life of their lease and projects where they will be when it's time to turn the vehicle in.

"I wanted something with a graphical representation and projections instead of just a do-it-yourself spreadsheet thing," Brown says.

Source: Jordan Brown, co-founder of Spork
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Trilogy Health Ventures has only been doing business for the last 18 months but the company has bought two existing firms, started another one and is looking at spinning out technology from the University of Michigan.

The Ann Arbor-based firm has launched Pharma Form Solutions (a contract pharmaceutical research firm) and bought two home health-care firms. It's also speaking with the University of Michigan's Office of Technology Transfer about spinning out promising technology from the university and turning it into a start-up.

"It started as a boutique investment group," says Barry Paxton, managing partner of Trilogy Health Ventures. "We found there is a real need for professional management."

The most pressing of these investments are the home-health-care companies. Paxton expects their growth will mean the creation of dozens of new jobs in the short-term.

"We are looking at hiring about 100 new employees in the Ann Arbor and north Livingston County area within the next year," Paxton says.

Trilogy Health Ventures currently employs a team of five people and it's not finished building businesses by a long shot.

"I would imagine we would have a handful more companies in our portfolio soon," Paxton says. "This is a great time in Michigan. There are a lot of great companies out there."

Source: Barry Paxton, managing partner of Trilogy Health Ventures
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

The Pure Michigan Venture Development Fund has invested $4.5 million between two Ann Arbor-based venture capital firms.

Michigan eLab and Resonant Venture Partners have each received $2.25 million from the Pure Michigan Venture Development Fund. The money originates from the Michigan Strategic Fund and is awarded by the Michigan Economic Development Corp. The money is targeting first- and second-generation venture capital funds based in Michigan. The capital is intended to help those funds raise additional funds, gain traction in the market and help grow the state's investment community.

"It's validation because of the review process the MEDC puts you through," says Doug Neal, managing partner of Michigan eLab. "It's a nice step toward our fundraising goal. We're close to two thirds of the way to our first close of fundraising."

Michigan eLab is a early stage technology venture fund focused primarily on IT and life science/health care companies that spin out from the University of Michigan. Neal is the executive director at the University of Michigan's Center for Entrepreneurship. His co-founders include Rick Bolander, Scott Chou (venture capital veterans since the 1990s) and Bob Stefanski (a Silicon Valley serial entrepreneur with a number of technology start-up exits under his belt). The venture capital firm is working to bring both more seed capital and expert business coaching into the local entrepreneurial ecosystem from places like California.

"We're not just about venture capital," Neal says. "We are also about bringing talent back to Michigan."

Two University of Michigan MBA graduates launched Resonant Venture Partners in 2010 after leading the Ross School of Business' Wolverine Venture Fund. The firm's focus is to fill the need for early stage investments in tech companies. Its investment portfolio includes some of the region's highest profile start-ups, such as Duo Security (an Internet security start-up that has attracted funding from Silicon Valley) and Accio Energy (an alternative energy start-up led by the CEO that built Accuri Cytometers into a acquisition worth hundreds of millions of dollars).

The Pure Michigan Venture Development Fund plans to invest in as many as two more new Michigan-based venture funds. Winning venture funds must raise additional private-sector capital amounting to at least 4.5 times the state's investment. The Pure Michigan Venture Development Fund is currently accepting application until February 28. Applicants are required to raise at least $1 million in private capital, but not more than $25 million, from at least three unrelated investors at the time of application.

Source: Doug Neal, managing partner of Michigan eLab
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

FarmLogs is bringing software and technology to a sector of the economy not know for early adoption - agriculture.

The Ann Arbor-based start-up is creating online-based, farm-management software with an eye toward helping farmers make better business decisions. The idea was born in Silicon Valley, the brainchild of two Michigan ex-patriots, and first incubated at the famed Y Combinator a little more than a year ago. It found well-known investors on the West Coast and was poised to become the next posterchild for Silicon Valley start-ups when it did something unconventional. It moved back to Michigan.

"We decided the right move for us was to move back to Michigan, right here in Ann Arbor," says Jesse Vollmar, CEO & co-founder of FarmLogs.

Vollmar and Brad Koch grew up in a rural area in Michigan's thumb and received computer information degrees from Saginaw Valley State University in early 2012. They saw firsthand how farmers were keeping their records by hand and making important business decisions off gut feelings. There were few, if any, computers and even less analytical data.

"They don't have the software tools to plan the business and manage their results," Vollmar says. "That's what we provide."

Those tools organize the farmer's data, helps them create financial models, figure out how best to plant fields, and when to bring their crops to market and which market presents the best value. The bottom line is to help them maximize production, efficiency and profits.

"We want to be thought of as the company that is leading innovation in agriculture," Vollmar says.

That idea has help propel FarmLogs to raising a $1 million angel round. It now employs four people and is in the process of hiring two more now. It expects to bring on even more as it starts to accelerate its growth with Ann Arbor as its base. And the reason for relocating Ann Arbor were pretty self-evident for Vollmar and Koch.

"Ann Arbor has a better start-up culture and vibe that we thought would be better for attracting talent," Vollmar says.

Source: Jesse Vollmar, CEO & co-founder of FarmLogs
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.