February 20, 2014 @ 6:23 am

Drive Capital Recognizes Benefits of Doing Business in the Midwest

There is great venture capital news for the Midwest. Drive Capital has recognized that the next great technology company could come from right here.

 

“Silicon Valley is great,” he says. “But everyone forgets that 40 years ago it was just apple fields and orchards. When we look around the Midwest, we see a lot of the raw ingredients for what could potentially be a great economic driver for tech, which over time will create great industries.”

 

Read the whole article.

 

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February 17, 2014 @ 9:21 am

Michigan eLab Invests in Michigan Startups

A perfect storm of talent, ecosystem and history all contributed to Michigan eLab choosing to invest in startups in the state, but it’s a storm that was brewing for some time. Not only did Michigan’s heritage of innovation and engineering compel the founders to choose Michigan, almost all of the founding partners have roots here… and an abiding respect for the tech wizardry that’s emerged from the state.

 

“It’s hard to not be amazed by all of the tech giants that came from Michigan,” Michigan eLab founding partner Doug Neal explained. “Google, iPod, Nest, Twitter, Microsoft, Sun – the amazing talent behind those disruptive companies all came from Michigan. There’s just something about Michigan, whether it be talent or the network of support here or a culture of creating and building things, that make it a natural hub for disruptive technologies and talented entrepreneurs.”

 

Neal, who moved to California after college and soaked up the startup lifestyle, wanted to raise his family in Michigan after selling the startup he founded. And, as much as he wanted to give his family the ideal life, he wanted to give back to the state he’d called home for most of his life.

 

“While in California, experiencing the startup culture and launching my own venture backed tech company, I learned the importance of ecosystem and the power of a strong network,” he explained. “Michigan eLab was founded to bridge the talent, capital and customers from Silicon Valley to Michigan and invest in the next generation of technology startups that exist here.  Most non-Michigan venture funds that come to Michigan do so as part of a broader geographic independent strategy.  Michigan eLab is laser focused on bridging only two locations:  Silicon Valley and  Michigan.”

 

“Michigan is an underserved market, and so many investors continue to fly over our state and they’re missing tremendous opportunities,” Neal added. “We have a passion for that early, messy stage of a startup where there’s tremendous opportunity and where being able to bring the talent, capital and customers together can have tremendous impact.”

 

The firm is focused squarely on those high impact opportunities, specifically in digital health care, big data, mobile and technology that connects the physical world to the Internet, such as wearables, automotive technology and embedded sensors. Its first investment, in the startup Fonemine, reflects its vision for the type of startup that can thrive in the Michigan ecosystem.

 

“Fonemine highlights multiple aspects of the Michigan eLab approach,” Neal explained. “The company is headquartered in Silicon Valley, but we convinced them to open a design center here to tap in to engineering talent in Michigan. We were also able to connect someone from the eLab coaching network – in this instance, David Sergura, founder and CEO of VisionIT – to help the startup move forward. David is an amazing and very successful Michigan entrepreneur who brought expertise in enterprise sales and a large existing customer base to Fonemine. It’s a great example of how Michigan eLab’s network, and the network of expertise in this state, can accelerate the growth of a company we invest in.”

 

Although Michigan eLab just launched a year ago, it completed its first closing last fall. It’s wrapping up the fund raising on Fund I this year, and looking at other exciting investment opportunities.

 

“There are a lot of things that have me geeked for the coming year,” Neal said. “The significant interest from first time venture capital investors to be part of Michigan eLab Fund I is exciting and we’re seeing a growth in disruptive technology companies coming out of the ecosystem in Michigan. From low-powered sensor technology to cloud and virtualization technology.”

 

“It’s the technology that solves really big problems that gets everyone excited, generates interest and delivers outsized returns,” he added. “Michigan eLab is committed to finding, funding and nurturing those startups and we are looking for entrepreneurs that want to change the world!”

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September 24, 2013 @ 3:55 am

EDF Ventures Announces Portfolio Exit

Arxan Technologies, Inc., an EDF Ventures portfolio company in the software security sector was sold to TA Associates, a leading global growth private equity firm.  Terms of the transaction were not disclosed.

 

Arxan is another example of EDF’s strategy of investing in early-stage companies formed around technology developed  at universities.  Arxan’s  technology was  spun out of Purdue University’s world renowned CERIAS Institute:  Center for Education and Research in Information Assurance and Security.

 

 

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June 24, 2013 @ 8:26 am

New Michigan Angel Fund Offers New Opportunities for Funders, Startups

Michigan Angel Fund

The Michigan Angel Fund (MAF) is a for-profit, professionally managed equity fund focused on capital efficient early stage companies located in Michigan. It is a $2 million fund that, with nearly 70 members, is the largest angel organization in Michigan.

 

“There are two really unique aspects to MAF,” explains managing director Skip Simms.  “MAF flipped the traditional angel model on its head by raising a fund first, reaching out to existing angels around the state, and people new to the angel community.

 

MAF is looking to fund companies that need $1-4 million in total investment to get to profitability.  “Most VCs aren’t interested in these investments because these companies are too small,” Simms explained.  “In reality, the majority of startups don’t need the amount of capital that can generate the size returns a VC needs.  We believe these smaller companies can still generate significant outsize returns comparable to VC returns on an IRR basis, just smaller dollar amounts.”

 

MAF is also unique because its managing member, Ann Arbor SPARK, is a non-profit economic development organization that provides support to the fund and its funding recipients.  Ann Arbor SPARK, as managing member, coordinates screenings of fund applicants, conducts due diligence, and works with the New Enterprise Forum to prepare companies for their investor presentations.  Ann Arbor SPARK also handles back office work on behalf of MAF.

 

“People wonder why Ann Arbor SPARK, an economic development group and non-profit, decided to create a for-profit identity and get in to managing an angel fund,” Simms said.  “If you look back a few years ago, it was apparent that the companies Ann Arbor SPARK and other groups were helping were all struggling to raise funds, mostly because they didn’t need a large investment, and weren’t quite right for VCs.  On the flip side, Michigan is a top 10 state for high net worth individuals, yet we didn’t have a lot of angels investing in these companies. We need to develop an angel funding culture. By supporting MAF, Ann Arbor SPARK brought more individuals in to the angel arena, and made it easier for startups to find capital in the state.”

 

Startup BioPhotonics Solutions is the first company to benefit from MAF’s focus on Michigan businesses.   The company, a Michigan State University spin out venture, is developing technology that automated the process of shaping and compressing ultrashort (femtosecond) laser pulses, ultimately improving their utility.  In addition to funding, MAF helped find BioPhotonics’ CEO Kyomi Monro.

 

“It’s important that MAF have an active role in its portfolio companies; by having a hands-on approach, MAF delivers valuable support beyond just funding the business,” Simms said.  “The angel community backing MAF offers a very diverse and significant depth of experience that can be a big help in getting a startup on the fast track to success with the connections and wisdom of its members.”

 

Going forward, Simms said that MAF will shift its focus from closing the fund to making investments.  “A year from now, we want to have six to eight companies in our portfolio,” he explained.  “At that point, we can begin thinking about raising another fund to keep MAF going.  The true measure of our success in a year is whether MAF’s 70 investors are happy with the program, its process and want to keep it going and keep making great things happen here in Michigan.”

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June 18, 2013 @ 5:02 pm

Michigan Venture Capital on ‘Michigan Matters’

Chris Rizik, CEO of Renaissance Venture Capital Fund and Hyaat Chaudhary, CEO of Outdoor Hub were interviewed on Michigan Matters this past Sunday. Watch them talk about the increase in venture capital funding in Michigan, sustained by the talent and technology.

Watch the Michigan Matters interview.

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May 20, 2013 @ 11:10 am

MVCA Research Report: Michigan Jumps to 15th for VC Activity, $242M Invested in 2012

FOR IMMEDIATE RELEASE — MAY 20, 2013 – ANN ARBOR, MICH. — The Michigan Venture Capital Association’s annual research report, a compilation and analysis of investment activity, shows that 2012 was a banner year for venture capital (VC) in the state.  Compared to the national trend of declining VC funds and activity, funding activity and fund sizes in Michigan continued strong and steady growth last year.  In 2012, Michigan jumped from 25th to 15th in the national VC ranking — one of the largest increases in venture funding last year.

 

“The data reported in MVCA’s research report tell a compelling story about Michigan’s success in growing and nurturing an innovation-based economy,” said Carrie Jones, MVCA executive director.  “The venture capital community in Michigan continues to mature, with more VC under management among firms here than ever before as well as a steady increase in out-of-state funds establishing a presence in the state.  In tandem, Michigan’s entrepreneurial ecosystem continues to mature and strengthen, and more companies than ever before are attracting VC funding.”

 

The MVCA data shows that there are 29 venture capital firms doing business in Michigan. In 2012, venture capital firms invested $242 million in 33 deals in Michigan.  An additional $12.5 million in a combination of angel and pre-seed funding was invested into these same deals.

 

The state has 106 active companies that have received venture capital or angel investment. While the majority of these companies are in the life sciences, the number of companies in other sectors are growing, most notably those focused on information technology.

 

Growth in Michigan venture funds has been steadily trending upward.  In 2012, the amount invested by VCs, average fund size, capital under management all increased, as did available capital for new investments and the number of investment professionals. This growth has, in part, come from out-of-state funds opening offices in Michigan to tap into Michigan’s growing deal flow.

 

“Attracting outside investment to Michigan infuses the economy with new money that can help a company grow here,” Jones added.  “Entrepreneurs are taking notice of this trend; thanks to the successful venture community in Michigan, more entrepreneurs are considering the state as a destination to locate and grow their business.”

 

About the Michigan Venture Capital Association

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. 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. For more information, visit www.michiganvca.org.

 

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January 18, 2013 @ 10:21 am

Beringea Invests In Abe’s Market, Online Retailer For Natural Products

FARMINGTON HILLS, Mich – Beringea, Michigan’s largest and most active venture and expansion-stage capital investor, has invested in Abe’s Market, the online destination for discovering and experiencing natural and organic products. The investment was part of Abe’s $5 million financing round, led by Carmel Ventures with existing investors Index Ventures and Accel Partners, and new investor OurCrowd. Abe’s Market is the 28th new investment made by the InvestMichigan! Growth Capital Fund since its inception.

Abe’s Market has become the premier online destination for helping people live a better, more conscientious lifestyle. The company offers people an easy-to-navigate, inviting place to connect with, learn about and buy from passionate and innovative merchants offering thousands of natural and organic food, baby, home, hygiene, fashion, lifestyle and pet products. Abe’s Market is using the new funds to fuel its growth as an authority in the green and natural space, making key investments in marketing, talent acquisition, technology enhancements, content creation and product expansion.

“Over the past decade, consumers have begun to understand the impact natural and organic products have on health, wellness and the environment.  Abe’s is poised to capitalize on this rapid shift in mindset and is on track to become the leading online specialty natural products retailer,” said Jeff Bocan, managing director for Beringea. “The company’s extensive product offerings and helpful resources make the switch from conventional products to natural alternatives easy and enjoyable.”

“Abe’s Market stands for much more than just a business….we represent a way of life,” said Richard Demb, co-founder and CEO of Abe’s Market. “By providing a personal connection with the merchant and their products online, we are improving the buying experience and helping consumers enjoy a healthier lifestyle. This new round of funding from leading investors is a testament to the strength of what we have built and the future ahead of us.”

Abe’s Market continues to innovate within the natural living and e-commerce spaces. At the beginning of 2013, the site unveiled a new content model that offers insight from Abe’s merchants, staff, and industry thought-leaders on the news and trends happening in the organic, natural, and green industries. The company has also launched a first of its kind customizable shopping experience to help people filter through and better understand hundreds of various lifestyle and dietary qualities which make up the thousands of products offered on the site.

About Abe’s Market
Abe’s Market is the leading online destination for discovering and experiencing the best organic and natural products available. Founded in 2009 by serial entrepreneur Richard Demb and former Fortune 500 marketing executive Jon Polin, Abe’s Market gives healthy, environmentally conscious, and lifestyle savvy consumers a place to find incredible food, baby, hygiene, home, fashion and pet care items. The site is home to thousands of green-minded vendors, each of whom uses the platform to share the stories behind their products to help better connect with Abe’s customers and stand out to other like-minded vendors. In return, consumers get a better understanding of the health and environmental benefits each product delivers, and vendors have a business network they can tap into for new business and potential partnerships.

Abe’s Market is working to combine the experience of a local, organic market with the convenience of an online superstore. For more information, visit www.abesmarket.com.

About Beringea

Beringea offers advice, guidance and capital to support growing businesses. With offices in the U.S. and UK, Beringea’s award-winning team offers its portfolio companies the resources to develop strategy, evaluate growth opportunities, and build value in a range of sectors, including health care and life sciences, clean technology, advanced manufacturing, media, Internet technologies and specialized consumer products. Beringea is the co-manager of Michigan Growth Capital Partners Funds and the Michigan Growth Capital Partners Mezzanine Fund in the U.S., as well as the ProVen VCT family of funds in the UK, among others. For more information, visit www.beringea.com.

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January 17, 2013 @ 5:48 am

Michigan Accelerator Fund-I Invests $750,000 in Swift Biosciences

Innovative company develops enabling technologies for genomics and personalized medicine

Grand Rapids, Mich., January 15, 2013– Michigan Accelerator Fund I (MAF-1) has made a $750,000 Series A-1 investment in Swift Biosciences, Inc. This is the seventh company MAF-1 has funded since the fund’s inception in 2010, and the first investment since the fund closed at $15.1M in August of 2012.

The investment in Swift Biosciences continues MAF-1’s strategic focus to invest in Michigan-based, early stage, life science technology companies. Located in Ann Arbor, Swift Biosciences is commercializing genetic testing technology to advance the field of genomics and personalized medicine. To date, Swift has launched a product suite referred to as myT® Primers, which enable detection of mutated cells related to melanoma with extreme sensitivity. This opens the door for test specimens to be collected as blood samples instead of tissue, which may allow for earlier detection.  In 2013, Swift will launch a new line of products focused on genome sequencing.

“We are thrilled to be investing in Swift at an extremely timely juncture, as their technology is forecast to hit the market right when the need will be the greatest,” said Dale Grogan, Managing Director, MAF-1. “We look forward to our investment realizing solid returns in two to three years, if not sooner.”

Launched in 2010 with the backing of several Michigan-based individual investors, MAF-1 now joins Houston-based Mercury Fund as Swift’s only institutional investors. The total invested in Swift to date is $6.15M. The latest funding will support product development, patent filing and prosecution, and direct sales and marketing to key laboratory leaders.

David Olson, CEO, Swift Biosciences added, “The inclusion of MAF-1 as a Michigan-based investor is highly encouraging, and provides us with additional financial runway as we launch new products in 2013. They are a welcome addition to the Swift team.”

About MAF-1

The purpose of Michigan Accelerator Fund I is to achieve significant, long-term capital appreciation for its investors through investments in Michigan based, early stage companies predominantly in the healthcare and life science technology sectors. Learn more at www.maf-1.com.

About SWIFT BIOSCIENCES

Swift Biosciences is a small, fast-moving company focused on developing innovative, enabling technologies for genomics and personalized medicine.  Swift’s myT Primer technology was developed to provide both high sensitivity and specificity in mutation detection, making it ideal for cancer research and diagnostic applications.  Multiple Next Generation Sequencing products are staged for commercial launch in 2013. Learn more at www.swiftbiosci.com.

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December 16, 2012 @ 10:06 pm

MEDC Releases Business Valuation Services RFI

“The purpose of this Request for Information (“RFI”) is to request information from interested parties regarding services to conduct business valuations on early stage technology companies. The MEDC is looking to receive information from companies that have expertise in early stage technology company valuation practices, along with valuation methods utilized, and pricing models for providing those services.”

 

Read more about the RFI.

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January 10, 2011 @ 12:19 pm

POLITICO: “Michgan hopes tech will help recovery”

Mich. hopes tech will help recovery
By: Jennifer Martinez
January 6, 2011 04:36 AM EST

http://dyn.politico.com/printstory.cfm?uuid=580D7924-A87A-987A-F380BB469A0AEE3C

Michigan is best known for making cars, but the state’s technology sector is gaining clout thanks, in part, to local and national politics.

Michigan’s own Rep. Fred Upton has become one of the most powerful lawmakers on technology policy. As the new chairman of the influential House Energy and Commerce Committee, Upton plans to kick off his tenure by leading the charge of Republicans seeking to repeal the Federal Communications Commission’s Net neutrality order.

Another Michigan Republican, Rep. Dave Camp, is slated to chair the House Ways and Means Committee, which handles tax issues that affect large high-tech corporations and entrepreneurs. Tax incentives for small-business entrepreneurs and research-and-development tax credits will be among the items under Camp’s purview.

Michigan certainly won’t have the political pull of other tech-focused states such as California. But by attracting investors and entrepreneurs, it is hoping to generate a new tech-focused economy that will help cities like Detroit recover from the collapse of the auto industry.

“The state itself has been very aggressive and understanding of the importance of technology to an economy that needs help,” said Mark Heesen, president of the National Venture Capital Association. “If you look at folks coming into power, … there’s this understanding that technology for the state of Michigan and their districts is an important consideration.”

New state-run initiatives may be on the horizon now that a former tech executive is at the helm. Michigan’s new governor, Rick Snyder, previously served as president and chief operating officer of computer-maker Gateway and went on to start two venture-capital firms in Ann Arbor. He served as an interim CEO at Gateway in 2006.

Venture capitalists are particularly bullish about the growth opportunities for biotech, medical devices, clean tech and battery technologies.

Additionally, the U.S. Patent and Trademark Office plans to build the agency’s first satellite office in Detroit this year, a move intended to help the agency tackle its backlog of more than 700,000 patent applications. The agency said it selected Detroit because of its proximity to major research universities, large community of scientists and engineers and high number of patent agents and attorneys.

Still, Michigan is far from becoming a tech powerhouse like California, said TechAmerica Executive Director Ed Longanecker.

“Silicon Valley is its own unique environment, and other areas aspire to have that same [venture-capital] environment and that same network of companies,” said Longanecker, who runs TechAmerica’s Midwest office. “It’s taken a long, long time to develop, and I don’t think Michigan [is] anything close to becoming Silicon Valley, but I certainly think there are some positive things happening that will help diversify their economy.”

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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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