Venture Capital

Ann Arbor’s EDF Ventures records profitable exit

By Newsroom

●

July 21, 2010

Ann Arbor's EDF Ventures just added another solid base hit to its scorecard, recording a profitable exit from the acquisition of Greenplum.The Silicon Valley-based firm provides disruptive data warehousing technology, a key enabler of "big data" clouds and self-service analytics. It is being acquired by EMC Corp so it can beef up its information infrastructure business.This is the first profitable exit for EDF Ventures since Becton-Dickinson acquired HandyLab last fall. The downtown-based firm, which employs seven people, has 15 active companies in its portfolio, including local star start-up Lycera. Of those 15 firms, five are based in Michigan. "We have several promising companies in our portfolio," says Mary Campbell, managing director of EDF Ventures.Source: Mary Campbell, managing director of EDF VenturesWriter: Jon Zemke

Latest in Venture Capital

Xconomy takes a close look at U-M’s Wolverine Venture Fund

By Newsroom

●

Economic Development

●

June 23, 2010

Business students at the University of Michigan aren't making venture capital investments with monopoly money. They have millions of dollars at their disposal and they're making some smart investments in local start-ups.Excerpt:Tom Kinnear says he is a great "theoretical golfer." It is the implementation that is lacking.In the same way, business students who learn how venture capital works without ever investing real money in real companies may be at a disadvantage, Kinnear says. That's why, 11 years ago, Kinnear and colleagues at the University of Michigan's business school launched the Wolverine Venture Fund, what he calls the country's first student-led venture capital initiative."The way I look at it is you can theoretically teach how to do this, which is interesting, but it's like an athlete being theoretically taught how to play a sport. You've really got to play the sport. So, this is the playing of the sport," says Kinnear, who is executive director of the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan's Ross School of Business and managing director of the Wolverine Venture Fund.Read the rest of the story here.

Plymouth Venture Partners raises $16M, adds 2 partners in Ann Arbor

By Newsroom

●

Economic Development

●

June 9, 2010

Plymouth Venture Partners has finished the first round of fundraising for its latest capital call, bringing in $16 million in new seed capital funding.The downtown Ann Arbor-based venture capital firm plans to raise $35-$40 million in fresh investment funds by the end of this year. That money will be directed at local start-ups in the southeast Michigan and northern Ohio areas."We expect to make 20 investments in this fund," says Mark Horne, CEO of Plymouth Venture Partners. "We expect to make two to four in 2010."With that goal in mind the company has doubled the number of partners from two to four. Its staff rounds out to five people and a couple of interns from the University of Michigan. Plymouth Ventures made 29 investments as of 2009, and all of the companies are based in the Great Lakes region. Horne says the firm likes to keep its investments within a reasonable car ride of their Ann Arbor home base, which is a common strategy in the venture capital and investment world. He adds that Michigan is a "target rich environment" so the firm doesn't have to look too far to find worthy candidates."The region is so under-served in terms of capital," Horne says. "There are a lot of opportunities for investment right here."Source: Mark Horne, CEO of Plymouth Venture PartnersWriter: Jon Zemke

Mobile Sign Language wins elevator pitch competition at SPARK East

By Newsroom

●

Community Development

●

June 9, 2010

Entrepreneurs came, they pitched and they went away with a better idea of how to win support and even funding for their fledgling businesses at the Ann Arbor SPARK elevator pitch competition last week.Six entrepreneurs from six local start-ups gave their best pitch on why their business idea will be the next big thing. Jason Gilbert of Mobile Sign Language Systems landed the prize, $50,000 worth of Ann Arbor SPARK services, for his pitch for creating sign language software for smart phones."Jason did a great job with the presentation," says Paul McCreadie, a principal of Arboretum Ventures (an Ann Arbor-based venture capital firm) who served as one of the judges. "He did a great job of conveying the frustration in the deaf community."McCreadie's smart phone application translates spoken English into a video of sign language in real time. It's designed for deaf people who struggle to communicate with those who don't know sign language. The short-term goal is to create test program for the market. The long-term goal is to be acquired."We have a small version of what our product will be," Gilbert says.Other start-ups giving pitches included a firm that creates an in-rack air conditioner for data centers (Aeradigm), a point-of-sale system for independent coffee houses (Own), an ethanol formula for diesel fuel (Eco-Fueling) and a test that will help parents know the best time to conceive in order to achieve the preferred gender of their next child (Urobiologics).Many of the businesses have hopes of big dollar acquisition in a few years and one, Eco-Fueling, is a spin-off of an Australian company looking to break into the North American market. Some of the entrepreneurs stumbled during their pitch delivery while others commanded the room with the confidence of their product. "The reason it took us so long (to choose the winner) is because we had five good proposals," says David Mielke, dean of the Eastern Michigan University School of Business.Source: Paul McCreadie, a principal of Arboretum Ventures, David Mielke, dean of the Eastern Michigan University School of Business and Jason Gilbert of Mobile Sign Language SystemsWriter: Jon Zemke

Final 5 start-ups chosen for SPARK East’s elevator pitch competition

By Newsroom

●

Community Development

●

May 26, 2010

Scott Olson doesn't know what to expect when the elevator pitches fly at Ann Arbor SPARK's elevator pitch competition in Ypsilanti next week, but the judge of the competition does anticipate the recently chosen five finalists will deliver some surprises.Whether the pitches are well-rehearsed or works-in-progress, ultimately he is looking for a compelling story, comprehensive thinking and poise in delivery."I expect the range will be pretty wide," says Olson, who is the vice president and general manager for MedArray. "There will be those who have practiced for a while and those who haven't. But I am always surprised. When you put someone in front of a crowd you don't know how they'll react."An elevator pitch is a short, persuasive speech an entrepreneur gives about their company or product to an investor in the same amount of time as an elevator ride(a few minutes). The idea is to quickly convince potential investors or customers to take interest. The pitch competition, held at the SPARK East Incubator in downtown Ypsilanti, will showcase five innovation-based entrepreneurs giving their best argument for their start-ups on the afternoon of June 4. The winner will receive a free year at the Ann Arbor SPARK East Incubator in downtown Ypsilanti and up to $50,000 in business-accelerator services. That includes everything from mentoring to legal services to a membership in the Ann Arbor Ypsilanti Chamber of Commerce. The five finalist include: Eco-Fueling will present its proven solution to co-fuel diesel engines with renewable ethanol. Their technology is targeted at the 6 million diesel trucks, none of which currently use a renewable fuel on the road today.Aeradigm will present its in-rack air conditioner for data centers. Over 10,000 U.S. data centers are in danger of generating more heat than can be dissipated; Aeradigm will cool servers efficiently and reduce overall energy load by harvesting waste heat for power.Mobile Sign Language Systems will present its smart phone software that translates spoken English into a video of sign language in real time. The software is designed to help deaf people, who often struggle to communicate with their counterparts in the hearing world, most of whom do not know sign language. Urobiologics will present its UroGender Test Kit. Economic and social conditions are compelling married couples to have a small family, preferably of two children, one of each gender. UGT will help couples to plan and have gender specific conception the natural way.Own will present its combined Web and hardware Point of Sale (POS) system for coffeehouses. Own replaces cash registers or Software POS systems at the point of transaction. Source: Ann Arbor SPARK and Scott Olson, who is the vice president and general manager for MedArrayWriter: Jon Zemke

Ann Arbor firms secure investments from First Step Fund

By Newsroom

●

Community Development

●

May 26, 2010

Ann Arbor SPARK-related firms have made a strong showing in the first round of financing from the First Step Fund.Three of the seven firms that received five-figure loans either hailed from Ann Arbor or have a direct connection to Ann Arbor SPARK. Those three firms include Current Motor Company, Bandals and InfoReady for Grants. The other four start-ups came from Detroit's TechTown incubator, which also controls the First Step Fund."skjfh," says skdjf. "skahjf."Invest Detroit and Ann Arbor SPARK, which runs the Michigan Micro Loan Fund, created the First Step Fund. The idea is to create a funding source for local start-ups starving for seed capital. The current credit crisis has resulted in traditional lending institutions cutting back on investment capital.Each loan averages about $50,000. They are either a short-term loan or a convertible note that will help younger start-ups get their feet underneath them. The money is usually used to help push forward product development or expand inventory.The First Step Fund expects to make 40 loans this year. The companies receiving the loans are picked by a board independent of TechTown. The next round of financing is not far away."We next investment will be in mid June," says Mahendra Ramsinghani, managing director of the First Step Fund and the husband of one of the co-founders of Concentrate's parent company Issue Media Group.Source: Mahendra Ramsinghani, managing director of the First Step FundWriter: Jon Zemke

Ann Arbor scores most of Mich 21st Century Jobs Fund capital

By Newsroom

●

Community Development

●

May 26, 2010

Millions of dollars from the Michigan 21st Century Jobs Fund were intended to be spread across the state but Ann Arbor-based start-ups have brought home the lion's share of that capital.Excerpt:Though Michigan's 21st Century Jobs Fund is supposed to benefit the entire state, most of the dollars have gone to recipients in Ann Arbor. Of the 27 companies that took advantage of loans they were awarded in the fund's first business competition in 2006, two-thirds are based in the college town.Read the rest of the story here and more about state-sponsored investment funds here.

Q&A with Mike Finney about Ann Arbor SPARK’s 5-year anniversary

By Newsroom

●

Community Development

●

May 26, 2010

Ann Arbor SPARK is celebrating its fifth birthday this month and looking forward to cementing the region as Michigan's go-to entrepreneurial ecosystem.The small business accelerator agency and its handful of incubators have established themselves as the heads of their class in Michigan, helping start-ups to get started and small businesses to ramp up their plans. Expect to see more of that over the next five years, says Ann Arbor SPARK executive director Mike Finney, who agreed to answer a few questions over email about how he sees that playing out.Ann Arbor SPARK spent its first five years helping establish Washtenaw County as one of the Midwest's premier entrepreneurial ecosystems. What will its focus be over the next five years?Over the past five years the Ann Arbor region has become a leading entrepreneurial location, but we still have much work to do before declaring victory. We will continue to focus on becoming a place where talent, technology, funding, entrepreneurial risk taking, success celebration and connectedness to universities and private companies are the norm. We also see a need for much more aggressive business expansion and attraction efforts. The use of social networking, talent enhancement and other marketing tactics will become key tools in our economic development toolkit. Finally, we need to learn from and share our learnings with other communities throughout Michigan and SE Michigan in particular. Millions and millions of dollars in venture capital have flowed into the Ann Arbor area over the last few years. How close is the area to reaching some sort of critical mass for investment capital, and should we be looking at other metrics to let us know when our entrepreneurial ecosystem becomes sustainable?The Ann Arbor region is definitely on the radar screen of local and national venture capital investors. Our challenge over the next five years is to clearly establish the region as a VC hot spot…where start-up companies thrive and VC funding is readily available from multiple sources. We view the recent efforts by the state of Michigan to increase VC investing as critical to achieving this objective. Getting experienced CEO's to actively search for opportunities in our region is a key indicator of success. We also see a need for programs intended to develop, retain and bring entrepreneurs to the region.Micro loan funds have proven to be quite popular with local small businesses in southeast Michigan, especially since traditional credit lines have been mostly dormant. What type of future do you see for these micro loan funds a few years down the line if and when the credit markets return to normal?The popularity of the micro loan program has exceeded our expectations. It was intended to fill the "gap" in funding available to start-up companies that had traditionally been provided by angel investors and financial institutions. As capital markets return to normal, we think angel investors and banks will fill the gap. Our expectation is that markets with begin to recover by early 2012. We plan to raise another round of funding ($2 – 2.5 million) to cover the next two years.If you could change one thing about this region or import one idea or mindset, what would it be?At SPARK, our immediate goal is to promote economic development in the Ann Arbor region. But our larger focus is ensuring long-term growth and viability for the entire state of Michigan — something that can best be achieved through a process we call Open Source Economic Development®. Economic development in Michigan should take a page from the playbook of the ever-evolving software industry. Its open source philosophy – providing the source code that drives development – is a model that can propel Michigan's success in growing, retaining, and attracting business. Instead of viewing other communities within Michigan as competition for business location and expansion, we view the world as the primary threat to our economic prosperity. In today's global market where companies can transfer business and operations to technology corridors like Boston, San Francisco and Austin Texas, transformational thinking in economic development is a necessity.Source: Mike Finney, executive director of Ann Arbor SPARKWriter: Jon Zemke

Demands from local VC increase with demand for investment

By Newsroom

●

Economic Development

●

May 19, 2010

Expectations for start-ups always go up when the venture capital cash starts to roll in. These days that cash is coming with more and more conditions, according to locals in VC game.Excerpt:Startup companies are being forced to jump through more hoops and agree to more concessions to attract the few investors who are dangling dollars in the midst of a funding crunch, experts said this week at the Michigan Growth Capital Symposium in Ypsilanti.The national economy is gradually recovering from the global financial crisis, but investors who survived the turmoil are scrutinizing potential deals more intensely and embracing caution.That means that Ann Arbor’s tech startup companies need to consider agreeing to unattractive deal terms to secure private financing.Lipitor co-discoverer Roger Newton, CEO of Plymouth Township-based Esperion Therapeutics, said investors are no longer willing to provide one major round of funding all at once. Instead, they are choosing to require that startup companies achieve specific milestones that trigger access to additional dollars."There's not a lot of wiggle room in how much money they’re going to give you," Newton said.Read the rest of the story here and more about state of Michigan's venture capital community here.

PitchCorner.com hopes to become online destination for start-up auditions

By Newsroom

●

Economic Development

●

May 12, 2010

Every entrepreneur wants their start-up to become the next big thing. PitchCorner.com wants to become the place where the next big thing, and a lot of smaller ones, are found.The Ann Arbor-based website provides a space for entrepreneurs to post a video of their elevator pitch, a short speech meant to capture the interest of an investor or customer. The idea is to help them fine tune their pitches and give investors a clearing house to see what is out there."You learn so much by seeing somebody or hearing their conviction," says Rick Galdi, co-founder of PitchMedia, which owns Pitchcorner.com. "You get much more from it than what you would learn by reading a piece of paper."Galdi would know. He is one of Michigan's most prominent angel investors and president of the Great Lakes Angels. He and Mike Brennan decided to make a go of it with PitchCorner.com last year. It has since debuted at the 10th Annual Collaboration for Entrepreneurship in Ann Arbor in January."Being able to pitch the company is something any entrepreneur should be able to do," Galdi says. "If you're not ready to do it in person or on camera then you're probably not ready."The four-person start-up lets anyone surf the site. Those who want to post their pitches can do so for a $9.95 month fee. That will also allow them to post their logo and an executive summary of their business or product. The idea is to offer a cost-effective resource for start-ups where every dollar not only counts but needs to be stretched."It's gaining momentum slowly," Galdi says. "I didn't expect it to explode overnight because it's such a new idea. I had to temper my expectations a bit."Source: Rick Galdi, co-founder of PitchCorner.comWriter: Jon Zemke