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 30^th 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 30^th 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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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.

InfoReady Completes $1.1 Million in Seed Funding

Company’s Social Media Technology Addressing $650 Billion Information Overload Problem

Ann Arbor, MI – Startup software company InfoReady Corp. has raised $250,000 in seed capital from Automation Alley, closing out $1.1 million in first-round funding.

InfoReady’s core technology helps knowledge workers find relevant information quickly with advanced search techniques, fosters communication with project peers via social-networking collaboration, and facilitates automated workflow management in one centralized project interface. The company’s flagship product, In4Grants™, helps grant seekers better manage the complex pre-award process.

Tom Anderson, Senior Director and Director of Entrepreneurism at Automation Alley, Michigan’s largest technology business association, said InfoReady’s leadership and interactive solutions were an attractive draw.

“InfoReady’s experienced management team has developed a sound product that improves how data-driven organizations conduct business,” Anderson said. “The company’s core technology transforms data into actionable knowledge and supports the ability for multiple people to work together in a single workspace. It all boils down to better collaboration.”

The round will immediately help fund the expansion of sales, marketing and new product deployment. The company recently rebranded In4Grants from InfoReady4Grants and launched a new website. Longer-term developments include new products to address the $2 billion—and growing—search, discovery and collaboration segment of the information-management market.

InfoReady is led by veteran technology entrepreneurs Bhushan Kulkarni, founder of telecom InTouch as well as IT solutions and services company GDI InfoTech, and Jim Diggs, an original executive team member at the successful startup BlueGill Technologies. Kulkarni said grant seekers in particular are in need of new search and collaboration tools to contend with competitive pressures.

“Organizations realize grant funding is no longer a luxury,” said Kulkarni, CEO. “Grants are now mission critical, and administrators say they are spending too much time searching for opportunities and managing the pre-award process. In4Grants makes their jobs easier and gives them substantially more time to craft winning proposals.”

In4Grants is being used by more than 25 universities, economic-development organizations and local governments including Eastern Michigan University and Ann Arbor Spark.

For organizations such as these, social-media functionality is an integral part of limiting information overload. Each year, emails and other distractions cost the U.S. economy $650 billion in lost productivity and waste 28 percent of workers’ time, according to a recent report from research firm Basex. InfoReady addresses this problem with information filtering and social-media collaboration—which drastically reduce confusing email threads and other distractions.

Skip Simms, President and CEO of Ann Arbor Spark, an economic-development organization, said In4Grants is offered to member companies because the product helps startups win funding more efficiently.

“Many companies get their start with grant funding, and In4Grants is focused on this process,” Simms said. “Companies that have been seeded with grant funding are attractive to investors because risk is reduced. And anything that can positively impact the ratio of fund seekers to fund recipients is a boon for Michigan and the startup community as a whole.”

Founded in 2010, InfoReady has received investments from Michigan’s three major seed funds and is now over-subscribed. Investors include $250,000 from the Ann Arbor Spark-administered Michigan Pre-Seed Capital Fund, $50,000 from First Step Fund, and advisory board members Ted Dacko and Terry Cross. The advisory board has deep experience in relevant areas of InfoReady’s strategy, including Dacko, who headed HealthMedia’s successful sale to Johnson & Johnson in 2008.

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About InfoReady Corp.

InfoReady deals with information overload…so you don’t have to.

An information-management innovator backed by decades of deep IT know-how, InfoReady’s core technology helps knowledge workers find relevant information quickly, fosters communication with project peers via social-media applications, and facilitates automated workflow management in one centralized project-based interface. The Ann Arbor, Michigan-based company’s flagship product, In4Grants™, helps grant seekers better manage the complex pre-award process.

To see how InfoReady and In4Grants are changing how the world manages data, go to www.in4grants.com.