Innovation & Job News

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Reconsider launches pilot for local biz investing awareness

Reconsider is starting a big to help channel more local investment dollars into local small businesses.

The Ypsilanti-based firm is teaming up with the Washtenaw County Office of Community and Economic Development to launch the venture LOCAL, an initiative to raise awareness that people can invest in local companies and see comparable returns to more traditional investment vehicles, like stocks and bonds.

"It's a local investing awareness and education campaign," says Angela Barbash, founder of Reconsider. "The idea is to get some companies to do some fundraising online."

The venture LOCAL campaign aims to accelerate investment in Washtenaw County-based businesses by highlighting more of those opportunities. For instance, the effort by the Tecumseh Brewing Co to raise $120,000 in seed capital.

"What would Ann Arbor look like in five years if there was an infusion of local capital?" Barbash says.

Reconsider specializes in research and education about community capital and social entrepreneurship. Barbash, a veteran financial advisor, works with a team of six independent contractors. She is currently interviewing two Shifting Gears program participants as potential interns.

Barbash is optimistic that the venture LOCAL campaign will be successful in Washtenaw County over the next few months, opening the door for its expansion across Michigan.

"It could be a turnkey solution for other communities to use," Barbash says.

Source: Angela Barbash, founder of Reconsider
Writer: Jon Zemke

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Stratos ramps up staff for new Ann Arbor office

The startup formerly known as Protean Payment (freshly rebranded at Stratos) has a new name, a new pool of money to draw from, and is looking for a new home in Ann Arbor to accommodate its growth.

Stratos announced last week that it raised $5.8 million in a Series A round. Silicon Valley-based Toba Capital Partners led the round with Ann Arbor-based Reasonant Venture Partners participating, along with two other venture capital firms.

Stratos is working on disrupting the way people pay for everyday purchases, but not too much. It is making a new card that combines all of the cards in your wallet (credit, debit, loyalty) into a bluetooth enabled device. The idea is to simplify how a person pay for things without having to build a whole new payment infrastructure (and learning curve) around it. It is also the reason behind the larger-than-usual-by-local-startup-standards initial capital raise.

"We're a software company and a hardware company, so we have an increased capital requirement," says Thiago Olson, co-founder & CEO of Stratos.

Stratos is still working on developing its technology and Olson declined to give some details about it, such as when it's anticipated to launch and how many people work for the startup today. He did say the company is looking to hire 10 people right now and expects to keep hiring for the foreseeable future.

"We're scaling on all fronts," Olson says. "It's going to be constant hiring on all fronts."

Stratos currently works from an office building in Kerrytown that it shares with Duo Security and Reasonant Venture Partners. Duo Security, also in the midst of a hiring spree, is moving to a bigger office in downtown Ann Arbor this fall. Stratos is evaluating whether his firm will expand into the newly vacated space or elsewhere as it looks for a space that could house between 40-50 people.

"We're expanding and we're going to be moving into a new office and that's one of the places we're looking at," Olson says.

Source: Thiago Olson, co-founder & CEO of Stratos
Writer: Jon Zemke

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Liberty Title adds jobs as real-estate market rebounds

This last winter with its polar vortexes forced real-estate companies like Liberty Title to go into hibernation for a few months to deal with what became a literally frozen real-estate market. Things were so slow during December, January, and February that it was almost like the company took the quarter off.

"We had a big hole in the first quarter to dig out of," says Tom Richardson, general counsel of Liberty Title.

That hasn't stopped the Ann Arbor-based company from realizing some solid gains this year. It helps that the local real-estate market has heated up and property values have risen with it. Richardson points out that houses that sold for $60,000 a year or two ago are not selling for $100,000, and he sees price gains continuing.

"I don't see any slowdown," Richardson says. "Interest rates seem like they will stay flat in 2015 and the economy in southeast Michigan is strong."

That has allowed Liberty Title to consolidate some gains across Metro Detroit and add staff. The company has moved its Brighton office into a new building near the heart of the city's downtown. It has hired six people, expanding its staff to 98 employees. Those new hires include new office managers in Birmingham and Novi.

"We picked up some highly experienced people," Richardson says.

Source: Tom Richardson, general counsel of Liberty Title
Writer: Jon Zemke

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Coherix growth continues on strength of global work

Talk to Dwight Carlson about manufacturing for any length of time and he will tell you about how it has become a global venture. The founder & CEO of Coherix, which makes software for advanced manufacturing, knows because so much of the revenue for his Ann Arbor-based business comes from well-outside of its hometown's borders.

"We are truly global," Carlson says. "More than 75 percent of our advanced manufacturing technology is shipped outside of the U.S., and that is only going to increase."

Coherix's principal technology provides high-speed, high-definition 3D measurement and inspection services to manufacturers. The software is designed to streamline a manufacturer’s production capability by finding efficiencies through high-tech, optical-based measurement and inspection of the manufacturers assembly processes.

The 10-year-old company has operations in China and Japan. It also has subsidiaries in Singapore and Europe, all of which have consistently grown in recent years.

"Europe is starting to take off with sales to Opel and Ford," Carlson says.

Coherix has hired five people in the U.S. over the last year. It currently has a staff of 40 employees and the occasional intern in Ann Arbor. To Carlson, there is no better place to do the white collar side of the business.

"It's an excellent place to do high-tech R&D," Carlson says. "There is a reason why Toyota has $100 million invested in R&D here."

Source: Dwight Carlson, founder, chairman & CEO of Coherix
Writer: Jon Zemke

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Warmilu finds economic soft spot with warming blankets for seniors

The team at Warmilu has discovered that nothing is as easy as it seems, especially when you're trying to create a new product from scratch.

The downtown Ann Arbor-based startup has been working to bring its warming blanket technology to market for the last year but has run into snags along the way, such as getting labeling and packaging right. However, the 3-year-old company is still looking to launch sales of its blanket later this fall, perhaps as soon as November.

"That's our goal, but we know it’s an ambitious goal," says Grace Hsia, CEO of Warmilu.

Warmilu represents its blanket as a non-electric heating wrap that acts instantly, is reusable, and microwave safe. Hsia and her two co-founders (all University of Michigan graduate students) developed the blanket with the idea of keeping newborns warm. It has since grown the idea to include using it for the elderly and people dealing with pain or soreness from ailments like arthritis.

"There is a robust home-heat-care market," Hsia says. "It's mainly men and women over the age of 50."

Warmilu and its team of five people (it recently hired a marketing and creative director) are hoping to use the revenues from its initial sales to help fund the further development of the blanket for neonatal care. The startup is also working to raise a seed capital round of $250,000 to fund the development of the technology, but Hsia and her partners would prefer to continue bootstrapping the venture by growing its sales beyond Michigan.

"We want to reach out and build that Warmilu presence not only in Ann Arbor but globally," Hsia says. "We would like to self-finance our growth."

Source: Grace Hsia, CEO of Warmilu
Writer: Jon Zemke

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U-M student-led VCs look for a few good startup investments

Opportunities for finding seed capital for local startups are anything but in short supply this fall. A broad range of financial sources are looking to invest tens of thousands of dollars in promising ventures, such as the University of Michigan’s Social Venture Fund and the Accelerate Michigan Innovation Competition.

Three student-led venture capital funds at the University of Michigan are putting out calls for applications. The VCs are looking to sink $50,000 to $100,000 per investment, and they are looking for a broad range of startups to evaluate.

"We invest in 1-2 companies per year," says Joanna Herrmann, director of investments for the University of Michigan’s Social Venture Fund. "Last year we invested in two companies."

The other two student-led funds (the Wolverine Venture Fund and the Zell Lurie Commercialization Fund) are looking to make investments of similar sizes in a wide variety of ventures.

This is the fifth year for the university's Social Venture Fund. It has made five investments in that time, including an investment in downtown Detroit-based software mapping startup Loveland Technologies, which has hired three people in recent months. The Social Venture Fund looks for companies that are for-profit and aim to make a social or environmental impact.

"We try to cast a really wide net," Herrmann says.

Bigger money is at stake at the Accelerate Michigan Innovation Competition this fall. The annual business plan competition offers prizes that are often worth $10,000 or more. Top prize is $500,000. Startups from Washtenaw County, and the U-M specifically, have historically fared quite well, often taking the top spot and walking away with six figures in seed capital. For information this year’s Accelerate Michigan Innovation Competition click here.

Source: Joanna Herrmann, director of investments for the University of Michigan’s Social Venture Fund
Writer: Jon Zemke

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U-M Tech Transfer accelerates invention production

The University of Michigan has set another round of records this year when it comes to inventions and innovations.

The university's Office of Technology Transfer reported 439 new inventions for the last fiscal year, which us up from 421 the previous year. U-M also recorded 148 option and license agreements (up from 108 a year ago) and launched 14 startups.

"It has been a steady (upward) trend for the last five years," says Ken Nisbet, associate vice president for research and tech transfer at the University of Michigan.

Now each invention doesn't equate a new startup. Oftentimes a startup developing a new technology platform will be based on a handful of patents. Nisbet estimates that about 25 percent of new inventions are robust enough to become their own startups.

"These inventions are a whole range of ideas," Nisbet says. "It could be a platform technology that is big and broad or a smaller piece of technology that a company can enhance."

He adds that each newly created startup spun out of the university requires much more complex technology than say a software developer coming up with a new mobile app. Because of the complexity of it means that more than a dozen new startups launched each year puts U-M toward the more prolific end of research university technology transfer programs. For instance, MIT normally leads the way and it routinely notches about 20 new startup launches each year.

"Fourteen is a pretty robust number when you consider the type of startup it is," Nisbet says.

The University of Michigan has 22 startups currently housed in its Venture Accelerator on the North Campus Research Complex. Each of those startups employs a couple of people. For instance, Exo Dynamics is a U-M spinout that is developing a back brace for the 21st Century. It currently has a team of five people working on the venture.

Check out a video promoting U-M’s Tech Transfer program here.

Source: Ken Nisbet, associate vice president for research and tech transfer at the University of Michigan
Writer: Jon Zemke

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Huron River Ventures optimistic about local deal flow

Huron River Ventures recently announced its investment in Cribspot, leading a $660,000 seed round in the Ann Arbor-based startup.

An Ann Arbor-based venture capital firm investing in a Michigan-based startup isn't that unusual. However, it's becoming much more par for the course for Huron River Ventures. The Kerrytown-based venture capital firm has made 12 investments since it launched in 2010, and is on course to make a couple more before the end of the year.

"We are almost exclusively looking at Michigan-based companies right now," says Tim Streit, partner of Huron River Ventures.

That includes two that are in the final stages of due diligence before a potential investment. Streit says that startups in the local entrepreneurial ecosystem are maturing after several years of development. It means that the team of nearly half a dozen people at Huron River Ventures don’t have to travel far to make investments.

"We are seeing an exceptional deal floor out of the state of Michigan right now," Streit says. "We haven't had to look very far out of state to find companies."

Cribspot is latest example of it. The 1-year-old startup was launched by University of Michigan students who were looking to make the process of finding off-campus rental housing more efficient. The startup, which also has an office in downtown Detroit, went through the Bizdom program to help it sharpen its business plan.

"It's a great example of how the world is shifting," Streit says.

Source: Tim Streit, partner with Huron River Ventures
Writer: Jon Zemke

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Hannigan Insurance consolidates offices in new Ann Arbor HQ

Hannigan Insurance is consolidating its operations into a new office in Ann Arbor, a move that is bringing a handful of new jobs to Tree Town  - with the promise to create dozens more in the next few years.

Hannigan Insurance is both a technology company and national insurance brokerage. Its web-based distribution platform provides insurance options for people who are looking for everything from automotive insurance to renters insurance. The platform also offers similar services in the financial industry. Because the company is primarily doing online work, it meant positioning itself for growth by setting up show where knowledge workers want to live and work.

"For us it’s all about attracting top talent," says Brian Hannigan, CEO of Hannigan Insurance.

Hannigan Insurance has offices in Clinton Township and Ann Arbor. It employs five at each office. It has hired four people over the last year, primarily insurance agents.

"We wanted to pick a spot," Hannigan says. "We looked at spots like Royal Oak, Birmingham, and downtown Detroit. We already had a facility in Ann Arbor and choose to consolidate there."

Hannigan Insurance is looking to go through a period of fast growth over the next few years. It’s opening an customer retention and acquisition center in Ann Arbor in November that will provide space for it grow to from 10 people to 25 before the end of the year. It currently has 15 open positions for insurance agents and software developers.

"We have a three-year plan to scale up to 75 jobs," Hannigan says. "We're going to grow rather quickly."

The Michigan Economic Development Corp is providing Hannigan Insurance with a $400,000 Michigan Business Development Program performance-based grant to execute the move. Ann Arbor SPARK also helped broker the deal.

Source: Brian Hannigan, CEO of Hannigan Insurance
Writer: Jon Zemke

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Try2See app works to better connect people, places, things

Lots of startups are trying to master the 21st Century version of customer loyalty programs. A new Ann Arbor-based startup, Try2See, thinks it has found the way to do it.

The 1-year-old startup has come out with a mobile app that utilizes QR codes and smart phones that enable customers, businesses and locations to better connect and keep track of who does what where.

"We're looking for a way to automate that process," says Barry McDonald, founder of Try2See.

The general idea from the three-person team is to enable customers to swipe in their purchases at local stores with the scan of a QR code at the establishment. That way customers don’t need to carry an extra card to scan or wait for a cashier to punch a paper card. All of it can be done with a simple QR code scan.

Try2See is working with local businesses districts in Royal Oak, Ferndale, and the Avenue of Fashion along Livernois Avenue in Detroit. So far 62 businesses are signed up and the Try2See team is working to get more businesses owners and their customers on board.

"We're trying to get the entire business district to use the system," McDonald says.

Source: Barry McDonald, founder of Try2See
Writer: Jon Zemke

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U-M grad creates new video game, Black-White Game

A recent University of Michigan graduate is creating a new video game, and it stars a "Happy Dude."

What exactly the Happy Dude in Black-White Game is is still up for debate. It’s a small white character going through a Super Mario Brothers-like game made up of black, white, and grey scenes. This much is known, the main character is small and happy.

"He is sort of a block with legs," says Paul Nagel, creator of Black-White Game. "He is of his own species. He's not a marshmallow or a tooth. He is just a happy little dude."

Nagel, who also goes by the alias James Covenant, graduated from the University of Michigan earlier this year with a bachelors degree in industrial engineering. He is currently working at the university as a video editor while working to create Black-White game.

"We have a lot of the mechanics down, general story outline," Nagel says. "If we had the funding now we would ship it a year from now."

Nagel describes the game on its Facebook page as, "Black-White is a puzzle platform video game for PC/Mac/Linux. You must invert Happy Dude's color from black to white to solve challenging puzzles." So the Happy Dude can change colors which will allow the protagonist to make his way through different levels. Check out a demo of the game here.

"When you're playing it it's very intuitive," Nagel says. "It makes a lot of sense."

Nagel plans to launch the Black-White Game for laptop next year. He is working to launch a crowd-funding campaign for the video game later this fall.

Source: Paul Nagel, creator of Black-White Game
Writer: Jon Zemke

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Logic Solutions adds to team on eCommerce growth

New work in eCommerce is helping drive some growth at Logic Solutions office in Ann Arbor. The tech firm is has watched a significant uptick in demand for its eCommerce services, allowing it to more than double its eCommerce team from six to 14 people. The firm currently employs about 50 people in Ann Arbor out of 250 worldwide.

"What we're seeing in the market place is a much bigger uptick for eCommerce technology in general and for Magento in particular," says Angela Kujava, director of innovation for Logic Solutions.

Logic Solutions primarily focuses on Magento and WooComerce eCommerce platforms. Magento holds a 26 percent market share of the top one million websites using eCommerce, while WooCommerce is one of the most popular eCommerce plugin for Wordpress websites.

While eCommerce work focused on normal websites is still king in the space for Logic Solutions, it has watched a big growth in mobile as of late. More and more customers are looking to make their eCommerce platforms accessible to mobile users.

"We're having many more conversations about mobile," Kujava says.

Source: Angela Kujava, director of innovation for Logic Solutions
Writer: Jon Zemke

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J-RO School of Music focuses on contemporary music

Josh Ross is starting his career by combining the two main subjects he studied in college, business and music.

Ross graduated from the University of Michigan with a bachelors degrees in both business administration and music earlier this year. So he launched the J-RO School of Music, a new business that teaches young people about music by using both classical and contemporary examples.

"Everyone teaches classical," says Josh Ross, founder of J-RO School of Music. "That's great but if someone wants to learn about pop or hip-hop there aren’t many places that do it."

The idea is to swim with the current when it comes to teaching young people about music by teaching them fundamentals for songs they are already excited about. Ross does camps and workshops that put equal emphasis on contemporary music, like pop, rock, musical theater, and hip-hop, and classical music.

"What's great about it is the kids are familiar with the songs and then they want to learn how to play them," Ross says.

The J-RO School of Music has facilitated 50 students so far this year. The students have ranged in ages from 7 to 70-years-old. Ross, who is releasing his own acoustic rock album this fall, would like to up those numbers beyond 100 and open his own storefront for the company over the next year. He hopes to use the base of that business to do more community outreach so underprivileged kids can have equal access to music education.

"I want to make it sustainable so I can provide some programs for children who don’t have those opportunities," Ross says.

Source: Josh Ross, founder of J-RO School of Music
Writer: Jon Zemke

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Avicenna Medical Systems signs first deal with VA health system

Avicenna Medical Systems recently signed a contract with the VA Health System Region 11, a move that will help deploy the startup's software platform in a number of medical institutions.

"That includes 11 hospitals and 20 site clinics," says Khaled El-Safty, co-founder & CTO of Avicenna Medical Systems. "We are working day and night to deploy it."

Avicenna Medical Systems' software platform is called AviTracks, which enables users to better manage treatment of their chronic diseases from home. It's aimed at people who utilize blood thinners or monitor cardiac rhythms. The idea is to lessen the information burden on healthcare IT systems, freeing medical staff to maximize time with patients and employ best practices for treatment.

The 7-year-old company's contract with the VA is set to last three years starting this summer. Avicenna Medical Systems is now looking to get into more regions of the VA health system now that it has signed one contract.

"Getting into the VA is one of the harder things we accomplished," El-Safty says.

Avicenna Medical Systems currently employs a staff of four people. It is looking to hire three more before the end of the year, including an account manager and software developer.

Source: Khaled El-Safty, co-founder & CTO of Avicenna Medical Systems
Writer: Jon Zemke

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HealPay expands focus to billing activities for businesses

HealPay originally made its name by creating software that helped debtors pay their bills. Today the Ann Arbor-based startup is taking aim at a bigger market.

"We have submerged ourselves into billing," says Erick Bzovi, co-founder of HealPay.

HealPay is now offering its clients a more comprehensive option where it handles all of their billing and payments. Those services can now be done online or over the phone. It is also offering this with its original settlement app.

"We're deploying an IVR so that debtors can check their balance at any time," Bzovi says. "That's huge."

HealPay currently employs a staff of four employees and two interns. It recently turned one of those employees (a software developer) into a full-time position. It could do that because it has grown its client list to a number of medium-sized law firms and other businesses across the U.S., and that clientele is growing.

"We want to be in a place where we double our client size," Bzovi says. "We'd like to have 60 or 70 clients and in more states. We're in seven different states now. We would like to be in 20 states."

Source: Erick Bzovi, co-founder of HealPay
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at
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