Investment

Wind energy firm Accio Energy scores $1.9M in angel funds

By Newsroom

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May 4, 2011

Accio Energy closed its first round of fundraising, a Series A angel round, and is now richer by $1.9 million and three new members on the board of directors.The alternative energy firm, developer of a novel way to harness wind energy, took in $1.4 million in cash from a combination of angel investors and small venture capital firms, such as Ann Arbor-based Resonant Venture Partners. The other $500,000 comes from convertible debt."It's a big round for an angel round," says Jen Baird, CEO of Accio Energy. The firm also welcomed three more high-profile names to its board of directors. The new additions include retired DTE Energy President & COO Bob Buckler, University of Michigan Zell-Lurie Institute for Entrepreneurial Studies Executive Director Tom Kinnear and Resonant Venture Partner Managing Director Michael Godwin. "The bottom line is about two things," Baird says. "One, we have more capital. Two, we have a bigger, stronger board. Both of those things are important for small companies."The Ann Arbor-based start-up is spinning out University of Michigan technology that basically reinvents the wind turbine without the moving parts. Accio Energy's technology utilizes a system of aerovolatic panels (similar to a car radiator) that harness the wind's energy through a water mist and static electricity.Baird expects most of the capital raised will go toward continued development of that technology by the start-up's staff of eight employees and a handful of independent contractors and partners.Baird came on as Accio Energy's CEO last year after building fellow Ann Arbor-based start-up Accuri Cytometers into Ann Arbor's hot entrepreneurial commodity. She raised $30 million from angel investors and venture capital firms over five years. The company was acquired for more than $200 million earlier this year. Source: Jen Baird, CEO of Accio EnergyWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

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Venture Michigan Fund II sinks cash into Ann Arbor’s MK Capital

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Community Development

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May 4, 2011

The Venture Michigan Fund II, a fund of venture capital funds, has made its first investment, infusing an undisclosed amount of capital into MK Capital.MK Capital is a Chicago-based firm with offices in Los Angeles and Ann Arbor. It specializes in start-ups in the digital media, software, and education industries. The firm plans to invest in Michigan-based companies."We have already made six investments in the fund," says Mark Koulogeorge, managing partner with MK Capital. "One of them, Outside Hub Media, is based in Southfield. We're looking at more opportunities as we speak."The $120 million Venture Michigan Fund II is supported by the Michigan 21st Century Jobs Fund. Its focus is on venture capital firms targeting Michigan companies seeking seed and early-stage capital. Those start-ups are in the advanced manufacturing, health care, life sciences, IT, alternative energy, homeland security, and defense sectors.MK Capital is raising a fund worth in excess of $100 million. Koulogeorge expects it will make 13-15 investments in the digital media and software sectors, mostly in the Midwest.Source: Mark Koulogeorge, managing partner with MK CapitalWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

U-M start-up ReGenerate raises nearly $200K in seed capital

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Economic Development

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May 4, 2011

ReGenerate is the newest of the promising start-ups spinning out of the University of Michigan. The two-year-old alternative energy firm has won a number of business plan competitions, securing nearly $200,000 in seed capital over the last year.ReGenerate is developing an on-site anaerobic digester for food service operators. The idea is to divert more organic waste from creating harmful greenhouse gases and towards creating alternative energy. "We saw this as an opportunity for the way waste is handled, specifically organic gases," says Hunt Briggs, director of marketing & finance for ReGenerate. "Most of the organic waste goes into landfills and creates greenhouse gases, like methane. We want to design a system to divert that waste from the landfills and generate energy from that."The Ann Arbor-based firm calls the TechArb home. It most recently won the "Think Green" investment prize from the Rice University Business Plan Competition, beating out dozens of other student-led start-ups competing in the prestigious national event. The $100,000 award is one of seven major investment awards and goes to the best plan in the green technology sector.Briggs hopes to use that money to continue development of the firm's prototype anaerobic digester. Commercialization could come as soon as 2012, along with an expansion of the start-up's staff of five employees and 1-2 summer interns.Source: Hunt Briggs, director of marketing & finance for ReGenerateWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Study points to $215 million in VC investment, successful exits in 2010

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Economic Development

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May 4, 2011

A new study by the Michigan Venture Capital Association is pointing towards an opportunistic outlook for the state's emerging investment community.The study examines Michigan's venture capital activity between 2007 and 2010. Among the highlights are $215 million in VC investment in 30 companies during 2010, making for 76 venture-backed companies, up from 62 the previous year. Those companies are responsible for 1,200 high-tech jobs.And then there are the exits. Nine Michigan-based start-ups scored successful exits between 2007 and 2010, including three in 2010. That doesn't include non-venture-backed, high-profile firms like Mobiata and the most recent deal, the $200-plus million acquisition of Accuri Cytometers earlier this year."The exit action we have seen since 2008 has been astounding," says LeAnn Auer, executive director of the downtown Ann Arbor-based Michigan Venture Capital Association.Michigan has also defied the national trend of a shrinking venture capital industry. There are now 25 venture capital firms operating in Michigan, up from 22 in 2009. Among those are recent Ann Arbor-based start-ups like Huron River Ventures and Resonant Venture Partners."We're seeing the next generation of venture capital firms and funds being created here in Michigan," Auer says. Source: LeAnn Auer, executive director of the Michigan Venture Capital AssociationWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Huron River Ventures $7.5M VC fund to invest in clean tech sector

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Community Development

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April 27, 2011

Huron River Ventures has closed its first fund, a $7.5 million vehicle that will make investments in clean-tech start-ups, primarily in Michigan."We have a couple of opportunities that we are excited about that are at advanced stages," says Ryan Waddington, managing director of Huron River Ventures. "We have a few that are cued up and we see more everyday."Waddington started the early stage investment firm last August with Tim Streit. The co-founders are longtime Michiganders who recently returned to the Great Lakes State from careers in the financial industry (finance and private equity) in New York City and Chicago. Huron River Ventures will specialize in three sectors of the clean-tech industry, including clean energy (everything from alternative energy to energy efficiency), advanced materials, and advanced automotive and manufacturing.About 80 percent of the VC firm's first fund comes from the state of Michigan, with the remainder coming mainly from private in-state investors. Source: Ryan Waddington, managing director of Huron River VenturesWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

U-M student start-up, Are You a Human, wins $115K in Rice University Business Plan Competition

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Economic Development

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April 27, 2011

Are You a Human is feeling a little superhuman these days after the Ann Arbor-based start-up recently won six figures' worth of prize money from the Rice University Business Plan Competition, the world's largest such graduate-level competition.The nearly 1-year-old start-up specializes in creating software that gives humans the upper hand over computer programs when it comes to ordering things like concert tickets online. The company won $115,000, taking second place overall and winning the Most Promising Start-Up award."It's all basically going to go toward development," says Reid Tatoris, co-founder of Are You a Human. "Over the next 3-4 months we're going to take our website, which is at an Alpha stage, and take it to a production release stage."Are You a Human is the brain child of Tatoris and Tyler Paxton, both students at the University of Michigan. The duo created a game-based human authentication tool (think Duck Hunt) that replaces the distorted text images known as CAPTCHAs that websites use to authentic a user is actually a person. Tatoris and Paxton now oversee a team of nine, mostly U-M students who work out of the TechArb. They hope to add 2-3 more developers and coders over the next few months as they prepare to commercialize their product later this year. They hope to grow their team to up to 15 people in a year and have 200-300 websites using their technology.Source: Reid Tatoris, co-founder of Are You a HumanWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Investors, entrepreneurs to mix at U-M’s Michigan Growth Capital Symposium

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Economic Development

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April 27, 2011

The Michigan Growth Capital Symposium is coming up soon and with the recent string of profitable exits by Ann Arbor-based companies, it's looking to attract a lot of attention.The symposium, in its 30th year, has become the gold standard for start-up investment in the Midwest. About 40 companies will make presentations to a vast array of deep pockets, ranging from angel investors, venture capitalists, corporate interests, and other assorted business interests. These companies regularly are looking for funding between $500,000 and $2 million, and often get it."Any of the harvests you have seen lately, such as Health Media and Accuri Cytometers, have made their appearances at the symposium early," says David Brophy, founder of the Michigan Growth Capital Symposium and a professor at the University of Michigan Ross School of Business. "We wouldn't go if there weren't great deals happening. They might not be perfect, but they're darn good deals." Over the last 10 years, 301 local companies have presented there. Of those companies, 71 percent have raised $1.7 billion in capital and 21 percent have recorded profitable exits.The Michigan Growth Capital Symposium will be held on May 10-11 at the Marriott in Ypsilanti. Source: David Brophy, founder of the Michigan Growth Capital SymposiumWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Steve Blank reviews Ann Arbor’s entrepreneurial ecosystem

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Economic Development

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April 20, 2011

Former serial entrepreneur and university lecturer (Standford, Berkeley) Steve Blank spends a few days in Ann Arbor and assesses both our strengths and weaknesses. His final summation: We are a community with only one hand clapping. Excerpt: "Visiting Silicon Valley you can’t mistake that its primary business is innovation. In Ann Arbor and southeast Michigan entrepreneurship is a small part of a more diverse business culture. One of the characteristics of a cluster is that it isn’t hard to find other like-minded individuals. In Ann Arbor, they’re scattered in between the auto industry, biotech, hospital workers, etc. As a consequence Ann Arbor lacks the culture of risk-taking and respect for failure critical in an innovation cluster. You see it in the existing angel groups and VCs. They feel more like banks than risk capital. And that lack of tolerance for failure and comfort with the status quo gets fed back to the entrepreneurs. Getting a few experienced super-angels and/or VCs seeding 5-10 Lean Startup deals here a year, with a couple of Cleantech/energy deals as well, could kickstart the culture. Not My Problem The interesting thing is that no one seems to own the problem. The University of Michigan tech transfer office has an incubator but 1) mixes software, hardware, med devices and life sciences deals in the same program, and 2) takes no ownership of figuring out how to get a risk capital ecosystem in place. Surprisingly, the same with the entrepreneurship center in the Business School. I would have thought they’d be leading the charge." Read the rest of the story here.

The Re-Investors

By Constance Crump

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Economic Development

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April 19, 2011

With the successful exits of Esperion and Accuri, CEO's Roger Newton and Jen Baird could have taken the money and run. Instead, they're establishing new local ventures, reinvesting in Michigan's future, and helping to grow our entrepreneurial ecosystem.

Adeona Pharma raises $3.5 million in new capital

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Economic Development

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April 13, 2011

Adeona Pharmaceuticals has increased its liquidity by $3.5 million after selling 1.6 million shares of common stock.The Ann Arbor-based company plans to use that new pool of money to further the development of its reaZin and Trimesta pharmaceutical programs. "It enables us to have the funding available for additional programs in the future," says James Kou, CEO of Adeona Pharmaceuticals. "There are a lot of growth opportunities for us."Adeona Pharmaceuticals specializes in drugs that address problems in the central nervous system, such as multiple sclerosis and Alzheimer's. It commonly licenses these drugs at the clinical stage to large pharmaceutical companies.Trimesta, which is well into clinical trials, is being developed for the treatment of multiple sclerosis. So far the trial for the oral drug is 85 percent enrolled and is expected to fill completely later this year. Also in the midst of development is reaZin, a zinc-based medical food product candidate for Alzheimer's.Source: James Kou, CEO of Adeona PharmaceuticalsWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.