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4 Ann Arbor firms, individuals among nominees for Michigan Venture Capital Association awards

Ann Arbor individuals and firms are well-represented in the 2017 list of nominees for the Michigan Venture Capital Association's (MVCA) annual awards dinner. This year marks the MVCA's 15th anniversary.

 

The winners in each category will be announced at the awards dinner Nov. 15 at Little Caesars Arena in Detroit – a change from previous years, when winners were announced ahead of time.

Ann Arbor's Dug Song and Jon Oberheide, founders of cloud-based cybersecurity company Duo Security, are nominated for "Entrepreneur of the Year."

 

"[Duo is] an exciting company that a lot of folks in Ann Arbor and throughout Michigan have been watching," says MVCA executive director Maureen Miller Brosnan. "Dug has been recognized before for work in industry, so it's nice to be able to recognize Dug and Jon together as builders of such a fast-growing company."

 

The other two nominees in this category are Dan Gilbert, chairman and founder of Rock Ventures and Quicken Loans Inc., and Kaylan Handique, a founder of life sciences startup Celsee Diagnostics.

 

Two Ann Arbor firms, Deepfield and LLamasoft, are represented in the "Capital Event of the Year" category.

 

Deepfield, an information technology startup, started at the University of Michigan, secured early-stage investments, and added 65 employees in five years before being acquired by Nokia in 2017. LLamasoft, a supply chain modeling and design software firm, recently announced an investment and partnership with TPG Capital, the global private equity fund of leading alternative asset firm TPG.

 

The third nominee in this category is Cirius Therapeutics, a life science startup with research and development operations in Kalamazoo.

 

Ian Bund, senior advisor and founding partner of Plymouth Growth Partners in Ann Arbor, is nominated in the "Lifetime Achievement" award category.

 

"Ian Bund is legendary throughout Michigan," Brosnan says. "He's been a huge asset in helping to shape Michigan's venture capital community. He's been crucial to the success of a number of firms in the state, not just Plymouth Growth Partners."

 

Bund was recruited to Michigan back in 1976, when Michigan's venture capital community was much smaller than it is today.

 

"He's one of those people who have been there from the very beginning, and you'll see his name pop up associated with many venture capital events every year," Brosnan says.

 

The other nominees in the "Lifetime Achievement" category are investor and entrepreneur Mike Jandernoa, and investor Jody Vanderwel.

 

Also new this year is a "Community Impact Award." Nominees in this category are individuals, organizations, or events that create connections and build community in the entrepreneurial and venture capital ecosystem.

 

Nominees in this category are the Accelerate Michigan Innovation Competition, which awards $1 million in cash and in-kind prizes through its pitch competition; the Michigan Growth Capital Symposium, connecting early-stage companies with venture capitalists and strategic investors from Michigan, the Midwest, and across the U.S.; and Techstars Mobility, a mentorship-driven accelerator program focused on the future of mobility and transportation.

 

In general, Brosnan says that when choosing nominees, MVCA members are looking for "people willing to take risks."

 

"They are people who work hard to foster a vibrant entrepreneurial community and set the stage for the next generation," she says.

 

More information about all nominees and the awards dinner is available at MVCA's website.

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photos courtesy of MVCA.


SAHI Cosmetics wins $100,000 investment in AOL founder's Rise of the Rest competition

SAHI Cosmetics' win in the Oct. 11 Rise of the Rest competition in Ann Arbor, netting the company an investment of $100,000, is just the latest triumph for SAHI founder Shelly Sahi.

 

SAHI focuses on makeup products aimed at Arab, Latina, and Indian consumers with "medium" skin tones that may have yellow or olive undertones.

 

"Rise of the Rest is a very interesting competition, with the founder of America Online (AOL), Steve Case, investing in your company if you win," Sahi says. "Just that name alone, having someone so sought after in the technology and entrepreneurial world — it was an honor to be chosen as a semi-finalist."

 

Sahi's main concern was that Case is from a technology background, and she wasn't sure he would take her makeup company seriously.

 

"But Steve was really happy with my business idea," Sahi says. "He saw that it was scalable and profitable, and the judges thought I was a credible leader who could lead the company to success."

 

SAHI was one of eight local companies who pitched to Case at the Michigan Theater last week. The other competitors were SkySpecs, Pitstop, Genomenon, Inmatech, Warmilu, SurClean, and Civionics. The pitch competition capped a day in which Case toured Ann Arbor accompanied by local public figures including Michigan governor Rick Snyder, Ann Arbor mayor Christopher Taylor, and Rock Ventures founder Dan Gilbert.

 

Sahi brainstormed the idea for her company while still an MBA student at the University of Michigan Ross School of Business. She started working on the company full-time in December 2016, making SAHI one of the youngest companies to make the list of finalists in the Rise of the Rest competition.

 

SAHI has had several early successes. In February, Sahi won a $25,000 prize for best business in the Michigan Business Plan competition, plus an additional $2,000 for her outstanding presentation. In August she received a $100,000 investment from the Zell Founders Fund. She also got major exposure when Marie Claire published an article about her business this September.

 

When asked during the competition about how she handles struggles and hard decisions, Sahi shared that she had a chance to put her products on a website that sells products on discount.

 

"We could have made a lot of sales from that, but I knew that, ultimately, our strategy is to position SAHI as a luxury brand, so we couldn't have it discounted the first time somebody encountered our brand," Sahi says. "We could have made money in the short run, but it didn't fit our long-term strategy."

 

Sahi's plan for the new investment is to continue to build brand awareness.

 

"We need more people to find out about SAHI and try our products," she says. "I know they'll be satisfied and will come back for our newer products."

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photos courtesy of Shelly Sahi.


12 Ann Arbor companies named semifinalists in Accelerate Michigan competition

The Accelerate Michigan Innovation Competition recently announced its 2017 semifinalists, and 12 Ann Arbor-area businesses made the list.

 

Accelerate Michigan is the state’s largest gathering of high-growth, high-tech companies and venture investors. The competition awards $1 million in prizes, including a $500,000 grand prize. Accelerate Michigan is operated by Invest Detroit Ventures with the support of the Michigan Economic Development Corporation, Ann Arbor SPARK, Invest Michigan, Spartan Innovations, the Michigan Small Business Development Corporation, and JR Turnbull.

 

All semifinalists will pitch during the morning and afternoon of Nov. 16 at the Detroit Masonic Temple. The top 10 finalists will pitch that evening during a gala awards dinner, when the grand prize is announced.

 

Among the Ann Arbor semifinalists is Soft Lesion Analytics, a firm whose technology allows patients and healthcare providers to speed up diagnosis by ensuring that enough cells are collected during fine-needle aspiration biopsy procedures.

 

"It basically comes down to biopsy quality control," says CEO and founder Michael Moore. "One out of five biopsies come back as inconclusive because they don't have enough tissue to test and say for sure if it's cancer."

 

That wastes the healthcare workers' time and increases patients' stress when they have to come back for another biopsy before getting a definitive diagnosis. Soft Lesion Analytics' technology does a cell count, so the healthcare team knows immediately if they have enough tissue for a diagnosis.

 

Moore says winning the Accelerate Michigan competition could "change things dramatically" for his company, which is still in an early stage. The prize money would help the company fund a clinical validation study it has scheduled for spring of 2018.

 

Moore says that just being named a semifinalist is an honor.

 

"It's an opportunity to start building a brand presence and get connected on a larger scale," he says.

 

Building that brand presence will include converting to a C corporation in the next few months and changing the company name to "Medkairos," derived from a Greek word for "opportune moment," Moore says.

 

Other semifinalists from Ann Arbor include:

 
  • Circadian Risk Inc., a company that has created a vulnerability assessment app and allows companies to create remediation plans to mitigate risk.

  • Foodstand, a company building an app that helps motivate good eating habits through community health eating challenges.

  • Kulisha, which uses insects for eco-friendly and sustainable livestock feed.

  • Mi Padrino, a crowdfunding platform for organizing, planning, and funding traditional Latino events.

  • Parabricks, a technology company providing high performance genomic analysis.

  • Plinqit, which creates a mobile app to encourage people to set financial goals to build their savings accounts.

  • Ripple Science, a company that builds web-based software to facilitate the recruitment and management of participants for clinical and translational studies.

  • Slideless, a technology company that aims to help health providers switch from glass microscope slides to digital pathology.

  • SpellBound, an augmented reality company that helps sick children deal with trauma and hospitalization.

  • TechStak, An online platform helping small businesses find technology solution providers for their outsourced technology needs.

  • Uru, an online platform that connects athletes with teams and playing opportunities all over the world.

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photos courtesy of Michael Moore.


Ann Arbor's Akadeum Life Sciences secures $1.5 million to develop microbubble technology

A recent funding round that netted almost $1.5 million will allow Ann Arbor-based bioscience company Akadeum Life Sciences to develop and market more products and double its staff.

 

The Ann Arbor company closed its latest round of financing Sept. 8, with Silicon Valley-based BioInfleXion Point Partners leading the financing round. The fund typically invests in the Bay Area, but said in a press release that the combination of the company's innovative technology and the strong team at Akadeum made the investment attractive. The core idea behind Akadeum's technology is sorting biological samples with microbubbles that target specific cells and float them to the surface to be collected.

 

Other investors include 5 Prime Ventures, the University of Michigan’s MINTS (Michigan Invests in New Technology Startups), Detroit Innovate Fund (part of Invest Detroit), and local angel investors.

 

Akadeum was founded by CEO Brandon McNaughton and CTO John Younger not long after they met by chance at a conference about seven or eight years ago. Later, when McNaughton was working at a startup and Younger was working as a professor at the University of Michigan, a mutual friend suggested they start talking with each other.

 

"We had a meeting, and I think both of us shared early on our interest in making an impact through innovation, developing something in the lab, and then putting it to work," McNaughton says.

 

They also agreed on a "lean startup" method that involved putting microbubbles in users' hands early in the development process.

 

"So we were basically doing development and marketing at the same time," says McNaughton. "For the life sciences, it's unusual to start getting early users before you're even done with development. In a lean startup, customer needs drive development, so you're not spending money or time on things they don't need."

 

Younger explains the microbubble technology that he and McNaughton have built their company on.

 

"When users have samples of cells, say from a clinical sample or from a patient, all the cells are like a big bowl of M&Ms," Younger says. "For the user, there's only one color they want, and they want to get rid of the rest. The technology lets us grab just the blue ones, or grab everything that's non-blue and throw it away so only the blue ones remain."

 

McNaughton says this latest round of funding will allow the company to launch a few products into a wider market.

 

"The last two years, we've focused on manufacturing microbubbles for cell separation, and now we need to decide what products we want to release," McNaughton says. "We're planning on releasing several of them. We're going to continue what we're doing, putting our products early on into user hands, and building the company."

 

To help with that expansion, Akadeum plans to move to a new facility at MI-HQ in Ann Arbor by the end of September and double its team from five to 10.

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photos courtesy of Akadeum.


Funding and mentorship program for startups comes to Ann Arbor SPARK

Kyyba Xcelerator, Bodman PLC, and TiE Detroit are partnering with Ann Arbor SPARK to bring a program for entrepreneurs called Pitch Club to Ann Arbor on Sept. 27.

 

The mentoring and funding program will be the first of 10 monthly events to be held in cities across Michigan, including Detroit, Grand Rapids, and Lansing. The program's aim is to connect entrepreneurial hubs and SmartZones within Michigan and to provide startups with potential funders and mentors as they grow their businesses.

 

Each event will include a pitch session, as well as unique touches including local keynote speakers and partnerships with local entrepreneurial and economic development organizations, including TechTown and Automation Alley. The keynote speaker at the Ann Arbor Pitch Club will be Don Hicks, founder of Ann Arbor software firm LLamasoft.

 

"We're pulling together amazing people to be judges, to invest, and provide guidance," says Michael Melfi, partner with Bodman and Pitch Club host.

 

Startups who want to present at a Pitch Club event complete an online application form, and those applications are then reviewed by a panel of judges. Those chosen to pitch at the monthly events not only get a chance to earn investments ranging from $25,000 to $100,000, but they also automatically get a $2,000 service provider package with resources for startups, one-on-one coaching with a mentor, and a free pass to the TiECon Detroit entrepreneurial conference.

 

Qualifying companies that receive funding from the TiE Detroit Angels may also have a chance to present to a global program for funding startups, the TiE Global Angel Alliance.

 

Melfi says the panel of judges will be looking for products or services that solve a problem for a large audience. The judges want to see pitches that have mass appeal and that are scalable and profitable.

 

"The way I look at the judging is that we're all optimists, looking for what's possible in the pitches we see," Melfi says. "We're looking for individuals or teams who have the right attitude, skills, and knowledge to succeed as entrepreneurs."

 

Startups interested in pitching at one of these events can apply at the Kyyba Xcelerator website.

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photo courtesy of Michael Melfi.


Ann Arbor cosmetics company focusing on minority consumers wins $100,000 investment from U-M fund

SAHI Cosmetics, a startup cosmetics company founded by a University of Michigan (U-M) Ross School of Business graduate, has received a $100,000 investment from the Zell Founders Fund.

 

The U-M student-led seed fund has a focus on funding startups founded by Ross students and recent alumni. SAHI Cosmetics founder Sheleen Sahi is finding success quickly, having been named the best business in the Michigan Business Challenge in February 2017. SAHI products focus on Arab, Latina, and Indian consumers.

 

Sahi says it may seem like business growth is coming quickly and easily, but she spent a lot of time and effort setting up a foundation for success.

 

"What you get is what you put in," Sahi says. "One thing that helped me find success was that I worked really hard to get into a school like Ross and take all the right classes to set me up for success."

 

She says taking courses on marketing, strategy, and entrepreneurship is coming in handy now that she's working on making a future for SAHI Cosmetics.

 

Sahi says she thinks her company is attractive to investors in part because many people are moving toward an "inclusive economy."

 

"We look where there are open spaces, where there are folks neglected by certain industries," Sahi says. "Our brand is all about about inclusivity and celebrating diversity. That's a great, positive message that investors can back."

 

Sahi says members of the growing U.S. immigrant community have higher educational degrees, which means higher spending power, and many of those immigrants are used to spending money on custom goods and solutions.

 

"It's about time people start considering the demands for this particular population," she says. "They have the money to pay for it, and are willing to pay for it, so brands should start to consider the implication of including these other folks into their customer base."

 

Sahi says the Founders Fund investment has allowed her to hire a marketing firm and a PR firm to spread the word about her business and bring more customers to the website.

 

She also hopes to put more revenue into research and development and expand the SAHI line with products that complement her target market's complexion. Sahi is expecting to expand her line of blushes and highlighters next.

 

Her strategy is not to get products into department stores or other retail venues, but to connect with customers directly through the SAHI Cosmetics website.

 

"We're building our brand identity with customers," Sahi says. "We are hoping to get many repeat customers coming back to us and create a good connection with customers."

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photos courtesy of Sheleen Sahi.


North American Tech Tour to bring investors, entrepreneurship events to Ann Arbor in August

Investors, entrepreneurs, and bloggers Paul Singh and Dana Duncan will bring events and fellow investors to Ann Arbor when their North American Tech Tour stops here Aug. 8-10.

 

Singh, who is former managing director of the Washington, D.C.-based 1776 startup incubator and coauthor of the Results Junkies blog, says he began investing in startups in 2009. At that time, his focus was on visiting San Francisco and Silicon Valley, but he soon noticed that many companies in those areas had started somewhere else – sometimes in other countries but often in smaller towns in America's heartland.

 

"So, in version one of the tech tour, I figured I'd get on an airplane and find these companies before they went to Silicon Valley," Singh says. He did that for about five years and racked up a quarter of a million miles in travel.

 

Singh decided he really needed to drive instead of fly if he wanted to visit communities farther away from major airline hubs, and that he needed to spend more than a day or two in each place to get the most from his visit.

 

"It dawned on me that if I took my house to those places, it'd be more comfortable than living out of a suitcase in a random hotel, so in late 2015, I bought an Airstream trailer," Singh says.

 

In spring of 2016, he took his trailer to visit these cities in the heartland for several days to a week, visiting 70 cities in a year and a half. He also brought other investors along with him, so they could see for themselves that there are many great places to invest in outside of Silicon Valley.

 

Singh says each visit is unique and tailored to the specific city, but some components of the tour remain the same. In each location, he establishes daily "office hours" so startups and entrepreneurs can come in and talk to him and the other investors that travel with him.

 

The tour also hosts a couple of events open to the general community, made up of panels and keynote speakers, as well as one or two roundtables focused on getting to know local investors. Singh also likes to do an informal tour of each community he visits to get a sense of where community members hang out and what company work cultures are like.

 

The tour's Ann Arbor visit will include office hours every day, and a "Fireside Chat" on the evening of Aug. 8. On Aug. 9, morning sessions on angel investing and other startup topics will be followed by afternoon office hours and a stop at the A2 BrewTech Meetup at Dominick's bar in Ann Arbor.

 

On the last day of the tour, participants will visit Ann Arbor's autonomous vehicle facility, Mcity, followed by visiting a co-working space. There will be one last chance for office hours and then a farewell party before the tour leaves for a mobility startup event in Detroit.

 

More event details and registration information are available here.

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

 

Photos courtesy of Results Junkies.


Renaissance Venture Capital Fund CEO named finalist for regional Entrepreneur of the Year award

Chris Rizik, CEO of Ann Arbor's Renaissance Venture Capital Fund, was recently named a finalist for an Entrepreneur of the Year award for the Michigan/Northwest Ohio region by the global accounting and professional services firm EY (formerly Ernst & Young).

 

Rizik is one of several Ann Arbor-area nominees for the award, along with Jan and Sassa Akervall of Akervall Technologies, Phil Brabbs of Torrent Consulting, and Doug Armstrong of North Star Reach. Award winners for the region will be announced during a June 21 event at the Detroit Institute of Arts, and regional winners can go on to be considered for a national award.

 

Rizik was nominated by a colleague and then interviewed by a panel of independent judges who were impressed not only by Renaissance's commitment to Michigan but also by the fact that Rizik started his venture capital business in 2008 when the economy in Michigan was at one of its lowest points.

 

Rizik says the nomination is flattering to him personally. But more importantly, he's glad it will shine a light on what Renaissance is doing to help Michigan's entrepreneurial community. He describes Renaissance as "a fund of funds with a mission."

 

"We invest in venture funds around the country under the condition that they come get engaged in Michigan," Rizik says.

 

Rizik came to venture capital with a background as a lawyer. He then started working in venture capital and says he saw a lot of missed opportunities.

 

"There was this great research coming out of universities in Michigan, a high concentration of engineers, lots of talented people, but we still couldn't seem to shake out of being a middle-of-the-pack state," Rizik says.

 

He saw too many startups unable to grow due to lack of funding, and great talent and technology leaving the state.

 

"I thought that leading this new fund that would try to do something innovative was a mission I could really get behind," he says. "I felt from my experience it could work, even though nobody had done it before, and it has been exactly what I hoped."

 

Rizik says Renaissance's business model is now being replicated in other parts of the country, and Michigan is breaking out of that "middle-of-the-pack" position. Compared to about 10 or 15 years ago, startups today have nearly 10 times as many venture capital firms to seek funding from.

 

"Every year, we see Michigan becoming more and more important as a national venture capital hub," Rizik says.

 

Another aspect of Renaissance's mission is to help connect small startups with larger corporate players. Renaissance helps startups get meetings and customer relationships with big companies, and the major companies get exposed to innovation they wouldn't otherwise see, he says.

 

"I love getting up every day for work and looking at the impact we're having," Rizik says. "Everybody involved is making good money and at the same time really helping Michigan."

 

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

Photos courtesy of Renaissance Venture Capital Fund.


Report: Ann Arbor still the center of Michigan's growing venture capital ecosystem

The Michigan Venture Capital Association’s (MVCA) 2017 research report has good news for entrepreneurs and investors alike, showing growth both in the number of venture-backed startups and the number of venture capital investment professionals working in the state.

 

MVCA is an Ann Arbor-based nonprofit whose membership includes 341 investment and entrepreneurship professionals from 95 different organizations. MVCA executive director Maureen Miller Brosnan says the most critical number in MVCA's 10th annual report is 141. That's the number of Michigan companies that venture capital firms backed in 2016, an increase of 48 percent over the past five years.

 

The report also shows that 54 startups received more than $222 million from Michigan venture capital firms last year, a 42 percent increase over the past five years. Brosnan says these continual increases show that Michigan has a vital, growing venture capital community, unlike other states where venture capital is shrinking.

 

She says venture firms in Michigan are backing startups in the sectors of information technology, life science, medical devices, and manufacturing.

 

"These are the types of investments in startups that produce some of the highest paying jobs in Michigan," Brosnan says.

 

And Ann Arbor is ground zero for many of those high-tech and life science startups.

 

"Ann Arbor continues to be the largest area for venture capital and startups throughout the state, with Detroit and Grand Rapids running neck and neck for second," Brosnan says. "Ann Arbor continues to lead the way, especially in healthcare and life sciences. A lot of that is coming out of the University of Michigan because they do a lot of research in that area. Their Office of Technology Transfer is very well connected with the venture capital and angel investor communities."

 

Brosnan says Michigan’s profile is so high in the U.S. venture capital community that for every dollar invested in startups by Michigan-based venture capital firms, $4.61 is attracted from out of state.

 

That’s a sign that Michigan venture investors are looked at as leaders in the field and experts on recognizing great ideas when they see them, Brosnan says.

 

"An investor from out of state feels more confident knowing there’s a Michigan partner at the table, and people are confident with the resources in Michigan to sustain growth in startups," she says.

 

The full 2017 report is available here.

Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.

All images courtesy of Michigan Venture Capital Association.


First Capital Fund established to help Michigan's early-stage startups thrive

Young startups across Michigan will get a helping hand from a new multi-million-dollar fund managed by Invest Detroit Ventures and supported by the Michigan Economic Development Corporation and the New Economy Initiative (NEI).

 

The First Capital Fund's goal is to raise $4.2 million in two years and offer up to $150,000 in capital to tech companies in the earliest stages. MEDC has made an initial $2 million investment in the fund, which Invest Detroit aims to double by bringing private capital into the fund. NEI will support the fund with $800,000.

 

Adrian Ohmer, principal with Invest Detroit Ventures, says the fund does not require startups to bring along any additional financiers because funding for early-stage startups has become harder to find.

 

"Something we've observed in our seven years of existence is that a lot of the capital pegged as early stage has moved down the pipeline," Ohmer says. "Even angel investor groups only want to fund startups in the post-production phase."

 

Ohmer says awarding up to $150,000 to startups means they don’t have to spend months on the road, raising more capital from various investors, in order to move on to the next level and then do another road trip to raise even more funds a year later.

 

"We want to make sure they have enough money to meet certain milestones that we work with them to set in order to get them to a fundraising round that makes sense for them in their industry," Ohmer says.

 

While Invest Detroit is based in Detroit, it has always had a wider focus, Ohmer says.

 

"With the rebirth of Detroit, the city is certainly central to a lot of what we care about, but our team has always had a statewide focus," Ohmer says.

 

That focus includes Ann Arbor, which Ohmer calls a "hotbed for startups."

 

"Ann Arbor companies are more than likely going to be a prominent part of our fund," Ohmer says.

 

He notes that the fund hopes to engage a broad range of Michigan startups, including those in the Upper Peninsula.

 

"Companies from the Upper Peninsula have always come down to big events that the state hosts, like the Michigan Growth Capital Symposium, so we're going to find ways to establish a presence there, though it might be mostly through web-based meetings," Ohmer says.


Sarah Rigg is a freelance writer and editor in Ypsilanti Township. You may reach her at sarahrigg1@gmail.com.


Adrian Ohmer photo courtesy of Invest Detroit.


U-M Law School startup offers equity crowdfunding

Investors of all stripes may now purchase shares in University of Michigan (U-M) Law School startup Court Innovations through the equity crowdfunding platform NetCapital.

Launched in 2014 with intellectual property developed at U-M, Court Innovations' Matterhorn online case resolution platform is now in use in 20 courts across Michigan and Ohio. Matterhorn allows courts, law enforcement, and citizens to communicate about and resolve minor infractions without setting foot in court.

"It's kind of exciting to be able to extend equity investment to more people, just like we're extending the court to have more people access it," Court Innovations president M.J. Cartwright says. "It really fits our model."

That extension is made possible under the federal Jumpstart Our Business Startups Act (JOBS Act) by way of a 4(a)(6) crowdfunding offering, with the transaction facilitated by NetCapital's Securities and Exchange Commission-authorized funding portal. The JOBS Act is meant to encourage funding for small business by easing some securities regulations. The act was passed in 2012, but provisions for companies to issue securities through crowdfunding finally took effect in May of this year.

"You don't have to necessarily be an accredited angel investor, and you can actually invest in companies that are, like ours, offering some of their common stock, and you can be involved in company investment," Cartwright says. "Which we think is very, very cool."

Founded with funding from U-M's Third Century Initiative, Court Innovations is now looking to raise close to half a million dollars, staff up, and expand into courts in all 50 states.  
 
Eric Gallippo is an Ypsilanti-based freelance writer.

Report: Ann Arbor leads Michigan in entrepreneurial resources

A new statewide guide to entrepreneurial resources shows that Ann Arbor easily tops other Michigan cities when it comes to funding opportunities and other support for startups.

The 2016 Michigan Entrepreneurial and Investment Landscape Guide was released last week by the Ann Arbor-based Michigan Venture Capital Association. The document features more than 140 profiles on venture capital firms, angel groups, support organizations, and service providers active in the state's entrepreneurial and investment scene.

Ann Arbor is particularly rich in resources, with more than half of the state's 44 venture capital firms based here, as well as two angel groups and 17 entrepreneurial support organizations.

"Washtenaw County by far leads the charge in resources that are available for entrepreneurs," says Maureen Miller Brosnan, executive director of the MVCA.

The area is one of the fastest-growing entrepreneurial communities in the state, Brosnan says, thanks in part to work coming out of the University of Michigan in high-tech and life science industries.

Launched last year, the annual guide and companion interactive map helps connect young companies to funding and leadership with a focused approach that Brosnan says wasn't available before.

"The guide was designed to fill that hole we were seeing," she says. "This is the quickest way for startups to find partners."

Another key market for the guide is out-of-state investors, to whom Brosnan says Michigan presents a "vitality" of entrepreneurial activity not seen in other parts of the country.

"For every $1 invested in Michigan startups, $4.31 comes in from out-of-state investors," she says. "We are really good at leading the charge with deals and able to acquire partners from outside the state of Michigan."

The full guide can be downloaded as a PDF from the MVCA website. Printed versions of the guide will be available at MVCA events, including the organization's upcoming 2016 awards dinner in November.
 

FlexDex lands $5M investment to develop surgical device

FlexDex Surgical has landed $5 million of investment from a Series B round. It plans to use the capital to turn its laparoscopic surgery tool into the go-to instrument for doctors everywhere.

The Brighton-based's principal product is the FlexDex Needle Driver, a minimally invasive surgical instrument that can be used during laparoscopic surgery. The first generation of the product proved it’s effectiveness. The Series B money will be used to develop the second generation iteration of the tool, which will be a more commercially viable product.

"The (first generation) product is used and then disposed of," says Tom Davidson, chairman & CEO of FlexDex. "The second generation device will have have a disposable shaft but the handle, which has all of the mechanicals in it, will be reusable."

FlexDex was developed at the University of Michigan by co-founders Shorya Awtar, Sc.D., James Geiger, MD and Greg Bowles over the last decade. The idea was to make laparoscopic surgery easier for everyone involved.

Laparoscopic Surgery is the minimally invasive approach to abdominal surgery during which the abdomen is inflated with gas to create an operating space. Small incisions are made to accommodate an endoscope for visualization and long narrow surgical instruments. The FlexDex platform technology enables highly intuitive, one-to-one mapping of the surgeons arm and hand motions to the articulating instrument inside the patient’s body.

FlexDex Surgical raised a $2.3 million Series A at the end of 2014. Since then it has built out its staff to a dozen people, oncluding hiring four people in director and engineering positions. It’s looking to hire two more mechanical engineers right now as it works to launch the second generation of the FlexDex Needle Driver.

"Our goal is to be a product development powerhouse," Davidson says. "That's why we're hiring so many engineers."

Source: Tom Davidson, chairman & CEO of FlexDex
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Strata Oncology lands $12M investment for precision medicine tech

Another Ann Arbor-based startup has landed another large round of venture capital investment. This time it’s Strata Oncology's turn to secure a Series A investment. The $12 million infusion will allow them  to further develop their tumor sequencing technology.

Strata Oncology is currently conducting clinical trials for Strata Trial, which will provide no-cost tumor sequencing for 100,000 cancer patients that will characterize the mutations that caused their cancer. The company will then use that information to offer a portfolio of precision-medicine clinical trials that target a wide range of these mutations, with the goal of maximizing the chances that a patient matches to a trial.

"For most cancer patients in the U.S., tumor sequencing is not standard of care, so patients remain unaware of their eligibility for promising precision medicine clinical trials," says Dan Rhodes, co-founder and CEO of Strata Oncology. "By providing no-cost tumor sequencing for 100,000 cancer patients, Strata intends to be the catalyst, helping patients find the right trials and helping pharma find the right patients."

Strata Oncology aims to dramatically expand late stage cancer patients' access to tumor sequencing and precision medicine trials and to accelerate the approval and availability of breakthrough cancer medicines. The idea is to maximize the patient's chances of survival.

Ann Arbor-based Arboretum Ventures and Baird Capital co-led Strata Oncology's Series A. Ann Arbor-based Michigan eLab also participated in the funding round.

Source: Strata Oncology
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Armune BioScience lands $4M investment, chases another $25M

Armune BioScience closed on a newly expanded Series A worth $4 million last week, and the life sciences firms has its eyes on even bigger things this year.

"We're on hunt for a $25 million Series B round," says David Esposito, president & CEO of Armune BioScience. "We have brought on Mavericks Capital out of Palo Alto to help us land it."

The Kalamazoo-based company, it also has a laboratory in Ann Arbor, is developing an innovative, non-PSA blood test to aid in the early detection of prostate cancer. Apifiny went to market last year with Armune BioScience hope to sell 1,500 tests.

"We have done a little more than 5,000 billable tests," Esposito says. "That exceeded our expectations for the test for our first year on the market."

That growth allowed Armune BioScience to expand its Series A by $1.5 million. It also prompted the company to hire another three people, all of them medical techs, for the Ann Arbor lab. The company now employs 10 salaried employees and another 10 consultants. The new infusion of seed capital is expected to add more staff this year.

"We'll probably go another five people in the laboratory by the end of the year," Esposito says. "Those will probably be medical techs and PhDs."

Source: David Esposito, president & CEO of Armune BioScience
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
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