Ann Arbor

Three multi-story apartment buildings coming to AA in 2012

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January 11, 2012

Construction on three multi-level apartment buildings that will range from three stories to 12 and house hundreds of residents, mostly students, has begun in downtown Ann Arbor. The most controversial of the trio of projects that aim to bring density to downtown is CityPlace on Fifth Avenue near Packard on the southern border of the Central Business District. Foundation work is going on now and the two buildings each of three stories should be ready for occupancy by December, says Ralph Whelton, chief development official for the city of Ann Arbor. Parking will also be built. Residents living near the project objected to the the developer's plans to raze homes but also opposed early plans to preserve them as part of a bigger project known as Heritage Row. The homes were mostly rentals for college students. The other two apartment buildings, the 12-15 story Varsity Apartments on Washington and Division, and the City Center Apartments on First and Washington west of Main, should be ready for move-in by September, Welton says. The Varsity Apartments will likely be 12 stories but could go as high as 15, Welton explains, and have a first floor of commercial space. The Ann Arbor City Center apartments will be eight stories on top of four stories of parking, two above ground, two below. Some parking will be for the public. Ann Arbor's Downtown Development Authority will own the parking structure. "It's very unusual," to have three large apartment buildings coming in within such a short span. But it appears the need and the market is there. "It'll be good for business," he says. "The residents may be students, but they still need to eat, buy things." Source: Ralph Welton, chief development official, city of Ann Arbor Writer: Kim North Shine

3.7 Designs aims to hire 2-3 as it releases new products

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Economic Development

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January 11, 2012

3.7 Designs has traditionally made its money through hourly billing for its software and website work. These days the Ann Arbor-based firm is moving toward creating more training products and other software programs that provide more reliable revenue streams. "Our focus now is how do we create a product we can maximize our time," says Ross Johnson, CEO of 3.7 Designs. He adds that these sorts of training products and software programs come with steady customer bases that should allow for more growth. 3.7 Designs currently employs four people, including an intern. That team is currently working to develop and release three products over the next year and improve three of its existing products in the same period. Johnson hopes to add another 2-3 people with that new work. "We're focusing on developing something with a steady customer base," Johnson says. Source: Ross Johnson, CEO of 3.7 Designs Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor’s CytoPherx lands $34M in venture capital

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Economic Development

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January 11, 2012

CytoPherx pulled down one of the largest venture capital rounds in recent memory, raising $34 million from the likes of Early Stage Partners, ONSET Ventures and Capital Midwest Fund. David Weaver, chairman & founder of Great Lakes Angels, a group of about a dozen angel investors based in Bloomfield Hills, first reaction to the amount of money raised by CytoPherx was "Wow, that's a lot of money." He said a seed round that big will give the start-up a lot of flexibility to commercialize its product. "That gives them room to breathe," Weaver says. "That's a big deal to have that much money around." The Ann Arbor-based bio-tech start-up plans to use the funds to complete its clinical trials and gain FDA approval for its anti-inflammatory therapy for acute kidney injuries. CytoPherx's therapy can be used to ease the pain of intensive care unit patients with kidney injuries, such as Renal failure, suffering from extreme inflammation. It is also expected to help patients recover and live more full-filling lives. CytoPherx spun out of the University of Michigan in 2007. It has raised several million in seed capital before this latest financing round, including a $5 million raise in 2010. The start-up has its eyes on the more than 2.7 million hospitalized patients in the U.S. diagnosed with acute renal failure. Approximately 160,000 receive Continuous Renal Replacement Therapy, which CytoPherx hopes to make it technology a part of, representing what it claims is a multi-billion dollar potential market. Source: CytoPherx and David Weaver, chairman & founder of Great Lakes Angels Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Great Lakes Angels invests in Ann Arbor’s Blaze Medical Devices

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Economic Development

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January 11, 2012

Blaze Medical Devices recently closed a $250,000 seed capital round that was led by a handful of investors from the Great Lakes Angels Group. The Ann Arbor-based startup is developing a product that focuses on quality control and optimization for the blood banking and transfusion industry. The technology analyzes stored blood to allow clinicians to predict the effectiveness of transfusions by assessing the levels and rates of quality loss during storage for individual units. The investors from Great Lakes Angels moved on investing in Blaze Medical Devices so they could take advantage of Michigan's angel tax credit (it expired at the end of 2011) and because the 5-year-old start-up has also received two patents. That sort of forward progress makes the start-up an attractive company for a future acquisition. "It appears Blaze Medical Devices will need less than $10 million to get to an exit," says David Weaver, chairman & founder of the Bloomfield Hills-based Great Lakes Angels. "That creates the opportunity for less dilution." Weaver adds that Blaze Medical Devices is aiming to be acquired by 2015 or 2016. By then it should have $40 million in sales, proving the products viability but still leaving a high ceiling for future sales. Source: David Weaver, chairman & founder of Great Lakes Angels Writer: Jon Zemke

HealPay scores seed investment for debt collection software

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Economic Development

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January 11, 2012

When HealPay's co-founders, Erick Bzovi and Lancelot Carlson, went looking for seed capital to grow their software startup, the pair quickly realized their best chance for finding funding wasn't necessarily with traditional venture capital firms. The Ann Arbor-based start-up found success with angel investors familiar with the debt collection industry. "We went with people who understand the space," Bzovi says. "It was a lot easier." HealPay is developing web & mobile apps that make collecting money easier. The 18-month-old start-up has raised a six-figure seed capital round Bzovi characterizes as worth "a few hundred thousand dollars." "It provides us a runway for the next 12-18 months," Bzovi says. He adds the money will allow Bzovi and Carlson to focus on the start-up full-time, further develop the software and market it. The pair hope to double their staff of two people over the next year as they start to roll out the software. HealPay plans to open-source its invoice application, called BillerApp, to the software development community early this year. The idea is to disrupt the invoice market with our free invoice application. The company plans to use that free software as a launchpad to draw in customers to its SettlementApp, which is plans to monetize. Source: Erick Bzovi, co-founder of HealPay Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor city website ranks 5th in national survey

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In The News

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December 14, 2011

For four years running the city of Ann Arbor's website has been ranked fifth best for cities with a population of 75,000- 124,999 in the nation by e.Republic’s Center for Digital Government and Digital Communities magazine. Kudos were given for online access to city expenditures, right-of-way permits, and the soon-to-be implemented online process for other permits. Check out the rankings here.

U-M prof weighs in on tech bubble predictions

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Economic Development

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December 14, 2011

A U-M engineering professor takes a look at the latest bubble-like eruptions in the tech market and figures whether the valuations are justified. Excerpt: "The ‘right’ answer, albeit wholly unsatisfactory, is that it depends on how one looks at these companies’ business models and value capture potential, Groupon’s recent unconventional revenue reporting notwithstanding. So let’s dissect business model and value capture potential differences between the dot-com boom and what is going on with the social network companies right now." Read the rest of Peter Adriaen's column here.

Student seed capital takes root at A2 New Tech Meetup

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Economic Development

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December 14, 2011

A2 New Tech Meetup traditionally has been a staple for start-ups looking to generate buzz among their peers and the local investment community. Earlier this week, the emerging Ann Arbor institution for grass roots entrepreneurial activists expanded on that by helping spread some seed capital to studentpreneurs with raw start-ups with the Michigan Business Model Competition. "There is lots of guerilla economic development work happening here by grass roots groups," Dug Song, one of the organizers of A2 New Tech Meetup, said during the event. He was speaking about both A2 New Tech Meetup and the new Michigan Business Model Competition but also things like Tech Brewery and TechArb incubators. The Michigan Business Model Competition, developed and run by the University of Michigan School of Information's SI-Create organization, attracted 22 start-ups and studentpreneurs from the University of Michigan to participate in the event. Those participants were whittled down to four finalists that made presentations at the A2 New Tech Meetup before a crowd filled with many of Ann Arbor's biggest new economy movers and shakers. The judges included the likes of Menlo Innovations Rich Sheridan, Skip Simms of Ann Arbor SPARK and serial entrepreneur Kurt Skifstad. "The quality (of start-ups) keeps going up and up," Sheridan said before announcing the winner. The start-ups competed for $5,000 in cash prizes with the winner taking home $2,500. That might not seem like much for the average serial entrepreneur trying to score the next nine-figure biotech acquisition, but it left the winners, Emily Potter and Jessica Lai, truly elated. Their start-up, Yo Mama Packed It!, is a subscription lunch service for students who don't want to miss a meal because they're short on time. This is the first Michigan Business Model Competition at A2 New Tech Meetup but organizers were pleased with its outcome and optimistic about doing something similar in the future that could further marry Ann Arbor's entrepreneurial community with the college town's ivory tower. "We're having the bridging of town and gown, which doesn't happen often enough here," Song said during the event. Source: Dug Song, organizer of A2 New Tech Meetup and Rich Sheridan, judge of Michigan Business Model Competition Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

OcuSciences puts diabetes test through clinical trials, adds two jobs

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Economic Development

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December 14, 2011

OcuSciences continues to grow its staff as it pushes forward its development of an ocular test for diabetes, hiring two University of Michigan graduates in recent months. The University of Michigan spin-out is developing an ocular diagnostic technology for metabolomic diseases. In layman's terms, that technology allows doctors to diagnose patients with diseases like diabetes by scanning their eyes. The process has the potential to be more accurate and catch a diabetes diagnosis much earlier than traditional methods. The three-year-old start-up's eight-person team has been in clinical trials since 2008 and expects to continue testing and developing the third generation of its product next year. That will probably mean a few more hires for the fledgling firm. "With our product team in place we will do more of our development in Michigan," says Kurt Riegger, COO of OcuSciences. OcuSciences recently won the Life Sciences Award at the Accelerate Michigan Innovation Competition in Ypsilanti. The company took home a $25,000 check and some credibility with both local and out-of-state investors. "It's a good validation," Riegger says. Source: Kurt Riegger, COO of OcuSciences Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

DeNovo Sciences aims at $1M seed round with Accelerate Michigan win

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Economic Development

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December 14, 2011

DeNovo Sciences has its sights set on closing a seven-figure angel round within the next few months, thanks to the boost from its big win at the Accelerate Michigan Innovation Competition. Of course it doesn't hurt to have the competition's $500,000 top prize to start with. Kalyan Handique, the start-up's new CEO, says the win "definitely helps move our investors toward signing a term sheet," which he expects will happen by the time his company closes its first investment round in the first quarter of 2012. "We want to get to $1 million in funding so we're on track next year," Handique says. "We plan to make our prototype next year." DeNovo Sciences is developing a method of transmitting blood samples from a remote region to a clinical laboratory via cell phone technology as an early warning system for cancer. The one-year-old start-up has gone from its three co-founders volunteering at last year's Accelerate Michigan competition to get access to the entrepreneurs and investors there to landing the top prize this year. It recently hired Handique, a co-founder of HandyLab, as its CEO and moved into new space at the Michigan Life Science & Innovation Center in Plymouth. DeNovo Sciences' team of four has also lined up a number of consultants and business experts so it can further build out its team next year. That looks like it will be happening sooner than they expected with the Accelerate Michigan hype. "The win is definitely helping us speed up the entire process," Handique says. Source: Kaylan Handique, CEO of DeNovo Sciences Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.