Venture Capital

Tissue Regeneration Systems near to closing on Series B round

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February 13, 2013

Tissue Regeneration Systems is close to announcing its Series B round of fundraising, an infusion of seed capital that is expected to be worth between $2 million and $2.5 million. The nearly 5-year-old medical device start-up is commercializing a skeletal reconstruction and bone regeneration technology. The University of Michigan spin-out is going for initial FDA approvals for its technologies and hopes to score those approvals within the next year. It also has scored a $1 million grant from the National Institute of Health. "We believe that achieving these objectives puts the company in position to raise larger amounts of capital," says Jim Fitzsimmons, president & CEO of Tissue Regeneration Systems. To really build the company we need to raise sufficient capital." The company is predominantly a virtually based firm but has offices in both Ann Arbor and Seattle. It has a team of five employees and the occasional intern. Three members of its team are based in Ann Arbor. Source: Jim Fitzsimmons, president & CEO of Tissue Regeneration Systems Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

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New investment fund could mean big things for Ann Arbor startups

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Community Development

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February 13, 2013

Beringea, along with Credit Suisse, is launching the second investment fund for Michigan Growth Capital Partners. Michigan Growth Capital Partners II is a $180 million fund focused on providing investment capital for start-ups based in the Great Lakes State. The fund, which is expected to be deployed over the next 4-5 years, looks to focus on companies in the following sectors: advanced materials and manufacturing, health care and life sciences, media and communications, specialized consumer goods, homeland security, IT and clean technology. "There has been a tremendous increase in the level of innovation that has been taking place across the state," says Charlie Rothstein, founder & senior managing director of Farmington Hills-based Beringea. Ann Arbor-based firms have been the beneficiary of a significant chunk of change in the first fund, which was launched in 2008. Some of the local big names include ReCellular (the largest cell phone recycler in the U.S.) and Sakti3, a University of Michigan spin-out working on battery-storage technology for electric vehicles. Both are based in Ann Arbor. The biggest prize is Accuri Cytometers, an Ann Arbor-based bio-tech start-up that was recently acquired for nearly $300 million. There is no guarantee any of the money from the second fund will end up with any Ann Arbor-are start-ups this time around. But considering the robustness of the venture capital industry and the entrepreneurial ecosystem in Washtenaw County it looks like there is amply opportunity for a significant amount of the the $180 million in the Michigan Growth Capital Partners II to land in Ann Arbor. Source: Charlie Rothstein, founder & senior managing director of Beringea Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Pure Michigan Venture Dev Fund invests $4.5M in Ann Arbor VCs

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Community Development

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February 6, 2013

The Pure Michigan Venture Development Fund has invested $4.5 million between two Ann Arbor-based venture capital firms. Michigan eLab and Resonant Venture Partners have each received $2.25 million from the Pure Michigan Venture Development Fund. The money originates from the Michigan Strategic Fund and is awarded by the Michigan Economic Development Corp. The money is targeting first- and second-generation venture capital funds based in Michigan. The capital is intended to help those funds raise additional funds, gain traction in the market and help grow the state's investment community. "It's validation because of the review process the MEDC puts you through," says Doug Neal, managing partner of Michigan eLab. "It's a nice step toward our fundraising goal. We're close to two thirds of the way to our first close of fundraising." Michigan eLab is a early stage technology venture fund focused primarily on IT and life science/health care companies that spin out from the University of Michigan. Neal is the executive director at the University of Michigan's Center for Entrepreneurship. His co-founders include Rick Bolander, Scott Chou (venture capital veterans since the 1990s) and Bob Stefanski (a Silicon Valley serial entrepreneur with a number of technology start-up exits under his belt). The venture capital firm is working to bring both more seed capital and expert business coaching into the local entrepreneurial ecosystem from places like California. "We're not just about venture capital," Neal says. "We are also about bringing talent back to Michigan." Two University of Michigan MBA graduates launched Resonant Venture Partners in 2010 after leading the Ross School of Business' Wolverine Venture Fund. The firm's focus is to fill the need for early stage investments in tech companies. Its investment portfolio includes some of the region's highest profile start-ups, such as Duo Security (an Internet security start-up that has attracted funding from Silicon Valley) and Accio Energy (an alternative energy start-up led by the CEO that built Accuri Cytometers into a acquisition worth hundreds of millions of dollars). The Pure Michigan Venture Development Fund plans to invest in as many as two more new Michigan-based venture funds. Winning venture funds must raise additional private-sector capital amounting to at least 4.5 times the state's investment. The Pure Michigan Venture Development Fund is currently accepting application until February 28. Applicants are required to raise at least $1 million in private capital, but not more than $25 million, from at least three unrelated investors at the time of application. Source: Doug Neal, managing partner of Michigan eLab Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

FarmLogs brings software to agriculture, scores $1M angel round

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Economic Development

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January 30, 2013

FarmLogs is bringing software and technology to a sector of the economy not know for early adoption - agriculture. The Ann Arbor-based start-up is creating online-based, farm-management software with an eye toward helping farmers make better business decisions. The idea was born in Silicon Valley, the brainchild of two Michigan ex-patriots, and first incubated at the famed Y Combinator a little more than a year ago. It found well-known investors on the West Coast and was poised to become the next posterchild for Silicon Valley start-ups when it did something unconventional. It moved back to Michigan. "We decided the right move for us was to move back to Michigan, right here in Ann Arbor," says Jesse Vollmar, CEO & co-founder of FarmLogs. Vollmar and Brad Koch grew up in a rural area in Michigan's thumb and received computer information degrees from Saginaw Valley State University in early 2012. They saw firsthand how farmers were keeping their records by hand and making important business decisions off gut feelings. There were few, if any, computers and even less analytical data. "They don't have the software tools to plan the business and manage their results," Vollmar says. "That's what we provide." Those tools organize the farmer's data, helps them create financial models, figure out how best to plant fields, and when to bring their crops to market and which market presents the best value. The bottom line is to help them maximize production, efficiency and profits. "We want to be thought of as the company that is leading innovation in agriculture," Vollmar says. That idea has help propel FarmLogs to raising a $1 million angel round. It now employs four people and is in the process of hiring two more now. It expects to bring on even more as it starts to accelerate its growth with Ann Arbor as its base. And the reason for relocating Ann Arbor were pretty self-evident for Vollmar and Koch. "Ann Arbor has a better start-up culture and vibe that we thought would be better for attracting talent," Vollmar says. Source: Jesse Vollmar, CEO & co-founder of FarmLogs Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Seelio secures $600K in seed capital, Menlo mentorship

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Economic Development

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January 30, 2013

Internet start-up Seelio has landed an investment from the Michigan Pre-Seed Capital Fund, which is part of a larger angel round worth slightly more than $600,000. The investment has allowed the downtown Ann Arbor-based company to expand its staff to 10 employees and two interns. It is now looking for strategic investors and has moved into the offices of Menlo Innovations, which is helping mentor the 1-year-old firm. "We're very proud to be based out of Ann Arbor," says Moses Lee, co-founder & CEO of Seelio. "We have a very good team that is committed to the state of Michigan." Seelio is developing a software platform that allows college students to showcase their portfolio of work. "We're able to document the entire story of a project and who you worked with," Lee says. The platform is currently being used in 800 college campus across the U.S., including the University of Texas, UCLA, MIT, Albion College, Eastern Michigan University, Wayne State University and the University of Michigan, among many others. Seelio plans to expand its geographic reach around the world with universities in Europe the next in line. "Some major universities are interested in this platform," Lee says. Source: Moses Lee, co-founder & CEO of Seelio Writer: Jon Zemke

Michigan Pre-Seed Capital Fund continues investment spree in ’13

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Economic Development

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January 30, 2013

Michigan Pre-Seed Capital Fund has struck again, investing $1 million into four local start-ups. The four start-ups include Fusion Coolant Systems, Local Orbit, New Eagle Products, and Seelio. Seelio, New Eagle Products and Local Orbit are based in Ann Arbor. Fusion Coolant Systems was launched in Ypsilanti and is now based in Detroit on the campus of Focus: HOPE. "The seeds that were planted several years ago are starting to bear fruit," says Skip Simms, senior vice president at Ann Arbor SPARK who oversees the Michigan Pre-Seed Capital Fund. "The ecosystem the state has created has really improved the quality of entrepreneur who is coming to us with better thought-out ideas and products that are further along." The Michigan Pre-Seed Capital Fund is a collaborative effort of Michigan's SmartZones to support product commercialization at local start-ups. It has awarded more than $19 million in seed funding to 83 Michigan companies. One of the early recipients was Compendia Bioscience, which was acquired by Life Technologies last fall. The Michigan Pre-Seed Capital Fund had its most aggressive year yet in 2012, making deals with 23 companies. Simms says he doesn't expect the fund to surpass that number again this year but there is more than enough demand from a plethora of quality companies. "It has been growing," Simms says. "It has been evolving. The good news is it has been evolving and snowballing in a good way." Source: Skip Simms, senior vice president at Ann Arbor SPARK Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Swift Biosciences lands $750K investment, launches 1st product

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Economic Development

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January 23, 2013

Swift Biosciences has scored a $750,000 Series A investment from the Michigan Accelerator Fund I, money that will help the life sciences start-up accelerate the commercialization of its products. "The extra financing will help us with product development and launch," says David Olson, CEO of Swift Biosciences. The Ann Arbor-based start-up is developing molecular biology reagents for research and diagnostic applications that provide new ways to examine disease-related genes. This technology is expected to help researchers analyze samples faster, at a higher volume, and at a lower price per sample. The 3-year-old company launched its first product (a consumable product for genetic analysis that helps detect mutations in things like cancer, with high sensitivity) last year and is set to launch more similar technologies this spring. Swift Biosciences has hired one person (a scientist) in 2012. It now employs 11 people and expects to add more people to its staff, but not in the next few months. "We do expect to expand but it will be later in the year and in 2014," Olson says. Source: David Olson, CEO of Swift Biosciences Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Tangent Medical Tech scores $8.6M in VC led by Arboretum Ventures

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Economic Development

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December 5, 2012

Tangent Medical Technologies has landed millions of dollars more in seed capital thanks to a $8.6 million Series B round. The seed-capital round was also lead by Ann Arbor Arboretum Ventures. "We're getting ready to commercialize the product," says Jeff Williams, CEO of Tangent Medical Technologies. The Series B round of venture capital comes on the heels of Tangent Medical Technologies receiving FDA 510(k) clearance for the NovaCath Secure IV Catheter System. Tangent Medical Technologies' product integrates a series of next-generation technologies 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. Williams declined to comment on how many people work at Tangent Medical Technologies but did say the company "has hired a few people" over the last year. Source: Jeff Williams, CEO of Tangent Medical Technologies Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor start-ups score big at Accelerate Michigan

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Economic Development

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November 28, 2012

Start-ups from Ann Arbor and those with close ties to the college town did quite well at this year's Accelerate Michigan Innovation Competition. The top three finishers in this year's business plan competition all hailed from cities outside of Washtenaw County but they all have roots in the Ann Arbor area. Algal Scientific and nanoMAG (the first and second place finishers) both got their start in Ann Arbor before moving to Plymouth and Livonia, respectively. They both still work extensively with Ann Arbor SPARK. East Lansing-based InPore Technologies (the third place finisher) is headed up by Gerry Roston, a serial entrepreneur that calls Saline home. Steve LeBeau, president of nanoMAG, praised the folks at Ann Arbor SPARK and at Accelerate Michigan with preparing his start bio-tech firm to do so well at the competition and be ready to raise a significant amount of revenue. He expects his start-up will be able to leverage its $100,000 cash prize from Accelerate Michigan into a seven-figure angel round. "In the middle of this (competition) you're a venture capital fund saying, 'Send me a packet about what's going on,'" LeBeau says. "And you have a 12-page packet (prepared and peer-reviewed as part of the competition) to send them." Other top placers at the Accelerate Michigan calling Washtenaw County home include: - Eco-Fueling, the Saline-based business won the advanced transportation prize worth $25,000 for its fuel-efficiency technology built for diesel engines. - Ornicept, the Ann Arbor-based start-up won the alternative energy prize worth $25,000 for its technology that monitors bird activity so wind turbine developers can make informed decisions. - Protean Payment, the Tech Brewery-based company won the products and services award worth $25,000 for its software that can combine every creditcard in a consumer's wallet into one card. Source: Accelerate Michigan Innovation Competition and Steve LeBeau, president of nanoMAG Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor-based VC Augment Ventures invests in LLamasoft

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Economic Development

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November 7, 2012

Augment Ventures is investing locally, making its second investment in one of downtown Ann Arbor's technology staples - LLamasoft. LLamasoft is a combination of a logistics firm and a tech start-up. Its software helps optimize resources and streamline the logistical process, allowing its users to hit their goals while achieving sustainability targets by tracking the global carbon foot print of complex supply chains. The company has been growing by leaps and bounds for years, but it recently raised $6 million to help accelerate that growth with Augument Venture participating in its seed capital round. "There is tremendous potential there both in terms of product launch and market capture," says Sonali Vijayavargiya, managing director & founder of Augment Ventures. "They're doing tremendously well. That's why we wanted to be involved with it. The downtown Ann Arbor-based venture capital firm launched last year as an early-stage venture capital fund. Its specialty is investing in clean-tech and IT start-ups. Those start-ups have defensible intellectual property, capital-efficient business models and global market opportunities. Its first investment came last year when it invested in Aperia Technologies. The San Francisco-based start-up is developing an automatic tire inflation device that should increase gas mileage, safety, tire life and profit margins (by 30 percent) in fleet operators. Augment Ventures is aiming to raise a $20 million fund by the end of next year. So far the four-member VC has raised 20 percent of it. Vijayavargiya says her company has enough dry powder that it is considering making as many as three investments over the next few months. "We are continuously getting deal flow," Vijayavargiya says. Source: Sonali Vijayavargiya, managing director & founder of Augment Ventures Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.