Venture Capital

Student-led investment fund invests in Ann Arbor’s Ambiq Micro

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September 8, 2010

The University of Michigan's Frankel Commercialization Fund is investing in Ambiq Micro, a U-M spin-off that specializes in making tiny, energy-efficient microprocessors.The student-led fund did not disclose the amount of the investment, but the Ann Arbor-based start-up expects to use the money to hire 4-6 people over the next year. More importantly, it will seek and attract customers for its technology."It’s a very important part of the sales process," says Scott Hanson, CEO and founder of Ambiq Micro. "It establishes credibility."The 9-month-old firm is developing energy-efficient micro-processors that dramatically extend the battery life of wireless devices. They can be utilized in several different applications, ranging from smart credit cards to sensors that control temperature to medical devices. Hanson expects to have the first engineering samples ready by next year and to launch the product by 2012.Ambiq Micro started with three founders and now has two employees and 3-4 independent contractors. It recently made its second hire. The Frankel Commercialization Fund, based at the U-M Ross School of Business, is the country's first student-led pre-seed investment fund, not to be confused with the school's venture capital fund: the Wolverine Venture Fund.Source: Scott Hanson, CEO and founder of Ambiq MicroWriter: Jon Zemke

Latest in Venture Capital

Ann Arbor’s Renaissance Venture Capital Fund raises $50 million

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Economic Development

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September 8, 2010

Downtown Ann Arbor is home to one of the more unique and promising venture capital funds in the U.S., now that the Renaissance Venture Capital Fund has closed out a $50 million fundraising round and is ready to start spreading around some seed capital.The 2-year-old VC fund, which also has an office in downtown Detroit, is a "fund of funds," which means it will primarily invest in other venture capital funds that will in turn invest in individual companies. Most states with these funds primarily supply them with public money. In contrast, the Renaissance Venture Capital Fund is made up of private money from local big-business institutions and led by the Business Leaders For Michigan."These investors stepped up to the plate and that isn't happening anywhere else in the country," says Chris Rizik, CEO of the Renaissance Venture Capital Fund. "DTE Energy, AAA, Blue Cross Blue Shield of Michigan, Huntington Bank. Those are Fortune 500 examples. They are stepping up and helping this state grow."The Renaissance Venture Capital Fund will invest in venture capital firms that are either based in Michigan or plan to invest in Michigan companies. It has already invested close to $6 million (for a total commitment of $20 million for future investments) into the likes of Ann Arbor's Arboretum Ventures and RPM Ventures and Kalamazoo-based T-Gap Ventures. Out-of-state VC firms that received funds include San Francisco-based 5AM Ventures, Houston's DFJ Mercury Ventures, Illinois-based MK Capital, and Florida's Arsenal Venture Partners. The last two are opening Michigan offices following the Renaissance Venture Capital Fund's investment. These firms have invested more than $23 million in 12 Michigan companies, creating about 200 new jobs. Those companies have leveraged that investment to receive over $146 million in further venture funding. The ensuing activity has also allowed the Renaissance Venture Capital Fund to disburse its first profits to investors.Rizik expects the fund will commit the rest of its $50 million over the next year or two. Those are deals that are expected to touch 100-150 companies in the state, thereby creating hundreds of new jobs, mainly rooted in the new economy. The 3-person fund, which is looking at adding interns next summer, expects to start fundraising for its next investment vehicle in 2012. Source: Chris Rizik, CEO of Renaissance Venture Capital FundWriter: Jon Zemke

Ann Arbor start-ups take $90M in VC funds year-to-date

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Economic Development

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September 1, 2010

Venture capital spending is up in Michigan, and Ann Arbor start-ups are proving to be king of the hill. Year-to-date, Michigan-based firms have attracted $123 million in venture capital investment, with Ann Arbor-based companies taking in about $90 million of the total. The biggest investment ($51.75 million) went to Cerenis Therapeutics, a bio-tech firm with twin headquarters in France and Ann Arbor that's composed mostly of ex-Pfizer employees."This is a testament to the quality of companies that Michigan is creating," says LeAnn Auer, executive director of the Michigan Venture Capital Association.The total dollar amount invested is up 35 percent compared to 2009 year-to-date. However, the number of deals is lower, with 12 by August of last year and 10 so far this year. Life science firms took in the biggest chunks, with 57 percent of the total investment dollars last year and 75 percent so far this year. Cleantech firms were the only other ones to capture double-digit shares over each of the last two years. Other firms, including IT, received token amounts.The jump in venture capital investment can be attributed to economic improvements over the last year. A double-digit recession could force a drop in those numbers, Auer says, but barring that she expects to see a steady increase in the near future."Over the last few years we have had a couple of investment firms that have capitalized," she says. "Now they're being active."Source: LeAnn Auer, executive director of the Michigan Venture Capital AssociationWriter: Jon Zemke

Ann Arborites return to launch Resonant Venture Partners

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Economic Development

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September 1, 2010

The University of Michigan's Wolverine Venture Fund is supposed to serve as a real-life proving ground for Ross School of Business students aiming for a career in venture capital. It's now serving as the launching pad for a local venture capital start-up - Resonant Venture Partners.Two U-M MBA students, Michael Godwin and Jason Townsend, are using their experience with the $5.5 million student-run fund as a primary leg for their new Ann Arbor-based VC firm to stand on. The other leg is the two Michigan natives' entrepreneurial experience in Silicon Valley before they decided to return home and set up their own shop."We came back to get our MBAs and enter the venture capital world," says Jason Townsend, partner of Resonant Venture Partners. "There is opportunity to enter the venture capital industry here. On the coasts, the venture funds are being culled."Resonant Venture Partners recently made its first investment, teaming up with Silicon Valley-based True Ventures to invest $1 million in Ann Arbor-based Scio Security. The VC firm has attracted two top names to its board in EDF Ventures' Mary Campbell and Tom Kinnear, managing director of the Wolverine Venture Fund and head of U-M's Zell Lurie Institute.Godwin and Townsend have a $10 million fundraising target over the next 18 months. They hope to stay planted in Ann Arbor and have $100 million under management within the next decade. They see a steady pipeline of high-quality start-ups coming from the University of Michigan and its office of Tech Transfer. "We're hitting the investment trail hard right now," Townsend says.Source: Jason Townsend, partner, Resonant Venture PartnersWriter: Jon Zemke

Swift Biosciences nails down $3M in VC

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Economic Development

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August 18, 2010

Usually a few million dollars in venture capital doesn't go all that far with life sciences start-ups, but Swift Biosciences expects to stretch its $3 million in seed capital all the way to commercialization."We expect to have products ready for the market with this money," says David Olson, president and 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 1-year-old firm started with two people and now employs four. It is in the process of hiring a fifth. It expects to make two more hires within the next six months as it ramps up research, development, and commercialization of its product. Houston-based DFJ Mercury led the latest round of fundraising and helped form the company at its outset.Source: David Olson, president and CEO of Swift BiosciencesWriter: Jon Zemke

Start-ups Ergun Technology and Local Orbit score microloans

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Community Development

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August 11, 2010

Start-ups from Ann Arbor and Ypsilanti took two of the three loans announced by the Michigan Microloan Fund Program earlier this week.Ypsilanti-based Ergun Technology and Local Orbit (Ann Arbor) received loans, along with Detroit Electric. The three start-ups will split $140,000 in funding. Each microloan runs anywhere between $10,000 and $50,000. Own is the principal product for Ergun Technology. Own connects cash registers to the Internet, providing store owners real-time remote access to their transactions. The 4-person firm plans to use its loans to complete Beta testing of its product and begin marketing it to coffee shops across the state. "Our goal is to have 200 locations using our system by the end of 2011," says Verdi Erel Ergun, president of Ergun Technology and a former eatery owner. Local Orbit is creating a web platform that simplifies the process of buying food directly from local farmers for restaurants, institutions, and consumers. The state-created Michigan Microloan Fund Program provides seed capital to growing new economy start-ups. The $1.4 million program, which is run by Ann Arbor SPARK, became instantly popular because of the lack of financing available in the wake of the financial crisis. Source: Verdi Erel Ergun, president of Ergun Technology and Ann Arbor SPARKWriter: Jon Zemke

Life Magnetics spins out of U-M, lands investment from Arboretum Ventures

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Economic Development

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August 4, 2010

Life Magnetics was a combination of technology and an idea to commercialize it before Arboretum Ventures gave both a chance at life earlier this month.The Ann Arbor-based venture capital firm invested an undisclosed amount in the University of Michigan spin-off. The two-person start-up will use the funds to begin clinical testing on an infection test and build out its management team to 5-10 strong over the next year."This money is helping us launch the company," says Brandon McNaughton, founder and chief technology officer of Life Magnetics. "We're looking for some laboratory space now."Life Magnetics' technology provides a rapid diagnostic test for bacterial infections, providing both the identity of the bacteria and recommendation of an antibiotic for treatment. "What that translates to is you get the best antibiotic as soon as possible," McNaughton says.Source: Brandon McNaughton, founder and chief technology officer of Life MagneticsWriter: Jon Zemke

Ann Arbor’s Cerenis Therapeutics ropes in $51.7M VC investment

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Economic Development

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July 28, 2010

Cerenis Therapeutics has landed $51.7 million in venture capital, making it another Ann Arbor company that has hit an investment home run in an area that is on a hit streak.The 5-year-old firm, composed mainly of former Pfizer employees, will use the money to expand its operations here and in France. It employs 26 people that are evenly split between the two locations, with the Ann Arbor office giving work to another four independent contractors. Three positions have been added over the last year, with an expected ramp-up in hiring with this new infusion of capital."The funding will allow us to expand here and in France," says Bill Brinkerhoff, COO of Cerenis Therapeutics.Cerenis Therapeutics is working on creating and commercializing the first synthetic HDL, which is the so-called good cholesterol. The idea is to create a new way to remove plaque from heart tissue. The product could be on the market as soon as 2015."We're going to see if it can regress plaque rapidly in patients who have had a heart attack," Brinkerhoff says. "We have finished Phase 1 and this will pay for Phase 2, which is proof of concept."Source: Bill Brinkerhoff, COO of Cerenis TherapeuticsWriter: Jon Zemke

Delphinus moves to Ann Arbor, invests $6.4M, to create 107 jobs

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Community Development

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July 21, 2010

Delphinus Medical Solutions continues its rapid march from research spin-off to high-powered start-up. Last we heard, it had collected $8 million in venture capital earlier this year. Within the last week, it scored six-figures' worth of state tax credits, enabling it to invest $6.4 million and create 107 jobs over the next five years."We plan on hiring between 10-20 people in the first year," says Bill Greenway, CEO of Delphinus Medical Solutions.The Michigan Economic Development Corp has agreed to grant the Karmanos Cancer Institute spin-off a five-year tax credit worth $779,118 to move to the Michigan Life Science & Innovation Center in Plymouth. That gave the Ann Arbor SPARK-run wet lab incubator the edge over competing sites in Boston and Chicago. Delphinus Medical Solutions' principal product is SoftVue, an alternative to mammography for breast cancer detection, risk evaluation, and treatment monitoring. SoftVue can effectively differentiate benign from malignant masses in breasts, helping eliminate false positives and reducing unnecessary biopsies. It can also accurately measure breast density, a known risk factor for developing breast cancer, as well as detect many early stages of cancer in women with dense breast tissue, which is often not picked up by mammography. SoftVue works by surrounding a breast submerged in warm water with an ultrasound ring that captures detailed, three-dimensional images with sound waves. The results are similar to an MRI, but the procedure takes only a few minutes and costs much less. The procedure was the inspiration for the company's name, which is Latin for dolphins."Because our system uses sound waves and happens in water we thought it was a neat name," Greenway says.Source: Bill Greenway, CEO of Delphinus Medical TechnologiesWriter: Jon Zemke

Accuri Cytometers locks down $6M in financing, adds 25 positions

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Economic Development

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July 21, 2010

Accuri Cytometers, an A-list start-up from Ann Arbor, is pulling in seven figures' worth of seed capital this month.The company is bringing in $6 million in financing to be used to take its Accuri C6 Flow Cytometer into clinical trials and push it towards commercialization. That should allow it to continue growing at a rapid clip. The company has hired about 25 people over the last year, expanding its staff to 87 employees and a few independent contractors and interns. "Our revenue is growing rapidly," says Jeff Williams, CEO of Accuri Cytometers. "Our sales are growing rapidly."Accuri Cytometers, a University of Michigan spin-off, specializes in making the cytometer systems that measure T-cell counts (among other things), which is an instrumental tool in tracking and treating diseases like AIDS and cancer. It is a research field with lots of room to grow in both the near and long term.The firm has been on a tear in recent months, selling its products worldwide. It has attracted a number of new customers."We expects our growth rate to continue," Williams says.Source: Jeff Williams, CEO of Accuri CytometersWriter: Jon Zemke