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Amplifinity keeps hiring, closes Series B, looks for bigger home

Amplifinity is gunning for the growth trifecta in downtown Ann Arbor this year. The tech startup has been steadily hiring over the last year, is close to locking down a multi-million-dollar round of venture capital investment, and is starting to look at options for a bigger headquarters.

"The size of our organization could easily double in the next year," says Eric Jacobson, president & CFO of Amplifinity.

The 6-year-old company's bread and butter is software that generates Internet referrals through social media called Advocacy Management Platform. The product allows people to advocate for brands by referring new prospects, endorsing products, and amplifying marketing messages.

Amplifinity has hired 12 people over the last year, including a former intern. The firm now has a staff of 37 employees and is looking to hire half a dozen more people, including software developers and client services professionals.

"We're looking for people who are really good at working with other people," Jacobson says.

Amplifinity is in the final stages of securing a Series B round of investment. Jacobson declined to say how much the round would amount to besides saying its worth several million dollars. Amplifinity raised a $3.5 million Series A in 2012.

"We have the capital to grow," Jacobson says. "We are acquiring new customers very rapidly."

The recent growth is also pushing Amplifinity toward the capacity of its office space in Ann Arbor. The firm is starting to explore options for newer and bigger offices in a broad range of locations, but Jacobson says the firm’s leadership has a preference on where it wants to end up.

"We really love Ann Arbor because it’s a wonderful, creative town," Jacobson says. "It has really smart people. It allows us to grow a company here as well as our competitors, which are primarily in Silicon Valley."

Source: Eric Jacobson, president & CFO of Amplifinity
Writer: Jon Zemke

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

Plymouth Ventures closes on 3rd investment fund worth $61M

Plymouth Ventures doesn't typically add partners to its team, and it's not for lack of qualified candidates. That changed this year for the Ann Arbor-based venture capital firm as it added a new partner and chief financial officer to go with its new $61 million investment vehicle.

"We get about 10 resumes a year from people who grew up in Michigan, went to Washington, D.C, or San Francisco, got married, had children, and want to come home," says Jeff Barry, partner with Plymouth Ventures. "We get 10 really good resumes each year. We usually send them along (to other investment firms) to get placed. This time we happened to be looking for someone."

Two new someones to be exact. Plymouth Ventures brought on Chris Frick as its CFO and Evan Ufer (grandson of University of Michigan broadcasting legend Bob Ufer) as a partner. Both are Michigan returnees from the coasts. Ufer, who is in his mid 30s with a young family, worked in private equity in New York City before coming back to Ann Arbor. Barry points out that Ufer and Frick's resumes stood out so much that the firm knew it had to hire both to help maintain the company's growth.

"We knew we were going to need some added horse power to deploy more capital," Barry says.

Plymouth Ventures closed on its third investment vehicle worth $61 million earlier this month. That’s up from its second fund from a few years ago that totaled $41 million. Plymouth Ventures invests in scalable tech companies in the Midwest and has $100 million under management today. The firm's average investment ranges between $2 million and $6 million.

The 11-year-old firm invested two thirds of its last investment fund in Michigan-based startups. Plymouth Ventures expects to invest about half of its new fund in Michigan-based companies. It has already made its first investment for the new fund earlier this year (Ohio-based Certified Security Solutions) and is on target to make a couple more before the end of the year.

"We're looking at a handful of great companies in the Great Lakes region," Barry says. "We expect to do 2 more (investments) before the end of the year."

Source: Jeff Barry, partner with Plymouth Ventures
Writer: Jon Zemke

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

Augment Ventures makes 2 investments in lighting startups

Augment Ventures is off to a fast start for 2014, making two investments in clean-tech startups and laying the groundwork to make a couple more before the end of the year.

"Our portfolio is up to five startups right now," says Sonali Vijayavargiya, founder & managing director of Augment Ventures.

Vijayavargiya launched the venture capital firm out of Ann Arbor nearly three years ago. Augment Ventures specializes in making early investments in startups in the clean-tech/sustainability sector. Its most notable investment so far is in downtown Ann Arbor-based logistics tech firm LLamasoft in 2012.

Augment Ventures has made two investments so far this year. Both firms, Revolights and Lumenetix, are based in California. Lumenetix designs, manufactures and sells UL recognized color tunable LED light engines for fixture manufacturers. It is currently working with one of the Big 3 (Vijayavargiya declined to say which one) to integrate its products in the automotive sector. Revolights is working to bring new lighting solutions to bicyclists.

"They're trying to bring 360-degree visibility to commuter bikers," Vijayavargiya says. She adds, "we are very excited about both (startups)."

Augment Ventures has also added a couple of people to its team this year, expanding it to five people. That staff is working to nail down a couple more investments before the end of this year.

"We are actively doing due diligence with five opportunities," Vijayavargiya says. "Two of those firms are Michigan-based."

Source: Sonali Vijayavargiya, founder & managing director of Augment Ventures
Writer: Jon Zemke

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

Ann Arbor SPARK scores $500K for Michigan Angel Fund

The Michigan Angel Fund has enjoyed so much success in its first year that organizers are coming out with a sequel in 2014.

The Michigan Economic Development Corp is giving Ann Arbor SPARK, which manages the Michigan Angel Fund, $500,000 for the continuation of the Michigan Angel Fund’s first investment vehicle and then some.

"This is allowing us to raise a second fund," says Skip Simms, manager of the Michigan Angel Fund and senior vice president of Ann Arbor SPARK. "The first fund is nearly all invested. It will allow us to continue investing in early stage technology companies across the state."

The Michigan Angel Fund is an angel-investment equity fund that specializes in early stage investments. It only invests in Michigan-based tech start-ups in the hopes of growing the Great Lakes State’s new economy.

It has 72 members and has made six investments in its first year. Those investments range from $100,000 to $250,000 and are part of seed rounds for startups looking to raise between $250,000 and $2 million. Its latest investment is in Larky, an Ann Arbor-based mobile app startup that just closed a $1.76 million Series A round.

"We will probably have a portfolio of 9-10 companies (by the end of the year)," Simms says.

Source: Skip Simms, manager of the Michigan Angel Fund and senior vice president of Ann Arbor SPARK
Writer: Jon Zemke

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

Ann Arbor-based AdAdapted raises $725,000 in seed round

AdAdapted has locked down $725,000 in seed capital to help it scale up its mobile advertising platform.

Among the investors were the University of Michigan’s Zell Lurie Commercialization Fund, Belle Michigan, and Start Garden. The Ann Arbor-based startup plans to initially use part of the money to accelerate its hiring. The 2-year-old company currently employs six people after hiring three over the last year. It's currently looking to hire a software developer and sales professional. After that much of the money will be used to help get the word out about AdAdapted.

"We'll mostly be using it on sales and marketing after that," says Molly McFarland, co-founder & chief marketing officer of AdAdapted.

The startup's advertising platform connects advertisers with developers to create customized native ads in mobile apps. It strives to provide a simple interface so advertisers can find their best  audience. The idea is to do away with intrusive banner ads by replacing them with slicker native ads.

"We have clients right now," McFarland says. "The technology is up and running."

AdAdapted's technology is being used by some advertisers. The startup's staff is currently working to flesh out the platform and expand its client base.

Source: Molly McFarland, co-founder & chief marketing officer of AdAdapted
Writer: Jon Zemke

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

Huron River Ventures builds startup ecosystem in Kerrytown

Huron River Ventures isn't just a venture capital firm looking to build a portfolio of startups and investors. It’s working to build its own little entrepreneurial ecosystem in Kerrytown.

The 4-year-old VC, which specializes in early stage investment, opened up its first office this spring in Kerrytown. It is sharing the space with a handful of other venture capital firms and a few startups, including Local Orbit and TurtleCell. The idea is to create a concentration of techies and investors in a cool space in one of Ann Arbor's most cosmopolitan neighborhoods.

"We wanted to see if we could create a little space with some critical mass," says Ryan Waddington, partner of Huron River Ventures. "We wanted to create a space where people could bump into each other more frequently."

Huron River Ventures renovated the old Ann Arbor Observer space on the 1st floor of the Market Place building at 303 Detroit St. Arboretum Ventures already occupies the third floor of the building. Huron River Ventures was also able to recruit the Ann Arbor offices of a number of VCs, including Draper Triangle, Cultivian Sandbox, Arsenal Venture Partners, and Detroit Innovate.

"It doesn't make a lot of sense to build out a big office when you're a staff of one," Waddington says.

Huron River Ventures, which has a core staff of two people, closed on a $11 million investment fund (its first) in 2011. It has made 11 investments, has 10 portfolio companies, and has recorded one exit. It currently has one term sheet out for another investment and is looking to make three more investments by the end of this year.

Source: Ryan Waddington, partner of Huron River Ventures
Writer: Jon Zemke

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

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.
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