August 8, 2013 @ 8:18 am

Strong B2B Base, Deep Roots in Building Sustainable Businesses: Why Michigan is for RPM Ventures

RPM VenturesRPM Ventures, founded in 2000, is a seed and early stage venture firm with $75 million under management. RPM concentrates its investing in the information technology (IT) space, on companies in specific disciplines.  RPM specifically seeks opportunities in businesses where the firm’s West Coast experience and Midwest roots add strong value: Retail automotive software, industrial and retail enterprise solutions, E‐commerce, online marketplaces, and cloud and social media infrastructure.

 

RPM co-founders Tony Grover and Marc Weiser both attended University of Michigan, and chose to come back to the state to grow their careers.  Before starting RPM, Grover and Weiser’s experiences included working for Intel and starting three venture-backed IT ventures.

 

“The story isn’t that we left the excitement of the coast to come back to Michigan, but that we deliberately chose to start RPM here,” said Grover.  “Our presence in Michigan is a strong asset in the sectors where we focus; our portfolio companies can tap into the resources here in the Midwest and use those resources to leap ahead of their competition.”

 

“Michigan offers the relationships and global connections that few other locations can match,” Grover added.  “We’re home to major automotive manufacturers, Tier 1 automotive suppliers, Whirlpool, and Dow Chemical – to name a few.  Some of these companies are focused on consumer products, some on industrial B2B, but every single one has large international presence and all are using IT to make their business more efficient.  For RPM’s portfolio companies, those factors are enough to make the argument for ‘Why Michigan?”

 

The quality and type of investment that RPM is able to find in Michigan strengthens that argument. The firm has made a new investment in Michigan every six months for the last 18 months.  RPM led investment rounds in DeepField, Kontextual, and ArborMetrics. All of these recent investments are reflective of Michigan’s ever growing and strengthening entrepreneurial economy.

 

“DeepField was co-founded by two early Arbor Networks employees and is a great example of a successful local company that spawned entrepreneurs who launched several ground breaking new startups,” explained Grover.  “Kontextual was founded by Kurt Skifstad, a local tech CEO and serial entrepreneur who has a track record of success here and wanted to stay in Michigan. A prominent University of Michigan faculty member founded ArborMetrics, and its seed round was led by Michigan VC firm Arboretum Ventures.  All three of these companies have very exciting stories that center on wanting to grow in Michigan and being able to find the talent and funding to help them do it.”

 

“When you look at what Michigan has to offer entrepreneurs and venture backed companies, you see that we have a strong B2B base and deep roots in building sustainable businesses.   Those deeps roots are actually changing our present economy.  We’re starting to have more successes here, gaining experience here, and we’re growing the entrepreneurial talent base here,” Grover added.  “Recently, we’ve seen successful exits, like Arbor Networks, HealthMedia and Accuri Cytometers, and increasing VC activity. It hasn’t happened overnight, but it’s happening here now and building the base for continued future entrepreneurial growth.”

 

Looking forward, Grover is optimistic that this upward trend will continue.  “We’ve spent a decade growing RPM and are confident that the areas where we’ve built our expertise are our future. We’ll keep doing what we do, and we’re excited for how things are changing in the market and in this state.  We’re seeing more capital, talent, and experience accruing in Michigan, and that provides a great outlook for the future.”

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April 25, 2011 @ 10:35 am

PRESS RELEASE: With Support of the Michigan Growth Capital Symposium, In-State Investment Activity Is Burgeoning, According to Michigan Venture Capital Association Report

Combined capital under management has grown 206 percent in just five years

Ann Arbor, Mich. – April 12, 2011 – As the state of Michigan—and more generally, the Midwest—continues to transition from its rust belt roots of auto and manufacturing into an innovation economy driven by clean tech, life sciences, and entrepreneurship, the soon-to-be released annual report from the Michigan Venture Capital Association (MVCA) shows that investors are noticing. The report is being released in advance of the 30th annual Michigan Growth Capital Symposium, which showcases the innovation within the state and the surrounding region to highlight the “Best of the Midwest” companies and bring them together with leading regional and national investors.

According to the MVCA annual report, which will be released to the public the week of April 25, the state’s investment landscape has grown dramatically in the past five years and is at a major inflection point. Since 2006, over $735 million has been invested into over 120 deals, representing a 40 percent growth in the number of investments made and capital invested in Michigan over the first half of the decade. Other highlights from the report include:

  • A 60 percent growth in the number of venture capital firms operating in the state since 2006, with 24 currently in business;
  • Combined capital under management reaching $2.6B—a 206 percent increase since 2006;
  • Nearly 80 venture-backed companies are located in Michigan; and,
  • A 75 percent growth in the number of venture-backed companies in the state in the past five years.

“It has been a record period of growth for venture capital in Michigan, and better yet, we have abundant success stories to support the numbers, like the notable exits of Esperion, HealthMedia, Arbor Networks, HandyLab and Accuri,” said LeAnn Auer, MVCA executive director. “We’ve worked tirelessly to help Michigan-based venture investors develop and succeed, and the Michigan Growth Capital Symposium has marched in lock-step with us to ensure these firms can connect with the high growth potential startups that will lead to successful exits and a bright economic future for the state.”

Year after year, the Symposium, the state’s largest and most highly sought after venture capital event, showcases the most-promising startups emerging from the region and its top-tier research universities. During the past 10 years alone more than 300 companies have presented, including nearly a quarter that were University-based spinouts representing leading research universities within the state of Michigan and the greater Midwest—with over 70 percent of those drawn from members of the State of Michigan’s University Research Corridor, which have gone one to raise $423 million in funding and experience six had successful exits. Of those 300-plus, 71 percent have raised capital totaling $1.7 billion in investment dollars. Further, 20 percent of the companies funded have gone on to realize successful exits.

“The Symposium represents the many people and organizations that work tirelessly to prove to the world that Michigan has what it takes—the research, the investment power and the talented entrepreneurs, among other things—to develop into an innovation hub that could hold its own with the likes of Silicon Valley and Boston,” said Symposium founder David Brophy. “And this year, I can say with confidence that we’ve arrived on the map. It wouldn’t surprise me if the next Accuri or even the next Google were among the forty presenting companies at this year’s event, and it would be a huge win to have a local firm expose them to the world.”

The Michigan Growth Capital Symposium is taking place May 10-11 at the Marriott Resort in Ypsilanti. It is hosted by the Ross School of Business’ Zell Lurie Institute at the University of Michigan with support from the Michigan Venture Capital Association. Visit www.michigangcs.com to register to attend, and follow conversations about the Symposium by tracking #MGCS on Twitter.

About the Michigan Growth Capital Symposium (MGCS)

MGCS is the original university-based venture fair, which was first held in 1979. This nationally attended two-day event provides an opportunity for financiers to connect with up-and-coming Midwest businesses and learn about emerging technologies. The Symposium offers the opportunity to build relationships with an unparalleled business network of distinguished private equity industry leaders and entrepreneurial business professionals. Entering its 30th year, MGCS continues to draw top investors from coast to coast. MGCS is presented by the Center for Venture Capital & Private Equity Finance at the Ross School of Business at the University of Michigan with support from the Michigan Venture Capital Association.

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February 8, 2011 @ 3:59 pm

MVCA Roundtable: VC & C- Level Executive Breakfast

Michigan entrepreneurs Rob Malan (Co-founder & Chief Technology Officer, Arbor Networks), Ted Dacko (Former President and CEO, HealthMedia Founder, Arbor Dakota Strategies), Josh Linkner (Founder and Chairman, ePrize Managing Director, Detroit Venture Partners), and Tim Mayleben (President & CEO, Aastrom Biosciences) joined moderator Mina Sooch for a lively panel discussion on the challenges and opportunities of running a venture-backed business in Michigan.

All panelists agreed that Michigan is a good place to start a business, but cited lack of talent and capital as issues for our state’s entrepreneurs.  Linkner empathized the importance of culture in creating a valuable and sustaining business, while Dacko discussed how measurable outcomes were vital.   Mayleben talked about marathon fundraising campaigns he underwent at Esperion and also named talent attraction as the biggest challenge he sees in locating a life sciences business in Michigan.  Malan envies California’s non-enforceable non-compete law and suggests that Michigan adopt a similar position to encourage serial entrepreneurialism.

The panelists were:

Ted Dacko
Former President and CEO, HealthMedia
Founder, Arbor Dakota Strategies
Ted Dacko, the founder of Arbor Dakota Strategies, has more than 36 years of experience in executive-level management and leadership, principally in the area of software applications and solutions. His career has primarily been spent following the founder where, as CEO, he has been credited with taking great ideas and turning them into great companies.

Most recently, Ted was CEO of HealthMedia® Inc., which he took from a small, near-death company to a $30M annual SaaS business. The company was sold to Johnson & Johnson in 2008 and resulted in an 18 to 1 return on invested capital for Chrysalis Ventures in a six year time frame and a 10 to 1 return on invested capital for Arboretum Ventures which invested a short time later. This was accomplished during the worst economic time in recent history.

Josh Linkner
Founder and Chairman, ePrize
Managing Director, Detroit Venture Partners
As the founder and CEO of ePrize, Josh Linkner has led a revolution by dislodging the old guard and dominating the industry through disruptive innovation and creativity.  ePrize has produced over 5,000 industry-leading interactive promotions across 36 countries, for 74 of the Top 100 brands including Coca-Cola, at&t, The Gap, Procter & Gamble, Disney, Dell, adidas, Citibank and Microsoft. ePrize has won dozens of awards including Red Herring’s Top 100 Technology Firms in North America, Inc. 500 (five years in a row), #1 fastest-growing on PROMO 100, Fast Company’s Fast 50 Reader’s Choice, and 101 best places to work in Michigan.

Josh has won several business, technology, and design awards including the Ernst & Young Entrepreneur of the Year Award, Crain’s 40 under 40, and Automation Alley’s CEO of the Year. His highly-anticipated second Book – Disciplined Dreaming: A Proven System for Breakthrough Creativity – is due out in February, 2011 (Wiley / Jossey-Bass). The book offers a 5-part process that will transform your organization – or your career – into a non-stop creativity juggernaut.

Rob Malan
Co-founder & Chief Technology Officer, Arbor Networks
Rob brings over twenty years of research experience in computer networking and security to Arbor Networks. Rob, whose thesis work at the University of Michigan formed the basis for Arbor Networks’ technology, is the author of the company’s patents. Rob has successfully transitioned technology from research prototype to product during his tenure in industry, which includes work at the IBM T.J. Watson Research Laboratory and Hewlett-Packard. Rob began his networking career working as a researcher on the Mach operating system project at Carnegie Mellon. He has authored 18 papers published in top-tier computer security and networking journals and conference proceedings. Rob holds a Ph.D. and MSE in Computer Science from the University of Michigan and a B.S. in Computer Engineering from Carnegie Mellon.

Tim Mayleben
President & CEO, Aastrom Biosciences
Tim joined Aastrom as a member of the Aastrom’s board of directors in June 2005. Previously he was an advisor to life science and healthcare companies through his advisory and investment firm, ElMa Advisors. He was formerly president, chief operating officer and a director of NightHawk Radiology Holdings, Inc.  Mr. Mayleben also served as chief operating officer of Esperion Therapeutics, where he led the raising of more than $200 million in venture capital and institutional equity funding and later negotiated the acquisition of Esperion by Pfizer in February 2004. Mr. Mayleben is on the advisory board of the Wolverine Venture Fund and serves as a director for several private life science companies. He holds an MBA with distinction from the J.L. Kellogg Graduate School of Management at Northwestern University and a BA in business administration from the University of Michigan Ross Business School.

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November 1, 2010 @ 1:35 pm

NEWS RELEASE: Michigan Venture Capital Association celebrated award winners, appoints 2011 Board of Directors at annual dinner Nov. 15

ANN ARBOR, Mich.—Celebrating “A Year of Exits”, the Michigan Venture Capital Association held its annual awards dinner for its members and guests November 15 in Ann Arbor.  The statewide membership organization honored several Michigan venture firms as well as venture capital recipient companies for their successes:

  • MVCA “Michigan 100” Award winner Cerenis Therapeutics of Ann Arbor, for raising over $100 million in venture capital;
  • Michigan’s new venture firms: Huron River Ventures, Michigan Accelerator Fund Management, and Resonant Ventures;
  • Multiple venture capital investment exits, both non-Michigan companies with Michigan venture investors and Michigan-based companies:

o   LenSx Lasers (Venture Investors)

o   Greenplum (EDF Ventures)

o   ZyStor (Apjohn Ventures & Venture Investors)

o   CardioMEMS (Arboretum Ventures)

o   Ikano Therapeutics (Apjohn Ventures)

o   Arbor Networks (EDF Ventures)

o   HandyLab (EDF Ventures, Wolverine Venture Fund, Arboretum Ventures, Ardesta Capital, Dow Venture Capital)

Jeff Williams, former CEO of HandyLab and current CEO of venture-backed Accuri Cytometers, was named MVCA Entrepreneur of the Year.

 

“The wind is in our sails,” stated LeAnn Auer, Executive Director of the MVCA, in her remarks before the dinner.  “It’s been a year of exits, as many of our venture capital firms have successfully exited portfolio companies located both here in Michigan and elsewhere.  In addition, venture capital financings have already exceeded 2009 levels.  These successes bode well for future growth in our community.  I’m looking forward to this year’s celebration.”

The Michigan Venture Capital Association will also announce its 2011 Board of Directors:

  • Ron Reed (Chairman), Managing Director, Seneca Partners
  • Tom Kinnear (Vice-Chairman/Treasurer), Managing Director, Zell Lurie Institute at U-M Ross School of Business
  • Tim Petersen (Vice Chairman/Chairman-Elect), Managing Director, Arboretum Ventures
  • Uzma Ahmad (Board Secretary), Attorney, Dykema Gossett PLLC
  • Jim Adox, Managing Director, Venture Investors
  • Jeff Bocan, Managing Director, Beringea
  • Hugo Braun, Co-Founder, North Coast Technology Investors
  • Greg Main, President & CEO, Michigan Economic Development Corporation
  • John McIlwraith, Managing Director, Allos Ventures
  • Chris Rizik, CEO & Fund Manager, Renaissance Venture Capital Fund
  • Skip Simms, Managing Director, Ann Arbor SPARK
  • Mina Sooch Partner, Triathlon Medical Ventures; Managing Director, Apjohn Ventures
  • Jody Vanderwel, President, Grand Angels
  • Ken Van Heel, Director, Alternative Investments & Venture Capital, Dow Chemical Company
  • Donald Walker, Managing Director, Arbor Partners

About the MVCA

The MVCA is a trade organization designed to bring together venture capital industry participants in the state of Michigan.  The organization’s goal is to grow and sustain a vibrant venture capital community in Michigan.  Membership includes private venture capital funds, corporate venture capital funds, private equity firms, angel investors, and entrepreneurial infrastructure participants.  The MVCA is a vehicle to bring together industry participants and to provide a concerted voice for Michigan’s venture capital industry.  www.michiganvca.org

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The MVCA is a non-profit trade organization designed to bring together venture capital industry participants in the state of Michigan. The organization's goal is to grow and sustain a vibrant venture capital community in Michigan.
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