Venture Capital

California investor sees blue skies in Michigan

By Newsroom

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April 17, 2013

California investors are seeing that Michigan is no longer a no man's land when it comes to having fundable companies. Excerpt: "Investors attracted to deals on the coasts for years overlooked Michigan as a flyover state, but those perceptions seem to be slowly changing as more outside money sets its sights on in-state companies. Just ask Ned Tomasevic, principal of Los Angeles-based private investment firm Toma Capital Management LLC... Toma created its fund in November 2012 with a group of 20 former CEOs and has yet to do its first deal. The firm wants to close a deal or two by the end of this year, Tomasevic said. Tomasevic now has a two-year mandate to spend the money raised, an amount he declined to disclose other than to say it was eight figures. He said the amount could be much more because many of his investors might be willing to write a big check to buy the right company. "I'm trying to find an owner who gets this model," Tomasevic said. "I like to be in a place with good pool of people to work with, and Michigan offers that for me." More here.

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Epsilon Imaging aims to raise $5M amid new product launches

By Newsroom

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Economic Development

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April 10, 2013

The last 12 months have been more than a little eventful for Epsilon Imaging. The Ann Arbor-based start-up launched its principal product called Stress Echo, an ultrasound for cardiac imaging that quantitatively measures the strength and weakness of the heart's muscles. It now has 12 installations of this technology in hospitals across the country and is looking to ramp up that number even more. Epsilon Imaging is also gearing up to launch its second product later this month, a cardio oncology application. The technology allows doctors to see if cancer medications are negatively impacting the heart early in the process. "The people who undergo treatment, some will have their heart come under attack from the medication," says Eric Sieczka, president of Epsilon Imaging. "The problem is you won't notice that until 8-9 months later." The firm has hired two people over the last year, expanding its staff to 12. Its two recent hires include a director of sales and a software developer. Sieczka also expects to begin fundraising for a Series B round of seed capital worth approximately $5 million, which would double its Series A funding from a few years ago. "This has been a pretty exciting year for us," Sieczka says. Source: Eric Sieczka, president of Epsilon Imaging Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Tyler Paxton at the Are You A Human space at the Madison Building in Detroit

Seeding the Ground for Next-Gen Entrepreneurs

By Jon Zemke

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Economic Development

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March 27, 2013

The risks to startup culture are a two-way street. Not only must you convince investors to make a calculated leap of faith, you also need talent that's willing to commit sweat equity to an uncertain future. The Adams Entrepreneur Fellowship Program is looking to make the second half of that equation a little easier while applying a slow-food strategy toward fostering local entrepreneurship.

AlertWatch raises $1M as it preps for Series A round

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Economic Development

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March 27, 2013

AlertWatch has set some high hopes for its first round of venture capital. The Ann Arbor-based start-up has raised $1 million in seed capital and plans to formally close on its Series A round in 2014. The 1-year-old star-up is a University of Michigan spinout and calls the Venture Accelerator at the university's North Campus Research Complex home. Its first year has focused on pushing forward the development of its patient-monitoring technology and turning its team of three people's work into full-time jobs. "A lot of it was just the blocking and tackling of getting a company off the ground," says Justin Adams, CEO of AlertWatch. AlertWatch's technology is a secondary patient monitor for hospital operating rooms. It aggregates data from multiple networks and hospital IT systems and displays them at a central location. It is currently being used in three pilot projects. Adams hopes to have its intensive care unit product ready for commercialization and to be piloting an emergency room product by early 2014. "We'd like to be in five hospitals and have a term sheet for a Series A round," Adams says. Source: Justin Adams, CEO of AlertWatch Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Gema Diagnostics set to close on $2M Series B round

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Economic Development

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March 13, 2013

Gema Diagnostics recently landed an investment from the Pure Michigan Venture Match Fund, which is part of a $2 million Series B round of venture capital the bio-tech start-up expects to close on later this month. Gema Diagnostics raised $625,000 in a Series A round when it launched in 2006, licensing technology from Michigan State and Yale universities. Its most recent round of seed capital comes from North Coast Technology Investors (which led the round), the First Step Fund and the Blue Water Angels. "It will be for a pivotal clinical trial to get the company's product to market," says Dave Repp, president & COO of Gema Diagnostics. Gema Diagnostics is developing technology that will help improve the odds of a successful in vitro fertilization. "Our tool will help clinicians figure out which of a woman's eggs is the best to fertilize," Repp says. "No other non-invasive technology can do that." Repp expects the final clinical trial to take six months and wrap up later this year, which should prompt the two-person start-up to expand its staff. Commercialization could begin by the end of the year. Source: Dave Repp, president & COO of Gema Diagnostics Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Michigan Growth Capital Symposium puts investment fish in one barrel

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Economic Development

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March 6, 2013

When Chris Rizik goes to the Michigan Growth Capital Symposium, he doesn't spend much time watching presentation. The longtime Ann Arbor-based VC and CEO of the Renaissance Venture Capital Fund, a fund of funds that invests in smaller venture capital firms, ends up spending most of the conference networking with people who are eager to bend his ear. "It's a great opportunity to do that (network with people who are hard to get ahold of)," Rizik says. "I spend about three quarters of my time in the hallway, not in the sessions." The Michigan Growth Capital Symposium has been helping make these connections for a little more than 30 years. The two-day conference annually held in Ann Arbor, May 21-22, is widely regarded as one of the best places for high-level networking in the start-up and investment worlds in the Midwest. This year's symposium will feature presentations from 40 of the Midwest's top high-growth companies and representatives from 65 investment firms. Overall attendance is expects to exceed 400 people, including entrepreneurs, angel investors and venture capitalists. Start-ups that have pitched at the Michigan growth Capital Symposium have raised in excess of $1 billion in seed capital over the years. "You get a concentration of interesting people in that place," Rizik says. "You have people in the audience whom they (entrepreneurs) would have a hard time getting a meeting with. That's valuable." Source: Chris Rizik, CEO of the Renaissance Venture Capital Fund Writer: Jon Zemke

North Coast Technology invests in Detroit-based Stik

By Newsroom

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Economic Development

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March 6, 2013

Last year meant several things to North Coast Technology Investors. The Ann Arbor-based venture capital firm made some high-profile investments, expanded its portfolio and began deploying its third investment fund in earnest. "It was one of the most active years we had in a while," says Hugo Braun, co-founder of North Coast Technology Investors. The 20-year-old venture capital firm has in excess of $100 million under management through three investment funds that are invested in 35 companies. It closed on its third investment vehicle, worth $30 million, in 2010 and currently has eight portfolio firms in that fund. It's latest investment is in Stik, an Internet start-up based in downtown Detroit's M@dison Building. North Coast Technology Investors co-led the Series A round worth $2.3 million with Detroit Venture Partners. Stik's technology helps authenticate that online reviews were made by actual people. It was founded by two Metro Detroit natives that graduated from Harvard with Facebook CEO Mark Zuckerburg. They moved it to downtown Detroit last fall and have since hired six people. North Coast Technology Investors' investment in Stik was its fourth of 2012. Among its higher-profile investments from last year was a follow-up investment in Ann Arbor-based CytoPherx, a clinical stage medical device company. Braun expects North Coast Technology Investors' team of three to make four investments this year. Source: Hugo Braun, co-founder of North Coast Technology Investors Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Renaissance Venture Fund makes first investments for 2nd fund

By Newsroom

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Economic Development

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March 6, 2013

The Renaissance Venture Capital Fund is making its first investments in its second investment vehicle, worth $60 million, over the last year. The downtown Ann Arbor-based venture capital firm also has an office in downtown Detroit, has invested $3 million of it second fund so far. The first recipient is Allos Ventures, a venture capital firm with offices in Indianapolis and Cincinnati. "They have been pretty active in looking for deals in Michigan," says Chris Rizik, CEO of Renaissance Venture Capital Fund. Renaissance Venture Capital Fund is a fund of funds, which is primarily used to invest in other venture capital funds that will in turn invest in individual companies. The Renaissance Venture Capital Fund invests in VCs that are looking to invest in Michigan-based start-ups. The 5-year-old fund of funds, which has derived its capital from private sources, launched with a $50 million fund. It closed on a $60 million fund last year. When the Renaissance Venture Capital Fund launched it deployed its capital relatively quickly to meet pent up demand. Rizik expects the deal flow to even out a little more in coming years with his company making $15 million to $20 million investments "Now it's sort of a steady flow," Rizik says. "There is no backlog. We will invest this in a steady fashion." Source: Chris Rizik, CEO of Renaissance Venture Capital Fund Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Michigan Business Challenge awards $62K to start-ups

By Newsroom

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Economic Development

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February 27, 2013

Michigan Business Challenge sent out $62,000 in seed capital this week to a broad range of start-ups being led by University of Michigan students. That cash was accompanied by another $50,000 in seed capital from the Dare to Dream program. Both programs are part of the Zell Lurie Institute for Entrepreneurial Studies at the university's Ross School of Business. The grants, ranging from $200 to $10,000, is provided by donations from alumni like the Mayleben (Dare to Dream sponsor) and partners who sponsor the awards, such as the $2,500 Marketing Award sponsored by Mark Petroff. That money is often the spark that accelerates the growth of these start-ups. "It gives them extra motivation," says Sarika Gupta, program manager for the Zell Lurie Institute for Entrepreneurial Studies. "Its validation of the idea and the business." Among this year's winners are: - Focus, a combination device and application for physical therapy and training, won the Pryor-Hale Award for Best Business for $20,000. - Exo Dynamics, an ergonomic support device that enables healthcare practitioners who experience back problems to perform at their best in the operating room, won the $10,000 Pryor-Hale Runner up and the $5,000 Williamson Award for Outstanding Business & Engineering Team - Torch Hybrid, a software service provider for marine hybrid-electric powertrain development and energy management, won $2,000 for Best Written Plan and the $2,500 Marketing Award sponsored by Mark Petroff - Centricycle, a non–profit working to improve healthcare in rural India through the implementation of sustainable diagnostic technology and education, won $7,500 from the Erb Award for Sustainability Source: Sarika Gupta, program manager for the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Michigan bucks national trend, sees rise in VC investment

By Newsroom

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Economic Development

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February 20, 2013

Venture capital investment in Michigan during 2012 was the third highest on record, since quarterly reports began in 1995. Among the three biggest winners was Ann Arbor's CertoPherx Inc., pulling in $16.44 million. Excerpt: "Investors put $232.31 million into 47 deals in Michigan last year, surpassing pre-recession levels and easily exceeding the $84.75 million invested in 36 deals in 2011, according to the quarterly MoneyTree report from the National Venture Capital Association and PricewaterhouseCoopers." Read the rest here.