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Avegant raises $1.9M in investment, $1.5M in crowdfunding

Most startups are excited to have seven figures worth of seed capital coming in. Avegant has managed to score two in its first year.

The downtown Ann Arbor-based startup has raised $1.9 million in a Seed Round. It also raised $1.5 million from a crowdfunding campaign earlier this year. And all of these people willing to throw money at the company can’t wait to see its night-vision technology.

"We smashed our (crowdfunding) goal (of $250,000) in a matter of three hours," says Edward Tang, CEO of Avegant.

Avegant co-founders Tang and Allan Evans met at the University of Michigan. They were approached by military contractors about creating better night-vision equipment for military drivers during wartime. Soldiers were experiencing better results using thermal night vision while driving. The problem was the display was in their vehicle’s dash instead of over their eyes.

Tang and Evans found that the computer screen and eye fatigue often downgraded the viewing quality. In response they created a night-vision goggle that projected the image directly on the users eye, providing a big step forward in picture quality.

"It was a higher picture quality that I had ever seen before," Tang says.

Avegant's team of 11 employees and one intern has created three different evolutions of the prototype since landing the $1.9 million in a Seed Round last August. The Michigan Angel Fund, an angel investment group, led that investment round. Tang expects to ship the first commercial units of the night-vision goggles before the end of the year.

"We're considering doing pre-orders on the website," Tang says. "It's going really well."

Source: Edward Tang, CEO of Avegant
Writer: Jon Zemke

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

North Coast Technology Investors start off year with big exit

One of Ann Arbor's venture capital staples officially scored a big exit early this year, and chances are you haven't heard about it.

NTT Communications
, a Tokyo-based multinational corporation, acquired Denver-based Virtela Technology Services for $525 million. The deal was finalized in January, and Ann Arbor-based North Coast Technology Investors was one of the early investors in Virtela Technology Services.

"These don't happen everyday," says Hugo Braun, partner with North Coast Technology Investors. "We're pretty excited about it."

The 15-year-old venture capital firm is currently in the midst of deploying its third investment fund worth $30 million. North Coast Technology Investors' team of three people have made nine investments from the fund and recorded two exits. The other exit was Ford's acquisition of Ferndale-based Livio last fall.

"We're still in investment mode," Braun says. "We have half of our money left in our fund. Some of it is committed to other investments but we think we will make a few more this year."

One of its most recent investments is in VNN, formerly Varsity News Network, which recently raised a $3 million Series A round. The Grand Rapids-based startup is pushing forward a collaborative effort between traditional and community sports journalists to provide media coverage for every high school sport. It took first place and $500,000 in seed capital in last fall’s Accelerate Michigan Innovation Competition.

Source: Hugo Braun, partner with North Coast Technology Investors
Writer: Jon Zemke

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

Michigan Business Challenge sends 113K to student startups

A wide variety of student-led startups scored thousands of dollars in seed capital at the most-recent Michigan Business Challenge.

The annual business-plan competition at the University of Michigan awarded $113,000 from the Michigan Business Challenge and Dare to Dream grant program. The competition awarded money to 16 teams that ranged from $200 to teams that made it past round one to $20,000 for the top placer. Among the winners were clock generator technology for the microprocessor market and a workout water bottle that can be turned inside out so it can be washed.

"When you have that kind of diversity of really smart people all in one place it is unusual if you don’t see that sort of breadth of diversity when these competitions come up," says Stewart Thornhill, executive director of the Zell-Lurie Institute for Entrepreneurial Studies, which organized the competition.

Among the top winners are:

Movellus Circuits won the Pryor-Hale Award for Best Business (worth $20,000) for its patent-pending clock generator technology for the microprocessor market.

Flipsi won the Pryor-Hale runner-up award for best business ($10,000) and the marketing award ($2,500). Flipsi is creating a reusable drinking bottle that flips completely inside out to facilitate easier cleaning.

A group of three U-M graduate students studying engineering ands business won the Erb Institute award for Sustainability ($7,500). The trio is developing an energy system that installs heavy-duty power electronics and battery storage units in commercial buildings for fast-charging services to electric vehicle drivers.

MyDermPortal won the Outstanding Presentation award ($2,000) and the Marketing award ($2,500) for its web-based app for dermatologists to provide follow-up treatment via the Internet for the most common diagnoses in significantly less time than an in-person visit.

Lab Compass won the Most Successful Undergraduate Team award ($2,500) for its cloud-based software enabling more efficient collection, storage and sharing of sensitive healthcare data used in medical research.

Nodify won the Best Written Plan award ($2,000) for its mobile apps that automatically refine a user’s professional network into a manageable group of important contacts and suggests relevant reasons to stay in touch.

"The ones that did emerge at the tip of the heap are the one that showed the most promise," Thornhill says.

Source: Stewart Thornhill, executive director of the Zell-Lurie Institute for Entrepreneurial Studies
Writer: Jon Zemke

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

U-M startup takes top prize at Michigan Collegiate Innovation Prize

GENOMENON, a startup founded by University of Michigan students, walked away with the top prize at the Michigan Collegiate Innovation Prize last week. The win allows the healthcare software startup to pocket $40,000 in seed capital.

GENOMENON's technology is the product of three U-M pathologists. The trio is developing software focused on improving cancer diagnosis and treatment. The company won the top prize at the event and the competition’s health category.

This is the fifth year for the competition, which has changed names and pivoted its focus a couple of times. The Michigan Collegiate Innovation Prize is a three-month program that helps innovators find the market for their products. It is organized by U-M's Center for Entrepreneurship and offers $100,000 in seed capital for student-led startups.

Startups from across Michigan’s colleges are eligible to compete. This year it fielded 81 student teams from 16 colleges. Twenty three of those teams made the semifinals and five of those teams walked away with seed capital prizes.

"It's about talent retention through Michigan-based ventures," says Amy Klinke, associate director at University of Michigan’s Center for Entrepreneurship. "For us it's a win that these students stay in the state to lead these ventures."

The Michigan Collegiate Innovation Prize got its start as a business plan competition at the University of Michigan. It then pivoted to become the Michigan Clean Energy Competition and expanded its reach to include participants from across the Great Lakes State. This year it opened up the competition even further to invite participants from a number of different new economy sectors, such as software.

Source: Amy Klinke, associate director at University of Michigan’s Center for Entrepreneurship
Writer: Jon Zemke

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

Michigan eLab's portfolio company looks to open Ann Arbor office

Venture capital firm Michigan eLab made its first investment in a startup last year, and it’s now helping that company establish a presence in Ann Arbor.

Fonemine is headquartered in Silicon Valley. The software startup scored an investment from Michigan eLab last fall and is working to open a sales office in Ann Arbor.

"They have already hired one sales rep in Ann Arbor," says Doug Neal, co-founder of Michigan eLab. “They are partnering with (Detroit-based) VisionIT.”

Michigan eLab launched about a year ago with the idea of funding startups in Michigan and bridging the gap between tech super hubs like Silicon Valley and the Great Lakes State. The firm has five partners, one administrative staffer and an intern. That team has raised almost half of its first fund, which has a goal of $40 million, and hopes to finish fundraising before the end of the year.

Michigan eLab specializes in investing in early-stage tech startups. Its average investment is $1 million. Neal hopes to close on two more investments in the near term, including one with an Ann Arbor-based startup.

"The pipeline is great," Neal says. "It's amazing how many opportunities we are seeing."

Source: Doug Neal, co-founder of Michigan eLab
Writer: Jon Zemke

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

Trilogy Health Ventures expands with 60 new hires

Trilogy Health Ventures launched businesses in three areas in the last few years, expanding into pharmaceutical research, consulting and home healthcare. The Ann Arbor-based firm’s investment in latter of those sectors is paying off the most.

Trilogy Health Ventures owns three home healthcare businesses that provide home healthcare for senior citizens and other people in need across Michigan. Trilogy Ventures North handles cities like Bay City, Mt. Pleasant and Flint. Trilogy Ventures South covers Ann Arbor and Jackson. Trilogy Ventures West overseas Grand Rapids Kalamazoo and Hastings.

"These are really driving the hiring of new employees," says Barry Paxton, managing partner of Trilogy Health Ventures. "We have just been growing like crazy in the senior-care space. We're looking at subsequent investments in the business."

Those three businesses have hired 60 people over the last year, mostly nursing assistants and other types of home healthcare workers. Paxton expects to double that head-count over the next year.

Trilogy Health Ventures employs 70 people through all five of its businesses. It has two other businesses not associated with home healthcare. Pharma Form Solutions specializes in contract pharmaceutical research but has experienced flat revenues while hunting for new work. Paxton Holdings, a pharmaceutical consulting service, has experienced modest growth over the last year.

"It's a consistent revenue stream," Paxton says. "It's been going quite well."

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

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

Draper Triangle Ventures plans to open Ann Arbor office

Draper Triangle Ventures sees an opportunity in Michigan so the Pittsburgh-based venture capital firm has its sights set on Ann Arbor.

The VC plans to make tech startups part of its newest investment fund and is opening satellite offices in Ann Arbor and downtown Detroit in order to be in the middle of Michigan’s most dynamic tech hubs.

"We'll be actively making investments," says Jonathan Murray, managing director of Draper Triangle Ventures. "There is one that is pretty far along already that could be announced within the next couple of months."

Draper Triangle Ventures invests in early stage tech ventures. Think: software and IT startups. It is in the midst of raising a $100 million investment fund with commitments for three quarters of that amount.

Murray will be Draper Triangle Ventures' person on the ground in Michigan, manning the Ann Arbor and Detroit offices. Murray graduated from the University of Michigan with an MBA and serves as an advisor to the Wolverine Venture Fund at the Ross School of Business. He plans to make 1-2 investments in local startups each year. Those investments will be in the area of $1 million.

"Our model is quality over quantity," Murray says. "We tend to be selective."

Source: Jonathan Murray, managing director of Draper Triangle Ventures
Writer: Jon Zemke

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

Flagship Ventures invests in local startup, plans to do it again

Flagship Ventures opened an office in downtown Ann Arbor a year ago and it has already starting to make some moves.

The Massachusetts-based venture capital firm participated in a Series B round for Tangent Medical Technologies about a year ago. It co-led the $8.6 million round of investment with Arboretum Ventures.

Tangent Medical Technologies is developing its NovaCath Integrated IV Catheter System, which is designed to address IV therapy challenges including catheter stabilization, healthcare worker safety, tubing management and patient comfort. NovaCath's passive needle shielding technology and closed system design is meant to minimize risk of needlestick injuries and occupational exposure to blood to the lowest feasible extent. The startup is led by Jeff Williams who also served as the CEO of bio-tech startups HandyLab and Accuri Cytometers, which were both acquired.

"Tangent has a great team," says Mike Johnson, associate with Flagship Ventures. "Its IV catheter is a novel technology with FDA clearance."

Johnson is optimistic that Flagship Ventures will make another one or two similar investments this year.

"We're enthusiastic about the opportunities in Michigan," Johnson says. "We are evaluating a number of different companies."

Source: Mike Johnson, associate with Flagship Ventures
Writer: Jon Zemke

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

FarmLogs scores $4M in VC, looks to add 6 positions immediately

First FarmLogs developed its agriculture technology. Then the Ann Arbor-based startup landed the seed capital. Now the up-and-coming firm is starting to hire.

FarmLogs recently landed $4 million in venture capital. The Series A round was led by Drive Capital, a Columbus-based venture capital firm with roots in Silicon Valley VC titan Sequoia Capital. A couple of local investment organizations also participated in the round, including Ann Arbor-based Huron River Ventures and Detroit-based First Step Fund.

That cash infusion, along with a $1 million seed round it raised last year, has allowed FarmLogs to exponentially grow its staff. The firm has hired five people over the last year, hires that consisted of software engineers and designers. It now employs nine people and is looking to add interns this summer. FarmLogs is also in the process of trying to hire another six people, primarily software engineers.

"We will double the team this year," says Jesse Vollmar, CEO of FarmLogs.

FarmLogs makes online-based, farm-management software that enables farmers make better business decisions by providing real-time analytics and other strategic information. Vollmar and Brad Koch, who grew up in rural areas in Michigan's thumb region, came up with the idea in Silicon Valley's Y Combinator but moved the startup to Ann Arbor. The idea behind the move was to be closer to agriculture business while also calling an emerging tech hub like Ann Arbor home.

The startup has taken off in its first year since it launched its product. Today farms in each of the U.S. 50 states and 130 other countries are using it. Vollmar says that 5 percent of row-crop farms (think traditional crops like corn) in the U.S. are using FarmLogs big-data technology and that number is growing rapidly.

"It all boils down to delivering more value to our customers," Vollmar says.

Source: Jesse Vollmar, CEO of FarmLogs
Writer: Jon Zemke

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

Epsilon Imaging closes in on $4M Series B round

Epsilon Imaging is landing more and more investment and the startup is close to closing on a sizable seed round.

The Ann Arbor-based company recently landed a $250,000 investment from Automation Alley's Pre-Seed Fund, which is part of more than $3 million it has raised for a Series B round. It is aiming to raise $4 million, a goal that is within the firm’s grasp.

"There is a small amount left," says Eric Sieczka, CEO of Epsilon Imaging. "We expect to have it closed out by the end of January."

Epsilon Imaging's principal product is EchoInsight, an ultrasound for cardiac imaging that quantitatively measures the strength and weakness of the heart's muscles. The technology helps medical staff analyze and interpret echo studies for cardiac patient care.

The company has been closing on sales since last summer. EchoInsight is now available in 35 hospitals across the U.S. and abroad. "We have been expanding into Europe as well," Sieczka says.

Which has required Epsilon Imaging to hire more staff. It has brought on two new employees (in sales and software development) over the last year and currently employs nine people. More hires are expected in 2014.

"We have lots of business coming at us so we need more sales people," Sieczka says. "We have a lot of business in the pipeline so we need more bodies to pull it through."

Source: Eric Sieczka, CEO of Epsilon Imaging
Writer: Jon Zemke

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

Covaron takes 2nd place, $100K at Accelerate Michigan

Covaron Advanced Materials took second place in the Accelerate Michigan Innovation Competition last month, a win that put $100,000 in cash into the startup's kitty.

That money will go toward its seed capital round. The firm raised a total of $300,000 in seed capital and also landed a $250,000 loan from the Michigan Pre-Seed Capital Fund prior to the win last month. Covaron Advanced Materials is also looking to raise a $5 million Series A.

"We're just starting to solicit that now," says Dave Hatfield, CEO of Covaron Advanced Materials.?

The Ann Arbor-based start-up, formerly Kymeira Advanced Materials, is developing a new chemistry for ceramics, which brings the benefits of existing advanced ceramics to new parts and markets. The 1-year-old company won the student portion of the Accelerate Michigan competition last year. This year the startup and its team of six people (it just hired one of its interns) leveraged that experience to turn in another winning effort.

"We had a good story," Hatfield says. "To win both of those competitions and through the vetting for the business loan from the Michigan Pre-Seed Capital Fund means you have a pretty good business plan. It’s a great confirmation for us."

Source: Dave Hatfield, CEO of Covaron Advanced Materials
Writer: Jon Zemke

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

Blaze Medical Devices raises $1.1M of $2M VC round

Blaze Medical Devices is more than halfway to its goal of raising $2 million worth of seed capital, raking in $1.1 million as of this fall.

"My goal is to close on all of that before the end of the year," says David Weaver, CEO of Blaze Medical Devices, adding it might take until early 2014 to hit the target. The 7-year-old company originally had a goal of raising $1.5 million in seed capital but bumped that number up to $2 million after encountering higher demand from investors than expected.

The Ann Arbor-based startup, which made the semi-finals of this year's Accelerate Michigan Innovation Competition, is developing blood transfusion technology that will enable medical professionals to better control and optimize blood banking and transfusions. Its clinical tests help assess the quality of stored blood and its laboratory instruments help facilitate blood research. The company has finalized the design of its product this year and hopes to begin sales early next year.

"We have a queue of people who are interested in the product for research," Weaver says. "We expect to roll it out next year."

Blaze Medical Devices has hired three people over the last year, expanding its staff to six employees. Weaver expects to make a couple more hires in 2014.

Source: David Weaver, CEO of Blaze Medical Devices
Writer: Jon Zemke

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

Ann Arbor startups set growth curve at Accelerate Michigan

If the student competition at this fall's Accelerate Michigan Innovation Competition is supposed to be a stepping stone to bigger prizes in the main event of the business plan competition, then startups from Ann Arbor are proving the theory true.

Accelerate Michigan got its start in 2010 as an event to provide access to seed capital, resources and investors to fledgling tech startups based in Michigan or those looking to move to the Great Lakes State. This year the organic growth of Michigan's startups started to show.

Covaron Advanced Materials won the student portion of Accelerate Michigan last year under the name Kymeira Advanced Materials, taking home $25,000 in seed capital. Last week the Ann Arbor-based company took second place in the overall competition, which comes with a $100,000 check. It was the most prominent example of a young, up-and-coming startup setting the growth curve at Accelerate Michigan.

Ann Arbor-based SkySpecs took third place (with a prize of $10,000) in last year's Accelerate Michigan student competition. The 1-year-old startup is developing aerial drones that use artificial intelligence to inspect infrastructure in dangerous locations, such as the blade of wind turbines.

This year it made the semifinals of the overall competition, going against older, more developed startups. Tom Brady, one of the startup’s co-founders, says "the competition is stiff" when talking about the other startups pitching at Accelerate Michigan. He and his co-founders felt much more confident about their pitch because of their previous experience in the student competition.

"If we had gone straight from an idea to the business plan competition we wouldn't have done well," says Danny Ellis, co-founder of SkySpecs.

Source: Tom Brady and Danny Ellis, co-founders of SkySpecs
Writer: Jon Zemke

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

DeNovo Sciences preps to make first sales next year

DeNovo Sciences is in the final stages of commercializing its first products and is preparing to make it first sales soon.

The 3-year-old startup is developing a platform for early detection of cancer from blood as an alternative to painful biopsies. It has spent the last year going through clinical testing, primarily for its breast- and colon-cancer-detection products. It plans to debut two of its instruments later this fall at trade shows.

"We are really excited about it," says Kalyan Handique, president & CEO of DeNovo Sciences. "We hope to start taking orders from them early next year."

DeNovo Sciences launched out of Ypsilanti and is now operating out of the Michigan Life Sciences and Innovation Center, which is managed by Ann Arbor SPARK, in Plymouth. It currently employs six full-time employees, eight part-timers and three summer interns. It has hired one person, an engineer, over the last year.

The startup took first place, which was worth $500,000 in seed capital, at the Accelerate Michigan Innovation Competition two years ago. It has raised $1.75 million in seed capital from angel investors last year. It is currently looking to raise $6 million in a Series A round from venture capitalist next year.

"It's looking good," Handique says. "It's like what we planned."

Source: Kalyan Handique, president & CEO of DeNovo Sciences
Writer: Jon Zemke

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

Student start-ups continue evolution at Accelerate Michigan

There will be some familiar start-up names in this year’s Accelerate Michigan Innovation Competition. Not because it's the same entrepreneurs pushing the same ideas. It's because a number of former studentpreneurs are now pushing their start-ups as professionals.

A number of businesses that were launched from Michigan-based student housing are among the 51 semifinalists in the Accelerate Michigan Innovation Competition. Among those are Covaron Advanced Materials (which won Accelerate Michigan's student competition last year under the name Kymeria Advance Materials), AutoBike (a product of U-M Ross School of Business grads), TurtleCell (founded by two U-M students) and SkySpecs (launched by four U-M students).

"We want to make sure we have a staircase of opportunities for students and their companies," says Lauren Bigelow, executive director of the Accelerate Michigan Innovation Competition.

The Accelerate Michigan Innovation Competition is in its fourth year. It has made a name for itself for awarding $1 million in prizes over the three-day business plan competition, including a $500,000 top prize for the top finisher. The prizes go to Michigan-based startups rooted in the new economy or startups that are looking to move to the Great Lakes State.

The competition is held annually in mid November. It was held at the University of Michigan its first two years and moved to downtown Detroit last year. This year's event will also be held in downtown Detroit on Nov 12-14, primarily at the Westin Book-Cadillac Hotel. For information, click here.

Source: Lauren Bigelow, executive director of the Accelerate Michigan Innovation Competition
Writer: Jon Zemke

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