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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.

Michigan Angel Fund hits 100 members, invests in local startups

Michigan Angel Fund is hitting some significant milestones over the last year with even bigger ambitions for 2016.

The Ann Arbor-based angel investor group has 100 members between its two investment funds. It finished 2015 by sending out $2.91 million in investments, of which $1.5 million was made in the fourth quarter of last year.

Among its investments include leading a $750,000 Series A in Detroit-based BoostUp, a first-of-its-kind social savings platform that helps people save for a down payment on their next car or home purchase. The Michigan Angel Fund also participated in angel rounds for Romulus-based Eco-Fueling, Detroit-based FoodJunky.com, and Ann Arbor-based Genomenon.

"We can do a couple more deals," says Skip Simms, managing member of Michigan Angel Fund. "We expect to be closing on them in the first quarter of this year."

The Michigan Angel Fund has raised two investment funds worth more than $4 million. Simms plans to begin raising a third fund within a few months.

The Michigan Angel Fund invests between $250,000 and $2,000,000 in early stage startups with an ability to scale their growth that are based in Michigan. As many as 400 startups apply for funding Michigan Angel Fund each year. About 80 percent of them come from Michigan-based business accelerators and the other 20 percent are through referrals and startups reaching out to the fund.

"Every one of the companies that we have invested in have benefited from services provided by local tech accelerators," Simms says.

Source: Skip Simms, managing member of the Michigan Angel Fund
Writer: Jon Zemke

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

Accio Energy scores $4.5M to field test wind-energy tech

Accio Energy just landed a lot of money. And that means further development of its innovative wind energy generation systems. And the Ann Arbor-based startup has its eyes on raising even more in busy 2016.

The 7-year-old startup received a $4.5 million award from the U.S. Department of Energy's Advanced Research Projects Agency - Energy to fund the field testing of Accio Energy's technology. Accio Energy plans to spend next year laying the groundwork to field test its off-shore wind energy generation systems off the coast of Maine in 2017.

"This is our opportunity to scale it more than 10 times and take it offshore," says Jen Baird, CEO of Accio Energy.

Accio Energy's technology generates alternative energy from the wind without the turbine. Its aerovoltaic technology harnesses the electrokinetic energy of the wind (think static electricity) through a screen-like piece of equipment with no moving parts. The technology has been proven in wind tunnels, but this new funding means it can be built up for field testing in Penobscot Bay of Maine near the town of Castine.

The federal funding is a bit more than a grant because the feds will have an active role in the project, but the money is still non-dilutable government funding. It will also allow Accio Energy to hire a few more people to its staff of eight employees. The federal partnership comes with a 10 percent match requirement for Accio Energy and Baird expects to begin raising a multi-million-dollar seed round next year.

"It's a big step," Baird says.

Source: Jen Baird, CEO of Accio Energy
Writer: Jon Zemke

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

Ann Arbor's SkySpecs preps to launch drone technology

SkySpecs is gearing up to launch its drone technology early next year. It's on the brink of raising a significant amount of seed capital and already testing its product with customers.

The Ann Arbor-based startup is developing aerial drone technology that uses artificial intelligence to inspect infrastructure in dangerous locations, such as the blades of wind turbines. It's WingMan platform allows the aircraft to hover near an object without fear of hitting it. Check out a demonstration of the company's WingMan technology here.

"Our first field prototypes are working well," says Danny Ellis, CEO of SkySpecs. "We have customers who are working with them in the field. We’re planning a full roll-out in 2016."

SkySpecs got its start three years ago with aspirations of making drones in the rapidly growing industry. That focus shifted to creating technology that makes sure drones can avoid running into objects they are buzzing around, such as wind turbines or hard-to-reach parts of bridges.

Now SkySpecs has shifted again to offering an end-to-end solution for its customers, equipping drones with its technology so operations are turn-key for its customers. Ellis noticed many of SkySpecs potential customers loved the technology but didn’t know much about drones.

"It was extra work for us," Ellis says. "They would come to us and ask us which drones to buy."

SkySpecs won the grand prize worth $500,000 from last year's Accelerate Michigan Innovation Competition and is part of the Techstars accelerator in New York City. It currently has a team of eight people mainly based in Ann Arbor after hiring a couple of engineers and a business development professional over the last year.

The seed capital raise is expected to help SkySpecs grow out its team rapidly next year as it begins to roll out its technology on a national scale. It currently has two enterprise customers but Ellis doesn’t expect that his client list to remain that short for long.

"We have more in the pipeline," Ellis says.

Source: Danny Ellis, CEO of SkySpecs
Writer: Jon Zemke

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

Coherix scores $12M to grow manufacturing software in China

Coherix recently landed $12 million to help rapidly grow sales of its manufacturing software around the world. But the Ann Arbor-based startup nearly perished before getting to this point.

The company launched in 2004, making software that help streamline the advanced manufacturing process. Business grew quickly and the startup’s leadership had visions of going public. Then the Great Recession hit. The company's investors, never losing faith in Coherix's potential spent $9.6 million between 2008 and 2010 to keep the company afloat through hard times.

"We have a tremendous group of investors," says Dwight Carlson, CEO of Coherix.

When the economy turned around and Coherix extinguished its cash burn, Carlson had high hopes to raising a lot more money to fuel its growth.

"I thought they would be throwing money at me because we survived (the Great Recession)," Carlson says.

It didn't turn out that way. Investors saw that Coherix specialized in manufacturing, strike one. It is based in Michigan, strike two. Carlson cut his loses and went back to growing Coherix organically and further developing its technology.

Today its principal technology provides high-speed, high-definition 3D measurement and inspection services for manufacturers that streamlines their production capability. It creates efficiencies through high-tech, optical-based measurement and inspection of the assembly processes.

Coherix has found most of its success deploying this technology in China where 40 percent of that country’s gross domestic product is created through manufacturing. It employs 50 people globally, including 35 in Ann Arbor. It has hired two marketing people in Ann Arbor over the last year now that it has landed its latest investment round.

Carlson expects to hire a lot more people as he starts to put the $12 million in new seed capital to work. One third of that money will go toward building out Coherix's operations in China. The rest of it will be spent building the business in Ann Arbor. Taking Coherix public in the next few years is a dream again.

"Now we're pedal to the metal," Carlson says. "We are going from survival mode to rapid growth mode. We will be hiring an awful lot of people."

Source: Dwight Carlson, CEO of Coherix
Writer: Jon Zemke

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

Ann Arbor startups score seed capital from Innovation Fund

A couple of Ann Arbor-based startups have taken the lion's share of seed funding from the initial round of the Innovation Fund Macomb Community College, Powered by JPMorgan Chase & Co.

MyFab5 and TurtleCell received the top awards, $100,000 each, from the Innovation Fund. The $100,000 investments are focused on helping push those startups toward large-scale funding.

"We're laying the foundation to accelerate our growth," says Omeid Seirafi-Pour, co-founder & CEO of MyFab5.

MyFab5's platform works through Instagram, allowing its users to take pictures of their meals at restaurants and then rank their experience. The 2-year-old company got its start allowing users to rank their top five businesses in certain genres in local areas, but transitioned to a photo-based version when it noticed its users liked using it with Instagram.

MyFab5 averages more than 300,000 users each month. That is more than double its user rate from last fall. MyFab5 users have shared over 1.25 million restaurant recommendations and photos. It now employs a staff of four and three interns.

The platform also streamlines social media marketing for restaurants, providing a dashboard that enables creation of custom marketing plans, analyzing audience, generating leads, creating and publishing social media posts, tracking and engaging fans, and creating analytics reports.

TurtleCell makes a smartphone case with retractable headphones so users can avoid tangled, broken or lost headphones.

The Innovation Fund made five investments overall in startups based in Metro Detroit. The total investment package from the came to $275,000. The $2.7 million fund focuses on stimulating economic development and job growth among promising Metro Detroit entrepreneurs and next-stage businesses with high-growth potential. Investments range from $25,000 to $100,000.

Source: Omeid Seirafi-Pour, co-founder & CEO of MyFab5
Writer: Jon Zemke

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

Reveal Design Automation scores $50K from Zell Lurie Fund

Reveal Design Automation has scored a $50,000 investment from the Zell Lurie Commercialization Fund, a pre-seed investment fund from the University of Michigan's Ross School of Business.

The money is the last infusion of seed capital the University of Michigan spin-out will received. The angel investments and federal grants total nearly $4 million that is going toward the development of the Reveal Design Automation's semiconductor chip design technology. The $50,000 will go toward helping the Ann Arbor-based company land more customers.

"We have a sales team now," says Zaher Andraus, president & CEO of Reveal Design Automation. "They also provide customer support."

Reveal Design Automation specializes in developing electronic design automation software. The software helps simplify the complicated semiconductor chip design that shortens the verification timeline and lets makers bring it to market faster.

The firm has already finished the Version 1 of its platform and has deployed it to a couple of initial customers in industries like telecommunications and automotive. It now has a team of 12 people after adding a couple over the last year.

"I want to make sure we have more customers," Andraus says. "I'd like to have as many Tier 1 customers are we can support and 20-30 employees."

Source: Zaher Andraus, president & CEO of Reveal Design Automation
Writer: Jon Zemke

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

Three Leaf Ventures opens Midwest office in downtown Ann Arbor

Three Leaf Ventures is opening an Ann Arbor location to serve as the venture capital firm’s Midwestern office.

The Denver-based firm, an affiliate of The Broe Group, aims to invest in healthcare companies that specializes in everything from IT to genomics to consumer medical devices.

"We have already drummed up a lot of venture capital activity," says Sean Kearney, managing director of Three Leaf Ventures. "We believe a lot of deal flow will come from Ann Arbor, Detroit, and Michigan."

Three Leaf Ventures will lease space in Kerrytown. It's office will be staffed by Kearney who plans to move to Ann Arbor this summer. A couple of part-time staffers are expected to join him later this year.

The 3-year-old venture capital firm is stage agnostic when it comes to its investments, meaning it is willing to invest in either early, middle or late-stage startups. Three Leaf Ventures hasn’t made an investment in a Michigan-based startup yet but Kearney expects that to change before the end of the year because there are already a couple of good candidates in the pipeline.

"That (one investment this year) is a conservative goal," Kearney says.

Source: Sean Kearney, managing director of Three Leaf Ventures
Writer: Jon Zemke

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

Huron River Ventures raises second fund worth $5M, local firms targeted for investment

Huron River Ventures is nearly done raising its second investment vehicle, a multi-million dollar fund the Ann Arbor-based venture capital firm plans to use to further invest in its portfolio of tech startups.

The 5-year-old firm raised a $11 million fund at its onset, which it used to make early stage investments into 15 startups like FarmLogs and cribspot. Many of them are based in Ann Arbor, including a few that it shares shares office space with in Kerrytown.

The second fund, the Huron River Venture Opportunity Fund, will focus on making follow-on investments into the best of the best of the firm’s portfolio of startups. It has already made a follow-on investment into FarmLogs.

"It's all for follow-on investment in our portfolio," says Ryan Waddington, partner with Huron River Ventures. "But only for companies that reach a certain size or hit certain milestones."

Huron River Ventures has executed a first close worth $3.5 million and expects to do a final close worth a combined $5 million by July.

"This is all private capital in the Opportunity Fund," Waddington says. "It's all individuals and family offices."

Huron River Ventures expects to make one more follow-on investment later this year and a handful more after that. The firm has also hired a new venture partner over the last year, expanding its staff to three people.

Source: Ryan Waddington, partner with Huron River Ventures
Writer: Jon Zemke

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

Michigan Angel Fund closes second fund worth $2.1 million

The Michigan Angel Fund has closed on its second fund worth $2.05 million. The firm specializes in making early stage investments in Michigan-based tech startups. Those investments usually range from $250,000 to $2 million.

The fund expects to make between eight to 10 investments over the next two years, mostly in startups too young for traditional venture capital investment.

"It is designed to fill that need as well for our tech startups," says Skip Simms, managing member of the Michigan Angel Fund, which is overseen by Ann Arbor SPARK.

The Michigan Angel Fund was also designed to introduce more high-net-worth individuals into angel investing. The fund launched three years ago with 72 members. The second fund has 62 members with more than half of the investors in the first fund.

"The investors come from all over the state and some outside of the state," Simms says. "Some of the investors in the first fund come from as many as four different states."

The first investment vehicle from the Michigan Angel Fund is fully invested. Some of the portfolio companies include Avegant, Arborlight, BioPhotonics Solutions, Eco-Fueling, Epsilon Imaging, Larky, stkr.it, and Varsity News Network.

Source: Skip Simms, managing member of the Michigan Angel Fund
Writer: Jon Zemke

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

Pixel Velocity scores $10M in Series B round

Pixel Velocity has landed $10 million in seed capital thanks to a Series B round of investment in the image processing and data analytics startup.

"They're really well-positioned in an area that combines data from sensors and data analytics," says Jonathan Murray, managing director of the Ann Arbor office of Draper Triangle Ventures, which also participated in Pixel Velocity’s Series B.

The Ann Arbor-based company creates sensor technology that helps provide safety, security and operational continuity solutions to commercial and government facilities. Its imagery and data analytic tools help protect users from accidental or natural threats, such as leaks, spills or intrusion. The company is planning to expand into the oil and gas market this year.

Money from the Series B will fund the Pixel Velocity’s revenue growth and expanding operations by adding more working capital to its bottom line. That money will help do everything from adding inventory to expanding its staff. The company has hired 10 people over the last year, including positions in executive management, software development, and hardware engineers. It currently employs 17 people and the occasional intern.

"We will also be doing some work on our branding," Grisham says.

Source: Heather Grisham, COO of Pixel Velocity, and Jonathan Murray, managing director of the Ann Arbor office of Draper Triangle Ventures
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
308 Investment Articles | Page: | Show All
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