Innovation News

RiserCam gets Mich Microloan Fund investment

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May 5, 2010

RiserCam is taking out a little loan to help it achieve a little growth this year.The downtown Ann Arbor-based start-up is part of the latest round of financing from the Michigan Micro Loan Fund, that gave $XXX to two companies in southeast Michigan. RiserCam plans to use its loan (the amount of the individual loans are not released) for continual product development that could lead to a new hire later this year.The 3-year-old firm makes video cameras that attach to both the bows and guns of hunters. The idea is to provide capture the unique perspective of the hunter. Think of it as the cost-effective next generation of POV video, going beyond what a video cameraman in a hunting blind or tree stand can capture."There is a whole lot more in the weeds than that fraction of a second you spend pulling the trigger," says Richard Millunchick, CEO and managing partner of RiserCam. He further explains there is the everyday nature that a hunter sizes up through his or her sights, such as wildlife that is let pass by.The company started by putting these mini cameras on the riser section of hunting bows (hence the name) before expanding to shotguns. That product expansion has allowed the company to grow to two employees and a handful of independent contractors. Millunchick hopes to hire one more person later this year as the market, still in its infancy, continues to grow."The video market for hunting is very small but is growing rapidly," Millunchick says.Ann Arbor SPARK runs the micro loan fund. That $1.5 million program provides funding for start-ups so they can either commercialize their product or accelerate their business growth. The idea is to help fill the financing void left in the wake of the financial crisis. The fund had been so popular that numerous other municipalities and business accelerator agencies are scrambling to create their own, including Oakland County and the OU INCubator.The Michigan Micro Loan Fund makes anywhere from 2-4 loans of a few thousand dollars each per month for 2010. That expectation is to provide much-needed financing for 24 to 48 fledgling local businesses at a time when loans for small businesses are almost non-existent.Source: Richard Millunchick, CEO and managing partner of RiserCamWriter: Jon Zemke

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Pixel Velocity hires new COO, expects to double revenue in 2010

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Community Development

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May 5, 2010

Pixel Velocity is prepped and ready for some growth after waiting out the recent recession.The Ann Arbor-based firm expects its revenue to more than double this year and add a few more people to its staff of 19 (and few independent contractors). The company just hired a new COO to help usher in that growth."This is a pretty important break-out year for Pixel Velocity," says Eric Sieczka, president and CEO of Pixel Velocity.The company, located on the city's south side, creates high-speed digital image processing products for the surveillance and medical imaging markets. These products are used for everything from the surveillance market to the medical-imaging market, where Pixel Velocity's technology specializes in creating images of the heart.One of its big project includes installing its products at the Port of Detroit Cargo Terminals. It also has several projects going in the Washington, D.C., area. Sieczka says he can't reveal a lot of his customers because if security concerns, but says his company doesn't lack for them right now."This year we have quite a bit in the pipeline," Sieczka says.Source: Eric Sieczka, president and CEO of Pixel VelocityWriter: Jon Zemke

Ann Arbor’s Lycera lands $11 million in VC investment

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Innovation News

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May 5, 2010

The venture capital continues to pile up at Lycera now that the Ann Arbor-based firm has taken in another $11 million in financing, bringing its total to $47 million over its three and a half years of existence.All of that money has allowed Lycera to hire five people this year, expanding its staff to 15 employees and 10 independent contractors, including a number of former Pfizer employees. That's up from nine employees when we last checked in with the firm a year ago."We're still in the pre-clinical phase," says Bill Sibold, CEO of Lycera. "We hope to be in trials with people next year. This money will help us get there."That will mean another 20-25 percent increase in staff over the next year. Most of that expansion will go toward researches and development personnel. It's just the next step in what is expected to be a eight-year process to commercialization.The pharmaceutical company is developing small molecule drugs for treating autoimmune diseases such as rheumatoid arthritis and lupus. The company got its start from research by University of Michigan Chemistry Prof Gary Glick. Source: Bill Sibold, CEO of LyceraWriter: Jon Zemke

Q&A with David Brophy of Michigan Growth Capital Symposium

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Economic Development

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May 5, 2010

Want to rub elbows with the people most likely to play a critical part in reinventing Michigan's economy from brawn to brains? Then the Michigan Growth Capital Symposium is the place to be on May 11-12 at the Marriott Resort in Ypsilanti.The event, in its 29th year, is widely regarded as one of the premier places in the Midwest for deals to get done and financiers to meet the cream of the crop in new businesses and emerging technologies. The symposium will feature more than 65 investment firms, 32 top Midwestern companies seeking funding and number of movers and shakers when it comes to the Midwestern entrepreneurial ecosystem.David J. Brophy, the director of the Center for Venture Capital and Private Equity Finance at the University of Michigan's Ross School of Business, is one of the main organizers behind the Michigan Growth Capital Symposium. He agreed to answer some questions about the event and the entrepreneurial investment scene in Michigan over email. Could you sum up The Michigan Growth Capital Symposium's importance to a state like Michigan that is fighting to diversify and reinvent its economy?Since its founding in 1980, MGCS has served as the focal point for the diversification of the State's economy, providing a venue for entrepreneurs and venture capitalists to meet for the purpose of building innovative businesses through which to capitalize on Michigan's productive capabilities. MGCS has brought Michigan entrepreneurs together with guest speakers and investors from around the US and has heightened the nation-wide awareness of Michigan's economic opportunities.A recent MoneyTree Report by PriceWaterhouseCoopers and the National Venture Capital Association showed that nearly 90 percent of all the venture capital investment funds in Michigan during the first quarter of 2010 went to Ann Arbor-based companies. Ann Arbor is arguably the strongest center of Michigan's new economy but is it realistic to expect this kind of dominance on a consistent basis when it comes to venture capital investment?Ann Arbor/ UM has been the natural leader in technological innovation in Michigan since the 1950's, especially in the days when UM's Willow Run Labs were world-class producers of new technology. This background has helped make Ann Arbor/UM continue as the leader today. Recently, as the auto industry has declined, other communities have partnered with the universities they host to develop entrepreneurial activity locally. As the start-up firms created in those communities become "venture capital ready" in quality, they are attracting VC and we are now seeing a productive dispersion of venture capital around the state.Several micro loan funds have begun to pop up across Michigan over the last year. They seem to be serving a need of providing much-needed financing (loans between $1,000-$35,000) to small businesses for expansion and product development at a time when traditional lending sources have dried up. What sort of role, if any, do you think these funds will have a few years from now when financial markets have returned to a semblance of normal?Micro loan firms play a different role than do VC firms, but both are important for the growth of small businesses in general and both should be encouraged. The recent shortage of bank credit has encouraged the development/expansion of many alternative sources of business credit, including private-equity funds. When bank credit becomes accessible for small business once again, these micro lenders will need to have business models that enable them to compete with banks if they wish to maintain their market edge. The current debate about federal regulation of financial institutions will have an influence on this issue.Michigan is in the process of reforming its angel investor incentives so they provide an income-tax credit equal to 25 percent of an investment. What sort of impact, if any, could such a change make on the local angel investing community?Because Michigan's hopes for a significant role in the national market for entrepreneurial firms hinges on our ability to form and fund new companies, the encouragement of angel finance is vital. A significant tax credit would accelerate angel investment especially by those who have been reluctant to invest in such projects during the strong automotive years, as well as those who are still on the sidelines with respect to risk capital investment.Name an idea, policy or mindset from elsewhere that you would like to see this region adopt?A mindset in which innovative, knowledge-based industry is recognized as a core opportunity for Michigan, toward which all aspects of our economy should bend their energies and strategic planning.Source: David J. Brophy, the director of the Center for Venture Capital and Private Equity Finance at the University of Michigan's Ross School of BusinessWriter: Jon Zemke

SPARK East to hold elevator pitch competition in downtown Ypsilanti

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Community Development

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May 5, 2010

Delivering a short speech to win a big investment is not as easy as it looks in the entrepreneurial world, however, such behavior promises to be fun to watch when Ann Arbor SPARK hosts an Elevator Pitch competition in downtown Ypsilanti in early June. Think of it as a poetry slam for entrepreneurs. Minus the poetry.An elevator pitch is a short, persuasive speech an entrepreneur gives about their company or product to an investor preferably in the average time (a few minutes) of an elevator ride. The idea is to convince potential investors or customers to take interest. An elevator pitch is seen as a key part of a start-up culture in the Silicon Valleys of the world."We really view the elevator pitch as the opportunity for the entrepreneur to explain their idea succinctly," says Elizabeth Parkinson, vice president of marketing and communications for Ann Arbor SPARK.The pitch competition will showcase five innovation-based entrepreneurs giving their best argument for their start-ups. Ann Arbor SPARK is taking applications for the competition now through May 14. The five finalists will be chosen by May 21 so they can compete on the afternoon of June 4.The winner will receive a free year at the Ann Arbor SPARK East incubator in downtown Ypsilanti and up to $50,000 in business accelerator services. That includes everything from mentoring to legal services to a membership in the Ann Arbor Ypsilanti Chamber of Commerce. The winner will also be chosen by a small panel of local funding and business experts.Ann Arbor SPARK choose to hold the event in downtown Ypsilanti to highlight the entrepreneurial resources it offers not only at the SPARK East Incubator but at the Eastside Innovation Campus and the entire east side of Wahstenaw County. The competition is also meant to help keep the pipeline of start-ups and entrepreneurs full at the business acceleration agency."The pitch competition is just one more effort to keep the pipeline robust and full of entrepreneurs," Parkinson says.Source: Elizabeth Parkinson, vice president of marketing and communications for Ann Arbor SPARKWriter: Jon Zemke

Enmark Systems looks to hire in Ann Arbor

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Economic Development

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April 28, 2010

When the economy went south, Enmark Systems found a way to swim against the recessionary tide and keep its business afloat.The Ann Arbor-based software firm is still holding stead at about 30 people and expects to hire another person or two within the next few weeks. The 26-year-old company has managed to do that by selling its software as a way for businesses to save money in tough times."Our work has not diminished," says John Bilek, president of Enmark Systems. "It's stabilized as the company grows. We have definitely seen an uptick in the last year or two."Enmark Systems develops new software products for metal service center distributors, finding a way to combine the new economy with Michigan's more established companies. It is moving toward a software-as-a-service model for its product, allowing it to move more toward supporting its system instead of focusing on installing it."Our growth looks solid around that platform," Bilek says.Source: John Bilek, president of Enmark SystemsWriter: Jon Zemke

Arbor Teas goes green, expands staff to 6 people

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Economic Development

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April 28, 2010

Ann Arbor residents Aubrey and Jeremy Lopatin wanted to start a business to go with their day jobs a little more than six years ago. Today they have a sustainable, web-based start-up that revolves around tea called Arbor Teas."We initially wanted to open a café but we didn't have the capital for that," says Aubrey Lopatin. "So we looked at what other options were out there. We both love tea and food. It was a natural match."The Ann Arbor-based firm sells different sorts of exotic teas from its website around the world. Today about 85-90 percent of the company's customers are from outside of Michigan. It has allowed Aubrey Lopatin to make this her full-time profession (Jeremy is still an analyst with Pure Visibility) and now have a staff of four people and an intern. It hopes to hire again in the near future.One of its latest innovations is coming out with a sustainable packing that is compostable. That means users can take the tea bags, leaves and packing and put it in their compost pile in their own backyard. That goes with its ethos of delivering organic, free-trade teas in the most sustainable way possible."That's our niche and our way to move forward," Lopatin says.Source: Aubrey Lopatin, co-owner of Arbor TeasWriter: Jon Zemke

Dexter’s ReCellular grows into new markets and cultivates new customers

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Economic Development

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April 28, 2010

The last year or two have not been kind to General Motors, but the same can't be said for the GM of the cell phone recycling world - ReCellular.The Dexter-based firm is still recycling millions upon millions of cell phones, refurbishing them for a second life and keeping their toxic chemical innards out of landfills and water tables. The company recycled in excess of 5 million cell phones last year and looks to exceed that number again this year."We created this industry and we have remained on top," says Mike Newman, vice president of marketing for ReCellular. "Even though a vast majority of cell phones that are retired are left in someone's drawer and forgotten. We're trying to get them to recycle them."It is accomplishing that by reaching out directly to customers to recycle their phones. Before ReCellular relied on other businesses to collect them through donation drives. This year it has premiered SecureTradeIn.com, which offers cash for old cell phones.ReCellular refurbishes many of those phones and then sells them on the open market. Sometimes they end up in North American markets and sometimes they end up in other markets in the Third World."We're selling more phones then we have ever sold before," Newman says.That has forced the company to reconfigure its Dexter manufacturing space to accommodate at least one year of growth. Today the company employs several hundred people at its Dexter facilities. It has held its employee count steady over the last year and expects to next year, too, as the company focuses on creating efficiency and maximizing profits.Source: Mike Newman, vice president of marketing for ReCellularWriter: Jon Zemke

A2Fiber initiative moves forward, selects video winner

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Community Development

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April 28, 2010

Just because the Google Fiber application is in doesn't mean the A2Fiber team can go home. The combination of officials from the city of Ann Arbor and University of Michigan are still working on both the public stage and behind the scenes to make it to the next round of selection process."We'd like to have an ongoing public conversation," says Tom Crawford, CFO for the city of Ann Arbor and the project manager for A2Fiber. "We're still very excited about this."The latest part of that public conversation is the recent announcement of the A2Fiber's YouTube contest winner. Jeff Hayner won a 32 Gig Apple iPad for producing a 1:42 short film staring Lego characters extolling the virtues of what Google's Fiber community project could do for Ann Arbor and what Ann Arbor can do for it. Watch the video here.Google plans to build and test ultra-high speed broadband networks in a small number of communities across the country. These lines will stream data at 1 gigabit per second, about 100 times faster than most Americans get through their current cable and DSL providers.A number of communities across Metro Detroit followed Ann Arbor's lead and made an application, including Royal Oak, Birmingham, Rochester and Detroit, among others. Ann Arbor's application included a large public rally, a Facebook fan page and the YouTube contest. Local officials are still brainstorming ways to keep its momentum going this spring, summer and until Google makes an announcement about the contest.Local officials are also working behind the scenes to streamline the city's bureaucracy to fit the Google Fiber project. That includes everything from reforming the city's permit process, right-of-way and other city policies that could potentially impact the project."It's just the inner workings of government and the permit process we're going through," Crawford says.Source: Tom Crawford, CFO for the city of Ann Arbor and the project manager for A2FiberWriter: Jon Zemke

RiskMetrics adds jobs in Ann Arbor during acquisition

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Economic Development

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April 28, 2010

RiskMetrics Group continues to hire people for its Ann Arbor office even though the New York-based firm is in the midst of being acquired.MSCI is acquiring RiskMetrics for $1.55 billion in a cash-and-stock deal. That corporate event hasn't stopped the RiskMetrics from hiring in Ann Arbor. It has hired two new people since we checked in last spring, growing its staff to 20 people and one intern. It expects to hire another person and bring on up to another four interns later this year. Any growth beyond that is unclear at this point."It is currently unclear what the effect, if any, of this will be for the Ann Arbor office," Paul Schmitter, manager of the Ann Arbor office for RiskMetrics, wrote in an email.RiskMetrics creates software that determines and tests financial risk. Often this means it runs simulations on investment portfolios. The Ann Arbor office creates much of that software. RiskMetrics, which employs 1,200 people around the world, opened its Ann Arbor office a decade ago with six people. It has since moved into new office space on North Main Street, signing a six-year lease with local developer Peter Allen for about half the space in his Limestone building overlooking Argo Pond.Source: Paul Schmitter, manager of the Ann Arbor office for RiskMetricsWriter: Jon Zemke