Ann Arbor start-ups take $90M in VC funds year-to-date
Source: Concentrate, 9/1/2010
Venture capital spending is up in
Michigan, and Ann Arbor start-ups are proving to be king of the hill.
Year-to-date,
Michigan-based firms have attracted $123 million in venture capital
investment, with Ann Arbor-based companies taking in about $90 million
of the total. The biggest investment ($51.75 million) went to Cerenis
Therapeutics, a bio-tech firm with twin headquarters in France and
Ann Arbor that's composed mostly of ex-Pfizer employees.
"This is
a testament to the quality of companies that Michigan is creating,"
says LeAnn Auer, executive director of the Michigan Venture Capital Association.
The
total dollar amount invested is up 35 percent compared to 2009
year-to-date. However, the number of deals is lower, with 12 by August
of last year and 10 so far this year. Life science firms took in the
biggest chunks, with 57 percent of the total investment dollars last
year and 75 percent so far this year. Cleantech firms were the only
other ones to capture double-digit shares over each of the last two
years. Other firms, including IT, received token amounts.
The
jump in venture capital investment can be attributed to economic
improvements over the last year. A double-digit recession could force a
drop in those numbers, Auer says, but barring that she expects to see a
steady increase in the near future.
"Over the last few years we
have had a couple of investment firms that have capitalized," she says.
"Now they're being active."
Source:
LeAnn Auer, executive director of the Michigan Venture Capital
Association
Writer: Jon Zemke
Hamztec wins $1M grant to research an end to hair pulling
Source: Concentrate, 9/1/2010
Ann Arbor-based Hamztec has received a $1
million grant from the National Institute of
Health. The company plans to use
the proceeds for development of a product that will help people stop
compulsively pulling their hair.
The
Ann Arbor SPARK client will use the grant to hire six people plus a
handful of independent contractors. David Perlman, co-founder of Hamztec
and its only employee, expects his start-up to commercialize its
product within 2.5 years, a timeframe that could be as short as one year
if the company attracts more investment.
Hamztec was co-founded in 2007 by David Perlman
and Joseph
Himle, a professor of
psychiatry and social work at the University of Michigan. The firm's
principal product tracks and helps correct Trichotillomania, a disorder in which people compulsively
pull out their own hair.
"Ninety
percent of this behavior happens out of consciousness," Perlman says.
"They would study or read a book, get up and there is a pile of hair
there and they don't know how it got there."
The product will track hand movement and
set off an alarm when patients pull their hair. A specific code must
then be entered to turn the alarm off. This technology also tracks and
logs the behavior for analysis by mental health professionals.
'This is the first method so a therapist
knows behavior outside of the office," Perlman says.
Source: David Perlman,
co-founder of Hamztec
Writer: Jon Zemke
TCH Pharmaceuticals scores $200K in loans, retains ex-Pfizer talent
Source: Concentrate, 9/1/2010
Ann Arbor-based TCH Pharmaceuticals will
use a $200,000 loan from the state of Michigan to hire four people, all
ex-Pfizer employees.
"These four will be the first employees of
the company," says Thomas A Collet, president and CEO of TCH
Pharmaceuticals.
The 4-year-old company, currently staffed by its
three co-founders, commercializes non-toxic proteasome inhibitors to be
used in therapies that treat inflammatory diseases. It is using
technology licensed from Michigan
State University.
"We have a family of compounds we want to
take into clinical development," Collet says. "They would help us do
that."
TCH Pharmaceuticals (TCH is an acronym for the founders'
last names) is one of five Michigan companies to share the most recent
$530,000 in loans from the state's Company Formation and Growth Fund.
That initiative began in 2007, shortly after Pfizer announced the
closing of its Ann Arbor campus. It's aimed at keeping Pfizer's talent
in-state by accelerating start-up formation and growth. The fund has
made $8 million in loans to a total of 41 life-science companies in Ann
Arbor, Chelsea, Jackson, Livonia, and Saline.
Source: Thomas A
Collet, president and CEO of TCH Pharmaceuticals
Writer: Jon
Zemke
Ann Arborites return to launch Resonant Venture Partners
Source: Concentrate, 9/1/2010
The University of Michigan's Wolverine
Venture Fund is supposed to serve as a real-life proving ground for Ross School of Business
students aiming for a career in venture capital. It's now serving as
the launching pad for a local venture capital start-up - Resonant
Venture Partners.
Two U-M MBA students, Michael Godwin and Jason
Townsend, are using their experience with the $5.5 million student-run
fund as a primary leg for their new Ann Arbor-based VC firm to stand on.
The other leg is the two Michigan natives' entrepreneurial experience
in Silicon
Valley before they decided to return home and set up their own
shop.
"We came back to get our MBAs and enter the venture capital
world," says Jason Townsend, partner of Resonant Venture Partners. "There is
opportunity to enter the venture capital industry here. On the coasts,
the venture funds are being culled."
Resonant Venture Partners
recently made its first investment, teaming up with Silicon Valley-based
True Ventures
to invest $1 million in Ann Arbor-based Scio
Security. The VC firm has attracted two top names to its board in EDF
Ventures' Mary Campbell and Tom
Kinnear, managing director of the Wolverine Venture Fund and head of
U-M's Zell Lurie Institute.
Godwin
and Townsend have a $10 million fundraising target over the next 18
months. They hope to stay planted in Ann Arbor and have $100 million
under management within the next decade. They see a steady pipeline of
high-quality start-ups coming from the University of Michigan and its
office of Tech
Transfer.
"We're hitting the investment trail hard right
now," Townsend says.
Source: Jason Townsend, partner, Resonant
Venture Partners
Writer: Jon Zemke
Research Essential Services receives $100K loan, plans hires
Source: Concentrate, 9/1/2010
Research Essential Services is beginning
to collect ex-Pfizer workers at its home in the Michigan
Life Science and Innovation Center, a Plymouth-based wetlab
incubator run by Ann
Arbor SPARK.
The start-up plans to hire two ex-Pfizer
employees with a recent $100,000 grant it received from the state of
Michigan's Company Formation and Growth Fund. It has already hired two
other former Pfizer workers and two more life science employees with a
$200,000 loan previously received from the fund.
The company was
founded by ex-Pfizer workers and now specializes in providing
preclinical research services tailored to start-up and biotech firms. It
offers professional veterinary care and design and execution of high
quality research protocols in a state of the art facility.
Research Essential Services is one of five Michigan companies to split the
most recent $530,000 in loans from the state's Company Formation and
Growth Fund. That initiative began in 2007, shortly after Pfizer
announced the closing of its Ann Arbor campus. It's aimed at keeping
Pfizer's talent in-state by accelerating start-up formation and growth.
It has made $8 million in loans to a total of 41 life-science companies
in Ann Arbor, Chelsea, Jackson, Livonia, and Saline.
Source:
Michigan Economic Development Corp
Writer: Jon Zemke
U-M, St. Joseph Mercy Hospital team up for statewide blood clot prevention initiative
Source: Concentrate, 9/1/2010
The University of Michigan Medical Center
is taking a leading role in a new state-wide initiative to prevent
blood clots as a way of elevating patient care and cutting health-care
costs.
"The main reason to target this is because it's a communal
problem," says Dr. Scott Flanders,
a professor of medicine at U-M and the director for this project.
"Almost every patient who is hospitalized is at risk for blood clots."
U-M,
Blue Cross Blue Shield of
Michigan, St.
Joseph Mercy Hospital, and 15 other hospitals throughout the state
are working together to take down the blood clot problem as part of the Value
Partnerships, a long-term collaboration among health-care
organizations aimed at improving quality in medical care. This specific
initiative will focus on ensuring the state's major hospitals reduce the
risk of blood clots by studying, benchmarking, and implementing the
best practices to eliminate preventable blood clots.
"Our
initiative is to prevent these things in the first place," Flanders
says.
The first one to two years will be spent on an assessment
of the problem and its various solutions. Picking low-hanging fruit
could reduce the blood clot rate by as much as 50 percent in that time.
Source: Dr. Scott Flanders, a professor of
medicine at the University of Michigan
Writer: Jon Zemke
Ann Arbor's MetaSpring plans to add interns, contractors
Source: Concentrate, 9/1/2010
Safety is in numbers, but the people at
MetaSpring are seeing profits in numbers, too.
The Ann
Arbor-based web-development and marketing firm is partnering with more
local companies for its marketing, design, search engine optimization,
and social media work.
"We have all sort of come to the
conclusion that we have all gone through ups and downs so we are sharing
more work," says Julie Cameron, marketing director for MetaSpring.
The
6-year-old company employs five people, a couple of independent
contractors, and the occasional intern. The firm expects to bring on a
marketing intern or two this fall, along with a couple of independent
contractors to take on the extra work created through more partnerships.
Source:
Julie Cameron, marketing director for MetaSpring
Writer: Jon
Zemke
Ann Arbor SPARK gets $750K for Accelerate Mich Innovation Competition
Source: Concentrate, 8/25/2010
Ann Arbor SPARK is getting ready to break a
lot of ice - between entrepreneurs and investors. During the Big
Chill hockey game later this year they'll be hosting the Accelerate
Michigan Innovation Competition.
The business plan
competition will highlight local resources available to small businesses
and spotlight southeast Michigan's entrepreneurial ecosystem. It will
also expose local entrepreneurs and start-ups to venture capitalists,
angel investors and executive talent from around the world who will be
in Ann Arbor for the hockey game between the University of Michigan and
Michigan State University at Michigan Stadium on Dec. 11.
"When
you start to look at the information and resources that have been
cultivated over the last few years, we expect to have a lot of
high-quality start-ups here," says Michael Finney, president and CEO of Ann Arbor SPARK.
The
Business
Accelerator Network for Southeast Michigan (Ann Arbor SPARK, TechTown, Automation Alley
and Macomb-OU
INCubator) is working to put together what it calls the world's
largest business plan competition. It will feature $1 million in cash
awards, services, staffing and software up for grabs. It is open to
start-ups and entrepreneurs from both inside and outside of the state
that are willing to set up shop in Michigan.
"The future of
Michigan is based on its entrepreneurs and innovators," says David
Egner, executive director of the New Economy
Initiative, which supplied a $750,000 grant to Ann Arbor SPARK for
the event. "They are the people that will drive growth in Michigan for
the next few decades."
The competition will focus on second-stage
businesses and student concepts with long-term viability. It will be
divided into nine categories, including advanced materials, advanced
transportation, alternative energy, homeland security and defense,
information technology, life science, medical devices, next generation
manufacturing and products and services. Students attending any Michigan
university or college can submit their business concepts in a separate
category. For more information about the Accelerate Michigan Innovation
competition, click here.
Source:
David Egner, executive director of the New Economy Initiative and
Michael Finney, president and CEO of Ann Arbor SPARK
Writer:
Jon Zemke
Scio Security lands $1 Million in VC
Source: Concentrate, 8/25/2010
Ann Arbor's Scio Security has pulled down a
big number in venture capital and plans to continue hiring as a result
of this. The 8-month-old start-up co-founded by Dug Song and Jon
Oberheide (both of Arbor Networks
fame) recently landed $1 million from Silicon Valley-based True
Ventures, which lead the initial round of fundraising, and a new venture
capital firm in Ann Arbor called Resonant Venture Partners.
"The biggest criteria for us are people, by far, because we invest so early," says Puneet Agarwal, partner with True Ventures. "We jumped at the chance to partner with Dug and Jon. … We are betting on Dug and Jon building a great company in Ann Arbor."
Scio Security, which calls the Tech Brewery
home, has doubled its staff to four people and an intern so far and
expects to hire at least two people in engineering and marketing.
Scio Security focuses on providing new Internet security
solutions for sensitive data, such as health-care information and
financial transactions. Hackers have recently focused efforts on
shadowing users or stealing their passwords and other security
information to access financial data. Scio Security has created a
variety of solutions, some patent pending, such as an immediate call
back to confirm the correct person is trying to access information.
"The
weakest password of your most gullible employee is the new firewall,"
says Song, CEO and co-founder of Scio Security. "That's where you have
to focus your security."
Source: Dug Song, CEO and co-founder of Scio Security and Puneet Agarwal, partner with True Ventures
Writer: Jon Zemke
Merit Network scores $69.6M grant to expand broadband in UP
Source: Concentrate, 8/25/2010
When Merit Network counts the money from
the grants it receives, it takes six zeros off the end to make the math
easier. The Ann Arbor-based non-profit recently received a $69.6 million
federal grant on top of the $33
million federal stimulus grant it received earlier this year.
The
latest federal grant (thanks, federal stimulus) will pay for spreading
high-speed Internet across Michigan's Upper Peninsula and much of its
northern Lower Peninsula. That should add up to 1,000 miles of
fiber-optic infrastructure across 29 counties. The idea is to help
create more economic opportunity in these rural areas by increasing
access to the Internet.
"We're trying to push this economic
development into rural areas," says Elwood Downing, vice president of
member relations & communications for Merit Network. "We're trying to create that
economic benefit across the whole state."
The Ann Arbor-based
non-profit manages high-bandwidth communication lines between the major
universities in the Midwest, in cities like Ann Arbor, Chicago and
Detroit. It has a staff of about 77 people and five interns from the
likes of the University of Michigan and Eastern Michigan University. It
has hired at least 10 people in the last year and has four positions
that are either being filled or are about to be filled.
"We're
looking at a minimum of at least six new staff," Downing says. "At least
one of them will be a remote commuter from the northern part of the
state."
Source: Elwood Downing, vice president of member
relations & communications for Merit Network
Writer: Jon
Zemke
Ann Arbor's Algal Scientific doubles staff, wins award
Source: Concentrate, 8/25/2010
A little over a year ago Algal Scientific
was a project for four students at the University of Michigan and
Michigan State University. With it they won the U-M/DTE Energy Clean
Energy Prize. Today that project is now a company that employs the four
student founders... and then some.
The start-up, based in the Michigan Life Science and Innovation Center,
took the $65,000 from the Clean Energy Price and another $180,000 from
the Michigan Pre-Seed Capital Program to create a staff of nine people.
"In general we have staffed up in a number of areas," says Paul Hurst, CEO of Algal Scientific.
Algal
Scientific is working on a waste-water treatment system that uses algae
to remove nutrients from contaminated water leaving the raw materials
for biofuels. Earlier this summer the company set up a pilot system in a
waste-water treatment plant and expects to set up a couple more within a
few months.
"It's much larger," says Geoff Horst, CSO of Algal
Scientific. "We're dealing with hundreds of gallons instead of dozens of
gallons in the lab."
The company expects to establish a
demonstration scale project within the year and start generating
revenue. It plans to continue hiring during this time, too.
Algal Scientific also won the Clean Energy
Investment Competition at the New Energy New York Symposium earlier
this month.
Source: Paul Hurst, CEO of Algal Scientific and Geoff Horst, CSO of Algal Scientific
Writer: Jon Zemke
U-M lands $26M in biz education, software grants
Source: Concentrate, 8/25/2010
The University of Michigan has scored a
couple of large grants, adding up to $26 million for nanotechnology
research and business education.
Dennis Sylvester, an associate
professor of electrical engineering and computer science at U-M, is part
of a national team that is splitting a $10 million federal grant. The
money will fund a study of how software can make nanoscale computer
components (circuits and chips) more efficient.
"The idea of
this project is to design the software so it takes some of the burden
off of the hardware," says Sylvester. He will be working on the project
with a small team of U-M students, including a post-doctorate student.
He is also hoping to involve more university faculty into the study.
About
$16 million from the U.S. Department of Education is going to seven
centers in the University
of Michigan International Institute. The grants will help develop
the nation's capacities in international and area studies, foreign
languages, and international business education. The grants will support
language and area studies training, curriculum development, library
acquisitions, outreach to K-16 students and educators, as well as public
programs such as lectures, conferences and films.
Source:
University of Michigan and Dennis Sylvester, associate professor of
electrical enegineering and computer science at the University of
Michigan
Writer: Jon Zemke
Ford invests $76M in U-M for automotive research
Source: Concentrate, 8/25/2010
When it comes to investing in higher
education research at Ford Motor Company, no school gets quite as much
love as the University of Michigan.
The Dearborn automaker
recently released that it has invested $60 million in university
research over the last 20 years, much of which went to schools in
southeast Michigan, such as Wayne
State University and the University of Detroit-Mercy. The
University of Michigan received the lion's share of that funding, taking
in three of the 20 grants funded by the carmaker.
"I certainly
see a substantial expertise at the University of Michigan," says Ed
Krause, an external alliances manager at Ford. "Our alliance with them has gone
extraordinarily well. We're very happy with the quality of work from
there."
U-M
has collected $76 million in research grants from Ford over the length
of its relationship. That has set U-M up as one of Ford's two strategic
partners for higher education research. The other is MIT. As one might
expect, the research
projects typically revolve around engineering. One of the latest at U-M
concerns controlling vehicle emissions.
Source: Ed Krause, an external alliances manager at Ford Motor
Company
Writer: Jon Zemke
Dynamic Advisory Solutions opens Ann Arbor office, plans to hire
Source: Concentrate, 8/25/2010
The decision for Dynamic Advisory
Solutions to open an office in Ann Arbor was an easy one. At least it
was when the Troy-based financial firm took a quick look at Tree Town's
entrepreneurial ecosystem.
"It's because of the local entrepreneurial community," says Ren Carlton, president and CEO of Dynamic Advisory Solutions. "We think it's a great place to be."
The
10-year-old company specializes in financial consulting and making
growth financially viable for small- and medium-size firms. Dynamic
Advisory Solutions essentially out sources the CFO and controller jobs
for growing companies, so the founder can focus on the strategies that
make their start-ups bigger and more profitable.
Dynamic
Advisory Solutions has one person at its Ann Arbor office, but Carlton
expects that number to grow soon. He expects the company to hire another
person within the next six months and a few more within the next year.
Source: Ren Carlton, president and CEO of Dynamic Advisory Solutions
Writer: Jon Zemke
Swift Biosciences nails down $3M in VC
Source: Concentrate, 8/18/2010
Usually a few million dollars in venture
capital doesn't go all that far with life sciences start-ups, but Swift
Biosciences expects to stretch its $3 million in seed capital all the
way to commercialization.
"We expect to have products ready for
the market with this money," says David Olson, president and CEO of Swift Biosciences.
The
Ann Arbor-based start-up is developing molecular biology reagents for
research and diagnostic applications that provide new ways to examine
disease-related genes. This technology is expected to help researchers
analyze samples faster, at a higher volume, and at a lower
price-per-sample.
The 1-year-old firm started with two people and
now employs four. It is in the process of hiring a fifth. It expects to
make two more hires within the next six months as it ramps up research,
development, and commercialization of its product. Houston-based DFJ Mercury led the
latest round of fundraising and helped form the company at its outset.
Source: David Olson, president and CEO of
Swift Biosciences
Writer: Jon
Zemke