| Follow Us:

News

127 Articles | Page: | Show All

How will Toyota's expansions impact the Ann Arbor-area economy?

Roughly 18 months from now, more than 300 Toyota employees will be moving into new digs at the company's Ann Arbor Township and York Township campuses as part of a $126 million investment by the company.

The company is transferring an estimated 330 jobs from California and Kentucky into roughly 440,000 square feet of new space in the Ann Arbor area.

And while a $126 million investment will help the tax bases of the two townships, the addition of 330 employees and their families to the area could have a much bigger impact on the region.

Eighty-five of the relocating workers will move to the Ann Arbor Township facility, and 250 will relocate to the new York Township buildings.

Those new workers will help Washtenaw County recover from an unexpected loss of jobs in the transportation equipment (motor vehicle) manufacturing industry in 2014.

According to the 2015-2017 economic forecast conducted by University of Michigan economists George Fulton and Donald Grimes for The Ann Arbor News, the county lost 16.7 percent of jobs in that sector in 2014, thanks to the closing of a handful of auto parts suppliers.

The forecast called for just 34 jobs to be added to the industry by 2017, but Toyota's plan will increase that number by roughly 10 times the projections.

Before the announcement about the expansions was made last December, Toyota worked with Ann Arbor SPARK to collaborate with the state of Michigan and the townships to help secure incentive programs and tax incentives from the state as part of the investment projects.

Once those incentives were in place, the Japanese automaker announced it was expanding the powertrain operations at the Ann Arbor Township campus and constructing the two new building at the Toyota Technical Center in York Township.
A prototype facility for vehicle development and a supplier center will be built at the Technical Center and was approved earlier in the week by York Township.

The Toyota plans are particularly beneficial to the county because the average wage for people in that industry in 2013 was $65,890, significantly higher than the $51,867 average wage in Washtenaw County.

"There is no question that when jobs come to your community that are not in your community, it's a net gain and these people are coming in at much higher salaries," said Paul Krutko the president of Ann Arbor SPARK.

With more than 300 people coming to the area, the relocations also will likely have an impact on Washtenaw County's already tight real estate market.

According to the Ann Arbor Area Board of Realtors, the average residential sale price in the month of May 2015 was $280,830. For the year, the average sale price for a single-family home is $268,406, meaning the potential economic impact on the real estate market alone in the county could be millions of dollars.

Krutko said he would expect the real estate market will benefit significantly from the relocations, as most employees will be looking for homes in and around Washtenaw County.

SPARK has also sent representatives to California and Kentucky to help Toyota employees who are interested in relocating. SPARK has helped answer questions about the area and assisted in helping people find potential homes and other information to help them make a decision about transferring.

The jobs will also help stimulate the economy as the relocated employees and their families spend money on various lifestyle and entertainment options in the surrounding areas.

A study by the Bay Area Council in December 2012 showed that for every technology job created, four other jobs are created in the goods and services sectors for the region.

Krutko said he didn't want to speculate on a potential economic impact, but said he would expect the jobs to help make a similar impact in the region.

However, Krutko said he does not anticipate the areas immediately surrounding the two campuses to see any significant growth in terms of housing or retail developments.

That's particularly true for the Ann Arbor Township campus as most property in the area is already built up, or under ownership that isn't likely to change the dynamic of the area.

"I can't say it really impacts the development of the tech park, because most of the vacant land is owned by the University of Michigan," said Ann Arbor Township Supervisor Michael Moran about the powertrain expansion.

Moran did say the campus continues to be an anchor in the tech park and he's excited that Toyota is increasing its commitment to the region.

"Toyota's had a presence here for in excess of 30 years. The fact that they're willing to continue the relationship with the township and expand the facility is a vote of confidence in the township and a tax base that benefits from it," Moran said.

This article originally appeared in MLive

Cribspot scores $50K as it adds more U.S. campuses to its off-campus housing service

Cribspot has landed some more seed capital, enabling the Michigan-based startup to start taking its software platform national.

The downtown Ann Arbor-based company (it also has an office in downtown Detroit) recently landed a $50,000 investment from the Michigan Pre-Seed Fund 2.0, a fund capitalized by the Michigan Economic Development Corp to invest in early stage tech startups. That investment brings Cribspots total seed capital raise to $680,000, which includes investments from Ann Arbor-based Huron River Ventures and a number of angel investors.

"It (early stage investments from local funds like the Michigan Pre-Seed Fund 2.0) is extremely important," says Jason Okrasinski, CEO of Cribspot. "The access to state funding, grants, and debt is one big advantage and differentiator from San Francisco."

Cribspot and its team of seven people is creating a centralized online portal for college students looking for off-campus housing. The co-founders, mostly University of Michigan students, were inspired to start the company after struggling with their own searches for off-campus housing that usually entailed Craiglist ads and looking for landlord signs in the sides of buildings.

Cribspot is a product of the Bizdom accelerator program in downtown Detroit. It also won $100,000 when it took second place at last year's Accelerate Michigan Innovation Competition. Shortly after that win Cribspot started to spread its presence across the U.S.

"We currently have a presence at 175 campuses," Okrasinski says.

This article originally appeared in Concentrate Media.

Ann Arbor welcomes Tubingen, Germany, delegates to mark 50 years of friendship

After arriving and spending five days exploring and learning more about Ann Arbor, a delegation from Tübingen, Germany, enjoyed its final day here before flying back across the Atlantic.

The delegates, nearly two dozen altogether, including community and business leaders and others, are in town to commemorate the 50th anniversary of the sister city relationship between Ann Arbor and Tübingen that started in 1965.

A university town claiming the youngest average age of any German city, Tübingen is in many ways similar to Ann Arbor. The two towns have sent delegates to visit and learn from one another on a number of occasions over the years.

Members of the delegation here this week, as well as members of their host families and other guests, met at the Washtenaw Dairy on Tuesday morning for a walking tour of the Old West Side led by local historian Grace Shackman.

Winding up and down streets throughout the historic neighborhood west of downtown, Shackman relayed stories of Ann Arbor's early German settlers in the 1800s, including the houses they built, and the churches and businesses they started. The tour ended at the Kempf House Museum next to Liberty Plaza downtown.

"In 1824, Ann Arbor was founded by people from the East Coast who were already living in America," Shackman said. "But then five years later, in 1829, the Germans started coming. Three families came, and one settled right in Ann Arbor. The other two settled in farms west of town. By three years later, there were 30 German families."

She said more and more Germans followed and most of them had trades they learned in their home country. They applied those skills here as Ann Arbor grew bigger and needed carpenters and masons and shoemakers and the like.

During a five-day exchange program this past week, Tübingen delegates went on a walking tour of the University of Michigan campus and football stadium, were welcomed at a Friday night reception at Washtenaw Community College, took a Saturday morning canoe trip down the Huron River from Argo to Gallup just before it rained, had a cookout at County Farm Park where new artwork by a German artist is on display, and went on a bus tour of Detroit with a stop at the Detroit Institute of Art.

They also met with Mayor Christopher Taylor and City Administrator Steve Powers on Monday morning and went on a bus tour to learn about some of Ann Arbor's city initiatives, followed by a reception dinner hosted by Ann Arbor SPARK.

The delegates were then honored Monday night as the City Council unanimously approved a resolution reaffirming the sister city relationship with Tübingen.

Copies of the resolution are being sent to the mayor and council of Tübingen, the U.S. Department of State, and the Embassy of Germany.

Taylor presented Christine Arbogast, one of Tübingen's three mayors, with an official flag of Ann Arbor and a small friendship bell that includes the city seal.

Members of the Tübingen delegation also presented an anniversary gift to the city this week — an artwork by German artist Ursula Buchegger. A cloud made of colored plastic straws, it will stay hanging between trees at County Farm Park.

The Tübingen delegates also serenaded council members with a German song of friendship at Monday night's meeting.

Arbogast gave thanks to everyone who has made them feel welcome and has made their trip interesting. She said they're looking forward to welcoming Ann Arborites in Tübingen next month as the celebration continues.

A delegation from Ann Arbor is scheduled to visit Tübingen in early July for a week of special events to commemorate the 50th anniversary.

This article originally appeared in MLive

HiveLend wins Ann Arbor SPARK's Best of Boot Camp

HiveLend was awarded Best of Boot Camp at the conclusion of Ann Arbor SPARK’s 26th Entrepreneur Boot Camp. HiveLend was chosen as winner by a panel of investors and industry experts who rated Boot Camp participants’ pitches. Ann Arbor SPARK’s Boot Camp program is funded by the Ann Arbor/Ypsilanti SmartZone (LDFA).

HiveLend is a web-platform enabling communication between farmers and beekeepers through a proprietary, matching algorithm.

“Ann Arbor SPARK’s Entrepreneur Boot Camp Bootcamp was instrumental in HiveLend’s evolution this winter,” said Nicholas Zajciw, HiveLend founder. “The feedback we received throughout Boot Camp was invaluable and helped us to refine HiveLend as a whole. I am especially thankful for the work my drill instructor, Mark Ritz, put into ensuring our success.”

Ann Arbor SPARK’s Boot Camp process quickly and effectively validates and focuses an entrepreneur's business idea. Compared to other entrepreneur education programs that focus on teaching how to write a business plan, Boot Camp gives business founders the tools to decide if their idea is worth executing.

A video highlighting Ann Arbor SPARK’s impact on entrepreneurism in the Ann Arbor region and past winners is available online.

“Entrepreneur Boot Camp is a great example of Ann Arbor SPARK’s work to develop our region’s economy today, and strengthen it for the future,” said Paul Krutko, Ann Arbor SPARK president and CEO. “Today’s start-up companies are the companies that will attract investment and create jobs tomorrow. HiveLend shows how innovation can be born out of any number of market needs, and that Ann Arbor’s entrepreneur ecosystem can nurture a range of tech companies.”

More than 100 entrepreneurs, drill instructors and mentors participated in Ann Arbor SPARK’s 26th Entrepreneur Boot Camp. A biannual program, Boot Camp has assisted more than 500 companies since 2002.

Ann Arbor SPARK will host its next Entrepreneur Boot Camp in the fall of 2015.

Ann Arbor SPARK’s entrepreneurial services, including Boot Camp, are funded by the by the Ann Arbor/Ypsilanti SmartZone (LDFA). The LDFA provides the capital needed to facilitate the development of private, high-tech enterprises and commercialization of research products being developed at the University of Michigan, Eastern Michigan University and within the Ann Arbor/Ypsilanti SmartZone.

More information on SPARK’s entrepreneurial services, funded by LDFA, is available by video.

Michigan Angel Fund closes $2M MAF II

The Michigan Angel Fund (MAF), a professionally managed equity fund focused on capital efficient early stage companies located in Michigan, recently closed its second fund (MAF II) with $2.05 million. MAF II will make its first investment this spring, and plans to make eight to 10 total investments within the next two years.

“There’s no doubt that MAF plays an important role in our entrepreneurial economy. Angel investors are a key element to the success of the diversification and growth of the technology start-up community in Michigan,” said Skip Simms, MAF managing director. “Angel investors provide entrepreneurs the fuel they need to succeed, not just with their investment but with their connections and guidance.” 

With more than 95 members, MAF is the largest angel organization in Michigan. MAF II attracted 26 new members.

There are currently eight companies in the MAF I portfolio: Avegant, Arborlight, BioPhotonics Solutions, Eco-Fueling, Epsilon Imaging, Larky, stkr.it, and Varsity News Network. MAF investments are leveraged with direct investments from its members, and to date the leverage has been 2.6:1 (members:fund).

MAF was established by Ann Arbor SPARK, with administrative support from the Michigan Economic Development Corporation, to help finance early stage companies in Michigan and to attract additional angel investors.

As managing member, Ann Arbor SPARK coordinates screenings of MAF applicants, conducts due diligence, and works with the New Enterprise Forum to prepare companies for their investor presentations. Ann Arbor SPARK also works with business accelerator organizations around the state to identify quality companies for potential MAF investment.

MAF funds companies that are seeking early investments from $250,000 to $2,000,000. Businesses interested in applying for MAF investment can find info about the selection process online.

Support for SPARK helps Ypsilanti entrepreneurs, employers

Ann Arbor SPARK’s hub for entrepreneurial services in Ypsilanti, SPARK East, recently received funding to support its continued work to help businesses start-up and grow. SPARK also received support for expanded collaborative efforts with Eastern Michigan University (EMU) that are centered on entrepreneurial development and talent initiatives that meet the demand from regional employers.

The Michigan Economic Development Corp (MEDC) recently awarded Ann Arbor SPARK $350,000 in funding to support the SPARK East business incubator. The funding, which is being matched by Ann Arbor SPARK’s public-private regional partnership, provides operational support for SPARK East and collaborative efforts with Eastern Michigan University (EMU). 

Washtenaw County, through the Office of Economic and Community Development, is a key member of the partnership and support for SPARK East has been spearheaded by District 6 County Commissioner Ronnie Peterson.

“MEDC’s support helps Ann Arbor SPARK continue SPARK East’s existing activities, which is focused on increasing entrepreneurship in Ypsilanti,” said Ann Arbor SPARK president and CEO Paul Krutko. “The funding will also work to increase Ann Arbor SPARK’s collaboration with EMU on its technology transfer and Center for Digital Engagement activities.”

“There’s no doubt that Ann Arbor SPARK and SPARK East are an important resource in eastern Washtenaw,” said Ronnie Peterson, commissioner, District 6, Washtenaw County Board of Commissioners. “SPARK East helps this community leverage the incredible resource that is Eastern Michigan University, and is a valuable asset in helping Ypsi attract new business to downtown.  I’m very pleased to be a part of sustaining this key community asset.”

Ann Arbor SPARK collaborates with EMU to assist entrepreneurial development, including work with the College of Business, College of Technology, Center for Entrepreneurship, the Art Department, and several student organizations. An example of this partnership includes Ann Arbor SPARK’s work with the College of Business to provide students an opportunity to work with local start-ups.

MEDC’s funding will support a new collaborative effort between Ann Arbor SPARK and EMU’s Center for Digital Engagement. The two-year project will create a repeatable, clinical program in digital sales and marketing operations targeted towards select post-secondary students. Working with regional employers, Ann Arbor SPARK identified that businesses are seeking employees that have these specific skills.

The community partners that will match MEDC’s funding are Eastern Michigan University, the City of Ypsilanti, the Ypsilanti Downtown Development Authority, Ypsilanti Township, and Washtenaw County.

“Ann Arbor SPARK’s work is focused on strengthening the entire region’s economy, and Ypsilanti is a critical part of this region,” Krutko continued. “When we consider the cost of doing business, the facilities and infrastructure that are unique to Ypsilanti, and that the community has very distinct opportunities, Ann Arbor SPARK’s role to encourage jobs and investment becomes apparent.”

Ann Arbor job growth is Gazelle-powered

When you think of the gazelle, images of alert, fleet-footed deer-like creatures darting across the African plain should come to mind. While the term has become one of those business labels that entrepreneurs and investors like to regard as sexy, there is more than a little metaphorical meat to the word. There are, indeed, small high-tech firms that seem preternaturally gifted at zigging and zagging through financially rocky down-turns without missing a stride. They may not always take the path they expected, but they're nimble and smart enough to get where they need to go.

Ann Arbor has a herd of these gazelle-like companies, and they've been picking up speed -- and employees -- with a dexterity that traditional, big-name companies just can't match.

Tracking the herd

Concentrate has been tracking job growth in Washtenaw County since January of 2012. In that time we've been identifying gazelles -small businesses rapidly growing into second-stage firms- in our weekly news stream. More than just hopeful stories of a vibrant new economy ecosystem, these firms have revealed themselves to be one of the primary drivers of local, high-tech job growth. The top 5 fastest-growing, locally based gazelles (all of which happen to call Ann Arbor home) created an average 100 new jobs each, and have the potential to create a lot more very quickly.

So, let's talk about another animal. One less known for its speed and agility, and more for its steadfast ability to tread over the toughest terrain. We're talking about the Llama here, and strange as it may sound, in Ann Arbor the llama is also a gazelle.

LLamasoft  is a downtown Ann Arbor-based firm, which specializes in logistics software. Launched in 2002, it has grown into a $40 million company, landing on Deloitte's Technology Fast 500 Ranking for each of the last three years (2012, 2013 and 2014). The first two of those years it was the only Michigan-based firm. Last year (the most recent year available) it was one of only three firms hailing from the Great Lakes State, securing the 139th spot on the list.

"It's a combination of market traction and market volatility of companies needing to redesign their supply chains,"says Toby Brzoznowski, co-founder and executive vice president of LLamasoft. "We have established ourselves as a global leader in that space.”

Which also means his company is hiring just as fast. LLamasoft currently employs a team of 250 people, bringing 70 on board in 2014 alone. It has created 170 jobs since 2012 and always has about a dozen position openings to fill at any given time. This isn’t just an example of an up-and-coming firm riding current growth trends. The 13-year-old firm has experienced exponential growth for most of its existence.

"We were doubling in size when the market was tanking," Brzoznowski says. "The growth has been there.”

Gazelle job creation

LLamasoft earns its gazelle label honestly. It's a company that is both expanding quickly with innovative new products and has a high ceiling for growth. It is the sort of company that creates excitement in the local economy and good-paying jobs that attract topnotch talent. 

"A big reason you're seeing more gazelle companies is the work that has been done over the last 10 years," says Bill Mayer, vice president of entrepreneurial services for Ann Arbor SPARK. "Our entrepreneurial ecosystem is stronger than it has ever been.”

As a result of Concentrate's interviews with CEOs and other new economy executives, we have been able to establish a robust database of growing companies. Those job-creation numbers represent both hires made over the year before the story was published and how many open positions those companies had at the time of publication. We also tracked how many people the companies employed in total.

During the last 2.5 years, 548 companies created 2,439 jobs, increasing local staff totals from 5,311 employees to a workforce with more than 7,750 full-time equivalents. That adds up to a 46 percent spike. Gazelles represented a significant portion of that job growth. The top 10 fastest growing gazelles (all of which happen to be Ann Arbor-based) accounted for 637 new positions, or 26 percent of the job gains. The combined staffs of the top 10 fastest growing gazelles also represented 14 percent of the total jobs in our data-base.

The pace of that job creation has maintained a steady clip, averaging 68 new jobs each month. The creators of those jobs came from numerous sources. Large companies with satellite offices produced significant gains, such as Systems in Motion (an IT firm based in California), which expanded its Ann Arbor office by 130 people to more than 230 today. But a good portion of the job gains came from incremental hires at small businesses with a handful of employees. These firms may add only one new position at a time but their cumulative impact is significant.

Gazelle job growth represents the most promising trend in talent-based hiring. LLamasoft increased from 80 employees at the end of 2011 to 250 people today. Duo Security, an online security software start-up, has gone from its two co-founders to more than 100 employees and a newly expanded headquarters in five years. Online Tech, a data center firm with aggressive Midwest expansion, has tripled its staff to more than 60 people. Agriculture software start-up FarmLogs has hired dozens of people since it launched in 2012 and is on track to hit 50 employees this year. ForeSee, which provides user-satisfaction surveys online, went from a local staff of 80 to 250 in the four years before its acquisition. 

All of the above-mentioned companies have taken venture capital to grow their businesses. There are currently 129 venture-backed companies in Michigan, up 70 percent over the last five years according to the 2014-15 Michigan Venture Capital Report from the Michigan Venture Capital AssociationThat report also points to at least $300 million that has been invested in Michigan-based start-ups each year since 2012. 

Ann Arbor has long been the center of that venture capital activity in Michigan. Eleven of the 26 VC firms headquartered in Michigan call Ann Arbor home. Nine of the 11 out-of-state venture capital firms with offices in Michigan set them up in Ann Arbor. Each one of those VCs brings millions of dollars in seed capital to the table, much of which has been invested in slow-cooking local start-ups.

"I like to say it begins with patience," Mayer says. "Usually you run 6-12 months with your first customer before it's ready for the larger market. ... The ones that really start to make it build momentum after three to four years.”

Gazelles of a different stripe

Not all gazelles are of the same stripe. While many are based in the tech sector or are nearing their fifth birthday, some are more traditional ventures that have been working on their business models for many years.

Leon Speakers makes home entertainment systems, specifically geared toward the high-end speaker market. The company has been knocking around Ann Arbor for nearly 20 years. It got its start when Noah Kaplan graduated from the University of Michigan and was looking to turn his education at the U-M School of Art & Design into an actual living.

Over the last four years, Kaplan's business has really taken off, spiking its revenue by 300 percent. Leon Speakers also hired a dozen people over the last year, expanding its staff to 50 people. Nevertheless, the company has decided to consolidate its gains as a multimillion-dollar firm, and is aiming for a more conservative 15 percent revenue growth.

"It was a little too fast," Kaplan says. "The scale of what we're doing is much bigger.”

When Leon Speakers first started to grow its biggest challenge was meeting demand. It overcame that challenge by implementing lean manufacturing practices to its factory on the south side of Ann Arbor. Today Kaplan claims his locally produced electronics are cost competitive with imported electronics, and one of his new challenges is finding enough of the right people to make them. 

SPARK's Mayer says Kaplan's concern is not an uncommon refrain among local start-ups. "We're seeing good job growth but the challenge is finding the right workers with the right skill set that are ready to go." 

This article originally appeared in Concentrate Media.

Nonprofit lighting up Ann Arbor entrepreneurs

Bill Mayer has started and sold his own start-ups, been a consultant and managed millions in client assets.

Now, as vice president of entrepreneur services at SPARK, his job is help others do the same.

"We understand the needs of the people sitting in these businesses," Mayer, 45, said of the Ann Arbor-based nonprofit organization. "We help them walk through having an idea for a business to talking about the real steps they are going to take to build a valuable, revenue-positive business."

We sat down with him at the SPARK offices to talk about how the nonprofit helps entrepreneurs create companies and business plans that benefit the Michigan economy.

QUESTION: So how did you end up at SPARK?
ANSWER: I sold off the publicly traded security side of the business I owned in 2007. I had about $200 million under management and I was a registered securities representative. I focused on doing consulting work with the business-owner clients. Some of my colleagues and friends encouraged me to come to SPARK events. I started doing contract work with SPARK. Then, Mike Finney, who is now the CEO of the MEDC, hired me to take over the operations of the incubator and the acceleration services.

Q: Did you have to take a pay cut to do that?
A: Let's just say Mike Finney said to me: "You won't get rich working at SPARK, but you will feel good every day as you come to work to make Ann Arbor a better place." So yeah, if you look at my historical earnings.

Q: What is your best advice for entrepreneurs?
A: For a first-time entrepreneur, it would be to build your network and to surround yourself with really smart people. Really good entrepreneurs are sponges for smart people who give them great advice.

Q: OK. Let's say, I'm just a guy who just got laid off from the line, and I decide I have the next best product, next great idea — and I want to start my own business. How do I build my network and surround myself with smart people?
A: Well, so that's why places like SPARK, TechTown and Automation Alley exist. They tend to be hubs for entrepreneurial activity. If you are an entrepreneur, like entrepreneurship, you are kind-of a tech junkie, you work for a start-up, you just want to see what this entrepreneurship is all about, come to a SPARK event. There are like-minded people here. If we have have 100 people at an event, and you don't walk away with 15 business cards, it's bad on you. We try to make it easy. And in the Midwest, we tend to be a pretty friendly bunch. One person will introduce you to three, each of those people will introduce you to three more.

Q: What's the biggest mistake entrepreneurs make?
A: Falling in love with your product.

Q: What do you mean by that? Don't you want to love your products?
A: You are a guy on the line. You have an idea, you think it's the greatest thing ever. You get laid off from your day job. Now, you're sitting in your basement. What do you do? You build your product first? Or do you go out and talk to 100 potential customers to validate if your product will solve a real pain and people will pay for it? Tinkerers like to be entrepreneurs. Engineers love to be entrepreneurs. But, the core message SPARK likes to deliver is: "Prove to me your value proposition." Don't just invent a new thing.

Q: So it sounds like what you are suggesting is that entrepreneurs aren't really selling products, they're solving problems.
A: You got it. Spot on.

Q: One observation I have is it seems to me that working-class, middle-class, white men are benefiting the most from programs like SPARK, and there's a lot of opportunity to help more women and people from minority communities. What do you think?
A: I appreciate what you are saying. The thing about entrepreneurship that I like to believe, but I don't have any evidence to support this, is you make your own opportunity. Race, ethnicity, gender, it doesn't matter. So is it something about risk tolerance that drives it? It is culturally acceptable for the crazy, mad scientist to be a white male? What is it? We do have really excellent minority entrepreneurs, women entrepreneurs. They do every bit as good a job. But there just aren't as many of them.

This article was originally published in the Detroit Free Press.

10 finalists chosen for Annual Collaboration for Entrepreneurship Challenge

Ten finalists have been chosen for the Annual Collaboration for Entrepreneurship Challenge, now in its 15th year. 
 
Finalists are: 
  • Valerie Obenchain, Advanced Interactive Response Systems LLC of Newaygo, which builds oxygen safety systems for hospitals and residential
  • Kevin Kesseler, AsystBio of East Lansing, a marketing company
  • Andrew Zimmerman, Civionics LLC of Ann Arbor, which provides integrated systems of wireless sensors, cloud-based storage and advanced analytics
  • David Porter, Clavis Sinica LLC of Ann Arbor, a Chinese language learning tool
  • Marshall Khwaja, Exo Dynamics LLC of Ann Arbor, a medical device company that built an active lumbar support brace for use by surgeons in the operating room
  • Nevin Brittain, Health Numeric LLC of East Lansing, a remote patient monitoring service
  • John Lopes, Microcide Inc. of Sterling Heights, a maker of nontoxic antimicrobial products
  • Alex VanDerKolk, Mountain Labs of Ann Arbor, which has developed data collection software for health care research
  • Barak Leibovitz, Seat Side Service LLC of Ann Arbor, an app that lets you order concessions and merchandise from your phone to be delivered to your seat at an event
  • Lauren Shampo, Transcuro LLC, Fenton, a tool designed to streamline hospital discharges by locating providers that fit the patient's follow-up health care needs
Finalists will give three-minute pitches to potential investors during the Jan. 29 networking event at Burton Manor in Livonia. The prize is $5,000. Tickets are $25 online and $40 at the door. Get more information at ACE-event.org. 
 
Last year's winner was Inventev, a company based in the TechTown incubator in Midtown Detroit whose technology allows commercial trucks to generate electricity for equipment at job sites. 
 
Sponsors of the challenge include MiQuest, the Michigan Economic Development Corp.Ann Arbor Spark and Automation Alley.
 
This article was originally published in Crain's Detroit Business.

General Mills former CEO to give $20 million to U-M

Stephen Sanger, the retired chairman and CEO of food giant General Mills, and his wife Karen are making a $20-million gift to the University of Michigan to expand leadership development programs at the Ross School of Business.

Today the university is expected to announce creation of the Sanger Leadership Center, to be headed by Ross associate dean Scott DeRue, with the aim of developing leaders who not only succeed at business but also make a positive impact on the world and their communities.

Sanger, who received his MBA from U-M in 1970, said he was impressed in recent years by development of U-M's Ross Leadership Initiative under DeRue.

"I found over the years that the Michigan MBA brought a certain combination of humility and leadership skill that I thought was unique," Sanger said in a phone interview Wednesday, "and I think the work they're doing ... is very much in line with what employers and their communities need."

U-M's MBA program has long included community service projects such as working with Focus:HOPE in Detroit, but DeRue in recent years has expanded the leadership activities to undergraduate B-school students — and he said the Sangers' gift will enable U-M to involve non-Ross students as well.

Activities under the Sanger Leadership Center umbrella will include annual Impact Challenge and Crisis Challenge projects. Recent Impact Challenge projects have put Ross students together with Detroit high school students to create and run a job fair — and to work with Detroit's TechTown and Ann Arbor SPARK to create a for-profit business to help small and medium-size businesses with technology and social media.

"Many really effective leaders capture attention through storytelling," DeRue said. He has incorporated story labs, asking students before they graduate "to think deeply about what their legacy in the world will be."

Alison Davis-Blake, dean of the Ross school, said the Sangers' gift will help build U-M's stature in leadership development, which she called "one of those burning issues that keeps CEOs up at night."
 
Steve Sanger grew up in Cincinnati and returned there to work at Procter & Gamble for four years after leaving U-M. In 1974, he joined Minneapolis-based General Mills, one of the world's largest food companies with consumer brands that include Cheerios, Yoplait, Pillsbury, Betty Crocker and Green Giant.

He rose to become president in 1993, was chairman and CEO from 1995-2007 and retired as chairman in 2008. On his watch, General Mills was often included on national lists of top places to work and in 2007 was cited by Fortune magazine as "a global top company for leaders," ranking sixth out of 550 global companies.

Karen Sanger was a secondary schoolteacher before becoming an attorney, specializing in small-business law.
The Sangers still live in Minnesota, and while not Michigan natives, they and their children — who did not attend U-M — have been enthusiastic fans of Wolverine sports teams dating back to Steve's days as an Ann Arbor MBA student.

"After Bo's first season," he said, referring to legendary football coach Bo Schembechler, "anyone who attended the 1969 Michigan-Ohio State game dates Michigan football from that point."

He also declared Jim Harbaugh to be "a great hire" as the new football coach and praised interim athletic director Jim Hackett, a 1977 U-M grad and former Steelcase CEO, for ably handling that.

This article originally appeared in the Detroit Free Press.

Michigan eLab invests in biotech startup for cancer research

Michigan eLab LLC, a venture capital firm founded in Ann Arbor last year by three veterans of Silicon Valley, has made its first local investment in Akadeum Life Sciences LLC, a startup that hopes to make it easier, cheaper and faster to prepare tissue, water or food samples for testing.

Michigan eLab invested $150,000 in the seed round of funding in Akadeum, which was founded last March by John Younger, a physician and researcher at the University of Michigan, and Brandon McNaughton, a local tech veteran who has been an entrepreneur in residence with the Detroit Innovate Fund, a lecturer at the Center for Entrepreneurship at UM and a consultant for startup companies in UM's Office of Technology Transfer.

Akadeum is unusual for a new biotech startup in that it already has paying customers, eight so far. The company makes tiny glass beads that are coated with antibodies to quickly gather and concentrate the particular kinds of cells that are being looked for in a culture. 

While traditionally it can take two or three days to grow enough target cells in a culture to make an identification, Akadeum's technology can reduce that time significantly. McNaughton doesn't want to be specific about reductions of time, which will vary with what is being cultured, until more studies are done, but said they will be significant, especially for those trying to identify a particular pathogen. 

Akadeum's first customer was Ebrahim Azizi, M.D., who heads a team at the UM Comprehensive Cancer Center that studies tumor cells circulating in the blood.

To do the studies, Azizi's team must gather what are relatively tiny numbers of cancer cells from millions of other cells in blood samples. "It is a needle-in-the-haystack problem," he said. 

After a meeting with Younger, Azizi said, he ordered some beads and ran a trial in late December. He coated some beads with the specific antibody that would attach to cancer cells, coated some with the wrong antibody and left some uncoated. 

The trial went well, he said. The beads coated with the correct antibodies collected cancer cells quickly and efficiently. The beads were dispersed throughout a sample of blood, then floated to the top, the antibodies that coated them having latched onto the cancer cells he was looking for. 

As the beads floated to the surface, they concentrated the cancer cells into a much smaller volume than when they were evenly dispersed in the blood. "It made it easier to manipulate the cancer cells and take them out," said Azizi. 

He said that it takes five to six hours to gather the cancer cells using the beads, cutting the traditional time about in half, but the real promise is in ease of use and cost. 

He said other methods of separating cancer cells require trained technicians using expensive equipment that often is unavailable because it is being used by other researchers, while Akadeum's process requires no specialized equipment or training. 

Azizi said further tests are needed, and that Akadeum is currently working on making beads more effective for his cancer studies by making them smaller. 

Currently the beads are 15-18 microns in diameter. There are 25,400 microns in an inch. 

"This is a disruptive technology that can move quickly to market," said Doug Neal, one of eLab's general partners. "What I love is they are attacking a problem in the market where there's been no innovation in 30 years. There's been no innovation on the cell preparation side." 

Bill Mayer, vice president of entrepreneurial services at Ann Arbor Spark, says Akadeum is an example of the cooperative nature of the local entrepreneurial community.

The company got a grant from Spark that paid for 80 hours of time from a consultant to provide market research and profile potential end-users. Spark also helped arrange a provisional patent application for Akadeum by Jeffrey Schox, whose Schox Patent Group is a highly regarded Silicon Valley patent firm.

Akadeum is a member of the Great Lakes Stem Cell Innovation Center at Detroit's TechTown, where it makes the tiny glass beads at the heart of its technology.

Akadeum is based in the TechArb in Ann Arbor, a tech incubator that shares space and resources with Menlo Innovations, a highly regarded software design firm.

And NSF International, an Ann Arbor nonprofit that helps develop public health standards to protect food, water and consumer products, has agreed to conduct a pilot study for Akadeum on how its technology can help test for pathogens in food.

"Akadeum has been doing the right thing. It's got solid technology and a strong team. John has a deep background in scientific research, and Brandon has a deep business background, and that's a combination that gets you excited," said Mayer. 

"They're sharp guys who understand what steps they need to take to validate the technology. There's a real market opportunity here. It's a value proposition that is real," he said. 

Mayer said Akadeum has been lining up other funding support, if needed, from Invest Michigan, a Detroit organization affiliated with the MEDC that runs the Michigan Pre-Seed Capital Fund 2.0, and from Detroit-based Invest Detroit, a nonprofit that has two early stage investment funds.

Patti Glaza, an Invest Detroit vice president who is managing director of its Detroit Innovate and First Step funds, said she continues to follow Akadeum's progress for a possible investment. 

"Absolutely. We're staying very close. We're meeting with them once a month," she said. "They're having some pilot tests we'll be looking at. Brandon is extremely smart, and he clearly understands the need for market validation. It's cool technology, but how do you move the technology to a point where it's commercializable?" 

McNaughton said Akadeum is planning to raise a much larger round of funding in the second half of the year. "We're already starting to talk to some people," he said. 

Previously, McNaughton founded Life Magnetics Inc., which in 2011 was briefly the hottest of UM's spinoffs, growing out of a paper he had published about being able to detect single bacterial cells by measuring changes in rotational velocity of tiny beads in a magnetic field. 

The company got some seed funding, but McNaughton and the management team soon realized that they had more of a science experiment than a company, and that the path to market would be too long and costly. 

Michigan eLab was founded in 2012 by four entrepreneurs with longtime ties to Silicon Valley. Three of them also have ties to UM. 

It recently held a first close of more than $20 million of what it hopes to be a $40 million fund to do early-stage investing in tech companies. In January 2013, the firm got a commitment of $2.25 million from the Pure Michigan Venture Development Fund, a $9 million fund overseen by the Michigan Strategic Fund of the Michigan Economic Development Corp.

Neal spent 15 years in Silicon Valley in leadership positions at Hewlett-Packard Co. and Symantec Corp.and then as CEO of Mobile Automation, a software security company for mobile platforms that he co-founded in 2000.

After Mobile Automation was sold to iPass Inc. in 2005 for $20 million, Neal returned to Michigan to raise his family. Since then, he has been on the review board of the Michigan Pre-Seed Capital Fund; helped found TechArb, an incubator in downtown Ann Arbor that houses student-run startups; and, from 2009 until June 2013, was managing director of the Center for Entrepreneurship at UM.

The three other eLab founders, who are also general partners, are:
  • Rick Bolander, who has a master's degree in electrical engineering from UM and an MBA from the Harvard Business School and in 1999 co-founded San Mateo, Calif.-based Gabriel Venture Partners, an early-stage VC firm that invests in clean tech and information technology.
  • Scott Chou, a venture capitalist since 1997 who specializes in tech spinoffs from universities and government labs and who is also a managing director at Gabriel Venture Partners. 
  • Bob Stefanski, a UM engineering and law school grad who is a partner in the Silicon Valley law firm ofReed Smith LLP. He has been involved with UM's Center for Entrepreneurship since its founding in 2007 and has been an adviser and mentor at TechArb.
This article originally appeared in Crain's Detroit Business

Ann Arbor-based startups all but sweep Accelerate Michigan

Ann Arbor-based startups all but swept the awards at the Accelerate Michigan Innovation Competition last week, taking home a combined $740,000 in seed capital.

Startups from Tree Town took the top two spots, and won six out of the nine sub categories. A startup led by University of Michigan students also took second place in Accelerate Michigan's student portion of the competition.

The big winner was SkySpecs, a startup developing drone technology, taking home the $500,000 first place prize. Getting here has been a long road for Ann Arbor-based company, originally placing in the student portion of the competition in 2012.

"This was our third year doing it," says Danny Ellis, CEO of SkySpecs. "It was a really, really good competition. I was impressed with so many of the competitors."

Cribspot, which calls Kerrytown home and has an office in downtown Detroit, took second place in the overall competition. That showing earned it $100,000 in seed capital, which company plans to use to adds staff to help further develop and expand its online-student-housing platform.

The following Ann Arbor-based companies took home category awards:

Ornicept won the IT prize (worth $25,000) for its software platform that helps field workers collect and manage data.
Solartonic won the Alternative Energy prize ($25,000) for its flexible solar panel technology, solarap, that attaches to non-traditional surfaces, such as wrapping around the pole of a street lamp.
Akervall Technologies won the Advanced Materials prize ($25,000) for its thin-yet-tough mouthguard made of non-compressible, perforated materials.
Freestride Therapeutics won the Life Science prize ($25,000) for its drug that relieves and even prevents shin pain for racing horses.
AlertWatch won the Advanced Transportation prize ($25,000) for its patient-monitoring technology.
TurtleCell won the People's Choice award ($10,000) for the second year in a row for its Phone case that comes with retractable earbuds.

HeelSecret took second place in Accelerate Michigan's student competition ($5,000) for its shoe attachment that helps better connect high heels to the people wearing them. The startup is led by University of Michigan students.

This article by Jon Zemke originally published in Concentrate.

Ornicept graduates from SPARK Central

Ornicept recently graduated from the Ann Arbor SPARK Central business incubator, where it has been a tenant since its inception, to new offices. The company’s new offices on North Main Street in Ann Arbor will provide Ornicept the room to continue to grow as it acquires more enterprise clients.
 
Ornicept is the leader in fieldwork data management. Its product, SPECTEO, is an all-in-one, high-tech solution for any kind of fieldwork data. Its new office is 2500 square feet and offers the company staging for significant growth, including expansion at a later date should it require additional space.
 
“Moving from the SPARK Central incubator is truly symbolic of Ornicept’s leap from startup to established business,” said Russell Conard, Ornicept founder and CEO. “To meet what’s next for Ornicept – more enterprise clients - we need room to grow.”
 
Founded in 2011, Ornicept has grown to a 13-person company. In the next six months, it will hire experienced software engineers, as well as technical and sales talent. Specifically, the company is looking for those who can manage data processing and software developers who can interface with clients.
 
Ornicept has raised investment from industry leaders around the United States and is in the process of raising additional funds to continue its innovation leadership.
 
In addition to space at the SPARK Central incubator, Ann Arbor SPARK has supported Ornicept through business accelerator grants and a microloan that helped with product commercialization. Ann Arbor SPARK also provided the company with human resources consulting and internship support.
 

Thomson Reuters invests and expands in Washtenaw County

The Michigan Economic Development Corporation recently approved a $2.4 million Michigan Business Development Program performance-based grant to support Thomson Reuters’ expansion in the Ann Arbor area.

The Tax & Accounting business of Thomson Reuters has approximately 1,100 employees in the Ann Arbor area and is growing. As part of the project, Thomson Reuters will make a qualified capital investment of $19.9 million and add at least 300 jobs locally over the next five years.

Thomson Reuters provides technology and information services to the financial, legal, tax and accounting, and intellectual property and science markets. It also includes the Reuters news organization.

The vast majority of local employees work in the company’s Tax & Accounting business — in a unit that provides accounting, tax, and practice management software and technology infrastructure to the accounting profession in the U.S. and Canada.

“We have an exceptional workforce and deep roots in the community, so we’re pleased and proud to continue growing in the Ann Arbor area,” said Jon Baron, managing director of the company’s Professional segment, which is based in Dexter. “The economic development support from the state is an important factor in our decision.”

Ann Arbor SPARK provided assistance to the company in securing incentives from MEDC and working with Pittsfield Charter Township, which will consider supporting the project in the form of property tax abatement.

"Thomson Reuters is a global brand that has thrived in the Ann Arbor region over a period of sustained, long-term growth," said Paul Krutko, president and CEO of Ann Arbor SPARK. "The company chose to expand here not only because of our workforce, but also because the local community and state continue to be active partners in offering support. Having a company like Thomson Reuters in the Ann Arbor region is important: As a leading employer, it is a highly visible success story that attracts the attention and interest of innovative companies and IT professionals."

Mandy Grewal, supervisor, Pittsfield Charter Township, said, "Pittsfield Township has worked very hard in the past few years to establish a strong sense of community that extends to our business sector. Thomson Reuters brings with it a strong job base that will provide positive ripple effects to our residential, retail and entertainment sectors in the region."

'U' interacts with Ann Arbor startup community

Michigan has been called the Silicon Mitten — and an integral thread of that glove’s stitching is Ann Arbor.
 
Student organizations tout entrepreneurial spirit abound — namely MPowered, optiMize and MHacks — and administrative facilities and programs, like the Center for Entrepreneurship and Innovate Blue, foster startup ideas and passion, providing resources that turn those concepts into realities.

Even outside the University, startup enthusiasm is everywhere. Incubators and consulting firms like TechArb, Ann Arbor SPARK and Menlo Innovations are in high demand — the former two even partner with the students through Innovate Blue.

Further, the introduction of the Desai Family Accelerator in August marked a strengthened effort to cater these valuable services to parties outside the University, expanding both entrepreneurial drive and the University’s influence beyond Washtenaw County.

Tom Frank, the executive director of the Center for Entrepreneurship, wrote in an e-mail that Center’s growth in the last six years reflects the growing culture of entrepreneurship in Ann Arbor.

He wrote that its location in the Duderstadt Center is twice as big as its original location, and added that these offices are “rapidly” reaching capacity.

“We are always looking for more spaces we can use to facilitate student entrepreneurial activity,” Frank wrote.
In the past three years, he said the Center for Entrepreneurship has had over 6,800 undergraduates enroll in its entrepreneurship program. In the same time, more than 140 “business concepts” have been identified — and more than 20 of these each year work with TechArb to further develop their ideas.

As far as continuing to expand, Frank wrote that the Center has been working with places like Ann Arbor SPARK to provide students with more space to learn and explore.

University alum Bill Mayer, SPARK’s vice president of entrepreneur services, said Ann Arbor’s demographics are conducive to the recent boom of innovation.

“I really enjoy the fact that not only is Ann Arbor a well-educated city, but it’s a nice-sized town,” Mayer said.
He added that many companies headquartered in states more well-known for entrepreneurship, like California, plan to open offices in Ann Arbor to continue development.

“It’s just the right size pool that, as a startup, you’re not one of 10,000,” Mayer said. “You’re one of 1,000. And you can actually connect with resources … there’s all these elements available. You get to know everyone. It’s just a more manageable, smaller community.”

The reach of this movement, Mayer said, goes beyond the University, though its strong ties to the city are undeniable. He said 35 percent of the groups SPARK works with are student companies. The rest are local entrepreneurs.

A2B Bikeshare, a company co-founded by University alums Ansgar Strother and Keith Porter, is one of those success stories. An entrepreneurship class at the University sparked their desire to create cheaper bike-sharing systems, CEO Strother said.

Their program was adopted in Lansing in September 2013, becoming the first modern bike share system in the state of Michigan. Now, it’s set to roll out in Fairbanks, Alaska.

While he was still a student, Strother said the startup worked with TechArb in the development phase, in addition to the Center for Entrepreneurship. Since graduating, A2B has also worked with SPARK as it grows into what Strother calls a “real company, not just a University enterprise.”

Another Ann Arbor venture is TurtleCell, an iPhone case that comes with retractable headphones to prevent tangling. The company is mass-producing the case, and it hopes to sell 130,000 by winter.

The company was founded by University alumni Paul Schrems and Nick Turnbull and Michigan State University alum Jeremy Lindlbauer. As students, they joined TechArb, and later moved on to Ann Arbor SPARK’s incubator space.

Lindlbauer said SPARK was vital in providing the financial help to grow their business in their growth stage. Through SPARK’s business accelerator grant, TurtleCell received $50,000. The company used this money to conduct design testing, undergo product verification, buy equipment and even make an e-commerce website.

“We originally thought that we were going to do it all ourselves,” Schrems said. “We were engineers. We didn’t really know how to sell hundreds of thousands of products, and the distribution deal really allowed us to do that.”

As companies continue to grow in Ann Arbor, the excitement is propagating. The University is sending students on entrepreneurial “treks” to experience other hubs of innovation and spread the wealth of ideas.

Through a program called MEngage, the Center for Entrepreneurship has sent students to visit companies in the San Francisco area, where they tour companies like Yahoo! and Google, talk to executives and even pitch business ideas in front of local entrepreneurs and University alumni.

This year, the Center has created a similar, more localized trip to Grand Rapids. In addition, it is in the process of formalizing a “D Trek,” or an organized entrepreneurship connection event in Detroit, which will likely happen in summer 2015.

While the Center for Entrepreneurship is sending students to discover the realm of entrepreneurship outside Ann Arbor, other outside groups are targeting University students in their search for capable employees.

Another is the story of Tivvi, a mobile application that serves as a collaborative media platform for users to easily share photo and video content. The app aggregates that content with “tiles” (i.e. the “foodie tile”) and subsequently allows users to scroll through hundreds of submissions with the same label.

The startup was co-founded by two Wayne State University students, Ishpinder Sahni and Martin Hermez.
Hermez, now a junior, said he was exposed to the University as a high school student — his sister went to Michigan.

“I sat in on lots of lectures, I talked to a lot of professors … and I just knew that was kind of the hub for engineers,” Hermez said.

Each of the application’s four developers is or was a University student. Alumni include Gurminder Randhawa and Jackson Jessup; current students include Engineering senior Roy Chou and Engineering junior Jesus Morales.

“When I started this project, I thought, ‘Hey, I need motivated programmers.’ The best place to go was Ann Arbor.”

This article originally appeared on MichiganDaily.com. 
127 Articles | Page: | Show All
Share this page
0
Email
Print