Investment : Innovation & Job News

Schechter Wealth Strategies opened an office in New York City late last year as the Birmingham-based firm looked to capitalize on a growing economy.

The new office in Midtown Manhattan is the second satellite office for the 74 year-old wealth management firm, which also has an office in the Flint area. Schechter Wealth Strategies has notched close to 30-percent growth in the last two years. It has a goal of 15-percent growth this year and 65-percent growth by 2015.

"We felt that now is the right time with the economy on the upswing," says Stephen Blocki, COO of Schechter Wealth Strategies.

The New York City office is staffed by one person, who is one of the company's five new hires over the last year. Blocki was recently brought on as the company's new COO and Jimmy King (of the University of Michigan's Fab Five fame) as the new vice president of business development. The firm now employs 30 people.

Robert Langer is the managing director of Schechter Wealth Strategies' New York Office. Blocki says the firm decided to make the investment in a New York office as a way to replicate the firm's business model in new territory.

"Our goal is to grow into any market that has access to a network of high-net-worth individuals," Blocki says.

Source: Stephen Blocki, COO of Schechter Wealth Strategies
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

The Automation Alley Seed Fund has struck again, investing $150,000 into TerraYebo.

This is the Troy-based business accelerator's second six-figure investment in the micro-funding website start-up. It invested $100,000 in the Madison Heights-based firm earlier this year.

"Our investment committee liked their entrepreneurial team," says Thomas Anderson, senior director for Automation Alley. "We thought they were smart and focused."

TerraYebo is the company behind MyInchofTheEarth.com, a micro-funding platform for nonprofits. The website enables users to claim any virtual inch of the earth or ocean, share why that place is important, and choose a nonprofit that either supports the preservation of that place or a nonprofit that does good in the world. The idea is to let people's life experiences at different institutions (such as their alma mater) or places (a national park) prompt them to give small amounts to non-profits that fund them.

The 3-year-old company has signed up a number of name-brand institutions for MyInchofTheEarth.com, including The National Park Foundation, CURE International, VH1 Save the Music, Veterans of Foreign War Foundation and The Pink Fund. TerraYebo's team of four people, it has hired two people so far this year, plans to use the new seed capital to continue the build out of its website and developing its market.

"We want to continue to focus on the user experience of our website," says Dan Glisky, president of TerraYebo. "That is first and foremost."

The Automation Alley Seed Fund invests in early-stage start-ups with high growth ceilings. Investments range from $50,000 to $300,000. The fund is similar to the Michigan Pre-Seed Capital Fund, which is managed by Ann Arbor SPARK.

The Automation Alley Seed Fund got its start in 2004 and has received $6 million in funding, primarily from the state of Michigan. It has invested $8 million over that time, including a couple of start-ups that have either repaid the loans, cashed out the equity in the investment or have been acquired. One start-up, University of Michigan spin-out CieloMed Solutions, was acquired last year and provided a healthy return to the Automation Alley Seed Fund.

Source: Thomas Anderson, senior director for Automation Alley; Dan Glisky, president of TerraYebo and Michele Favoretto, CEO of TerraYebo
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

When Swaminathan Ramesh sees people throwing away plastic he sees waste of a different kind. Wasted energy and resources. It's a big reason he started EcoFuel Technologies last year.

"I wanted to do something with waste plastics because I see them everywhere," Ramesh says. "And I have a background in the polymer chemistry."

The Troy-based start-up is working on technology that turns garbage plastic into diesel fuel. It currently has a prototype that can handle 100 pounds of plastic, turning every 10 pounds of plastic into one gallon of diesel fuel. Ramesh claims that his company's technology produces three times more energy than its competitors.

"We are unique because we can actually make money," Ramesh says.

EcoFuel Technologies and its team of five people recently landed five figures' worth of financing from the Michigan Microloan Fund Program to help push forward the development of its prototype. The company hopes to land $500,000 in seed capital this year to build a machine that can handle 2,000 pounds of plastic a day and then $1.5 million in a second round of seed capital to build a machine that handles 10,000 pounds of plastic each day.

"They (investors) want to see us perform the same way at a larger scale," Ramesh says.

Source: Swaminathan Ramesh, founder & president of EcoFuel Technologies
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Three Metro Detroit firms have landed a couple of pieces in the latest round of financing disbursed by the Michigan Microloan Fund Program.

Ann Arbor SPARK manages the Michigan Microloan Fund Program, which makes loans in the low five figures (organizers often decline to specify the size of each loan) to young start-ups looking for seed capital that are based in Michigan. That money is often used for things like prototype development or marketing. Eligible firms are often so new they are unlikely candidates for bank loans or angel investment or even steady revenues.

"These funds are reserved for pre-seed organizations," says Joe Licavoli, manager of capital programs for Ann Arbor SPARK.

The Michigan Microloan Fund Program recently made nine microloans worth $397,000. Most of those loans went to Ann Arbor-based firms because the program also has sub categories that are funded by the city of Ann Arbor and Washtenaw County to invest in local firms in their municipalities. The three Metro Detroit start-ups to receive microloans include:

- Berylline, a Rochester Hills-based company, that is commercializing a specialized, three-wheeled hybrid scooter

- ENT Biotech Solutions, based in Grosse Pointe, is developing a handheld device used to simultaneously clean cut, cauterize and remove larger adenoid tissue portions

- EcoFuel Technologies, of Troy, which is working on technology that turns garbage plastic into diesel fuel

"We'll need a lot more money but (the microloan) did give us some help," says Swaminathan Ramesh, founder & president of EcoFuel Technologies.

Source: Joe Licavoli, manager of capital programs for Ann Arbor SPARK and Swaminathan Ramesh, founder & president of EcoFuel Technologies
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Buz.fm has landed a $100,000 investment from the Automation Alley Pre-Seed Fund, the first investment in a Series A round the company hopes will total between $1 million and $5 million.

The Orion Township-based tech start-up specializes in developing social media, digital marketing and advertising technologies. The 1-year-old firm provides Internet-based services and products in the advertising and promotion sectors. Its cloud-based applications deliver thousands of digital marketing and advertising campaigns to customers in a variety of industries including restaurants, resorts, hotels, auto dealerships and the entertainment industry, among others.

Buz.fm employs 14 people and is interviewing interns for this summer. It currently has five positions open for software developers (two) and marketing technologists (three).

"We have grown a lot," says Stephen Sadler, CEO & president of Buz.fm. "It happened faster than we thought. I have never seen something grow this quickly."

Buz.fm spun out of Scate Technologies, a software development company, two years ago in September. Sadler hopes to continue the company's current growth streak and lock down its Series A funding round within the next 6-8 weeks.

"The sky is the limit, really," Sadler says.

Source: Stephen Sadler, CEO & president of Buz.fm
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Farmington Hills-based Beringea and Credit Suisse will co-manage the newly launched Michigan Growth Capital Partners II, a venture capital fund focused on investing in promising new economy firms based in Michigan.

The $180 million fund will be deployed over the next 4-5 years, investing in companies in the following sectors: advanced materials and manufacturing, health care and life sciences, media and communications, specialized consumer goods, homeland security, IT and clean technology.

"We have always been a bit ahead on clean tech," says Charlie Rothstein, founder & senior managing director of Farmington Hills-based Beringea.

The Michigan Growth Capital Partners II fund, which was capitalized by the Michigan Strategic Fund, follows the original Michigan Growth Capital Partners fund launched in 2008. That fund made 28 investments, including some sizeable investments in a number of locally based companies, such as Livio Radio and ReCellullar. Its biggest exit has been from Accuri Cytometers, an Ann Arbor-based start-up that was recently acquired for nearly $300 million.

Source: Charlie Rothstein, founder & senior managing director of Farmington Hills-based Beringea
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

There is another lending option for growing small businesses in Michigan with the launch of the Grow Michigan fund.

Grow Michigan is a $60 million fund that was capitalized by the Michigan Strategic Fund and a number of Michigan's banks, including Fifth Third Bank, PNC, Huntington, The Private Bank, Crestmark Bank, Seaway Community Bank, The Bank of Holland, The Bank of Northern Michigan, and Mercantile Bank.

"When we're done we will have about $50 million in private investment," says Russell Youngdahl, Jr., CEO of Grow Michigan, which is based in Plymouth.

Grow Michigan will provide strategic management advice and risk capital in the form of subordinated/mezzanine debt to established, Michigan-based small businesses. Grow Michigan mezzanine loans, made in conjunction with senior loans, will be in the $0.5-$3.0 million range in the form of 3-5 year subordinated debt, and carry a single digit coupon. The idea is to accelerate the growth of small businesses in the Great Lakes State by making more affordable lending options available to them.

"We want to touch as many small businesses as possible," Youngdahl Jr. says. "We want to touch as many people in the banking industry as possible.

Source: Russell Youngdahl, Jr., CEO of Grow Michigan
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Accel Partners, a Silicon Valley-based venture capital firm, is investing $30 million into manufacturing software maker Plex Systems.

The Troy-based firm was acquired by Francisco Partners, also of Silicon Valley, last summer. Plex Systems plans to use the new investment capital to create more product features for its software, improve customer service and expand its sales capabilities.

"You name it, we have initiatives," says Mark Symonds, CEO of Plex Systems. "Growing at this rate things break and you rethink things from time to time."

The 17-year-old company creates Cloud ERP software Plex Online, which helps industrial companies improve and streamline the manufacturing process from product quality management to supply chain management. Plex Systems employs 280 people after hiring 90 in 2012. Symonds expects to keep growing at that rate for the next year.

"Manufacturing is one of the largest markets in the U.S.," Symonds says.

Source: Mark Symonds, CEO of Plex Systems
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Algal Scientific recently walked away with not only the top prize at this year's Accelerate Michigan Innovation Competition but also $1 million in seed capital to commercialize the start-up's green-tech innovations.

The Plymouth-based company spent its first three years developing a wastewater treatment system that uses algae to remove nutrients from contaminated water. What's left over is the raw materials for biofuel production. That technology won the $500,000 grand prize at Accelerate Michigan but also helped the company lock down a $1 million Series A round, which include contributions from the Michigan Economic Development Corp, angel investors and Envy Capital in Farmington Hills.

"There are a lot of different things on our to-do list and that commitment will help," says Paul Horst, CEO of Algal Scientific.

Among those things are paying for animal testing the technology and hiring more staff. Algal Scientific has hired five people over the last year and now employs 10 staff. Horst expects that number to grow as the firm begins commercial sales in 2013.

"We hope to scale up our production to 100 tons per year capacity," Horst says. "We are currently in a pilot project."

Algal Scientific currently calls the Michigan Life Science & Innovation Center home, but plans to look for a new building to accommodate its projected growth next year. "Most likely very close to where we are right now," Horst says.

Source: Paul Horst, CEO of Algal Scientific
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Metro Detroit start-ups ran away with the top prizes in this year's Accelerate Michigan Innovation Competition earlier this month.

Plymouth-based Algal Scientific took home the grand prize of $500,000 in seed capital for its wastewater treatment system technology that uses algae to remove nutrients from contaminated water, leaving the raw materials for biofuel production. Livonia-based nanoMAG took home the $100,000 runner-up prize for its work developing a new type of Magnesium compound that can be used for biocompatible stents and implants.

Six people and an intern are now employed at nanoMAG, which moved from Ann Arbor to Livonia about a year ago to take advantage of a manufacturing facility. It expects to hire a few more people next year as it continues development of its technology. Steven LeBeau, president of nanoMAG, plans to use the cash and the win to leverage an even bigger seed capital round next year.

"We're using the contest as a PR tool to get in touch with people we have been in contact with over the last year for fundraising," LeBeau says. "We're hoping to leverage the $100,000 into seven figures."

Other Metro Detroit winners include:

- InfiChem Polymers, which won the $25,000 prize in the the Advanced Materials category.  The Sterling Heights-based start-up reuses a main chemical in polyurethane foam as a basic building block to manufacture new polyurethane foam. The old polyurethane foam comes from post-industrial scrap that is normally landfilled.
- BioSavita, which won the $25,000 price in the Life Sciences category. The Plymouth-based start-up is developing biotechnology focused on accelerating therapeutic antibody development.
- Coliant, which won the $25,000 prize in the Next Generation Manufacturing category. The Warren-based start-up's Powerlet brand is an electrical accessory in the powersport industry that allows users of things like motorcycles and ATVs to plug their gadgets into the vehicle.

Source: Accelerate Michigan Innovation Competition and Steven LeBeau, president of nanoMAG
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Beringea is adding to both its company portfolio and staff, taking advantage of the Michigan Venture Fellowship Program to grow its office of 25 people.

"We needed more hands on the oars," says Charlie Rothstein, founder & senior managing director of Beringea. "(Our Michigan Venture Fellows Program fellow) brings experience and great analytical ability to the team. It's a reflection that we are a growing business and we wanted to add to our team here in Michigan."

Beringea is Michigan's largest venture capital firm. It's based in Farmington Hills but also has an office in London. It make late-stage investments and has a portfolio of about 60 companies. There are a number of Michigan-based firms in that mix, including Ann Arbor-based Molecular Imaging Research and Mophie, a smartphone accessory maker that is hitting its stride.

"It will do $115 million in sales volume this year," Rothstein says. "It's doing fantastically well."

The Michigan Venture Fellowship Program is a new talent-placement initiative headed up by the Michigan Venture Capital Association. This is its first year, placing four individuals looking to break into the venture capital investment sector with prominent local VCs, like Beringea and Detroit Venture Partners.

"It's a great model that others can follow," Rothstein says. "We are using it to tap into the talent we have here in Michigan."

Source: Charlie Rothstein, founder & senior managing director of Beingea
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

ProNAi continues to raise millions of dollars for its research in Plymouth. The 8-year-old start-up brought in $2 million this year and has raised $20 million in total from the likes of the Apjohn Ventures Fund and the Grand Angels.

Those funds have allowed the company to expand to eight employees and the occasional intern after hiring five people in the last year. The life sciences firm is developing a cancer-fighting drug. It recently finished its initial human clinical trial and has to conduct two more clinical trails before it can be approved by the Food & Drug Administration.

"The drug targets cancer cells and is designed to kill cancer cells," says Mina Sooch, CEO of ProNAi. "Simply put, it doesn't kill normal cells. We had little-to-no side effects in the study that we just conducted."

Sooch expects the next clinical trails to take at least four years. Commercialization could come within five years. In the meantime, Sooch and her team continue to raise more money to push the development of the drug forward.

Source: Mina Sooch, CEO of ProNAi
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Level One Bank is becoming one of the largest banks in Oakland County now that it has acquired Oxford Bank, putting it just behind the likes of Flagstar Bank, Talmer Bank & Trust and Sterling Bank & Trust.

Level One Bank now has combined assets of approximately $750 million and 15 bank branches. It opened a new branch in Bloomfield Township earlier this year and has hired 30 people before the acquisition. The newer, bigger Level One Bank now employs 195 people. The Farmington Hills-based bank now has branches in both southern and northern Oakland County after the acquisition.

"Oakland County is the eighth wealthiest county with more than 1 million people," says Dave Walker, executive vice president & CFO of Level One Bank. "Most of the rest of those counties are on the coasts."

Level One Bank is also moving into a new office in Farmington Hills overlooking I-696. The new space clocks in at 65,000 square feet of space, which nearly triple the size of it current offices. Walker expects to occupy about half of that space right away and use the rest of it to accommodate growth in the next few years.

Source: Dave Walker, executive vice president & CFO of Level One Bank
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

One of the things Accelerate Michigan Innovation Competition excels at is bringing together a broad variety of entrepreneurial players with ties to the Great Lakes State. This makes for some invaluable business connections.

The third annual business plan competition kicked off in the Guardian Building lobby Tuesday evening. The lobby, provided by Bank of America, which has a branch in the ornate hall, provided the right space for investors, entrepreneurs and local shot callers to mix freely. Small enough to be intimate for a crowd of about a 100 people but it's soaring ceiling giving an air of roominess.

This reporter never felt crowded but couldn't stop long enough to send a text message to his wife or an email to his editor without someone tugging at his elbow to say, 'Hello.' In that time, I ran into some of the most successful angel investors in the state as well as aspiring entrepreneurs, like one who is currently trying to launch a start-up while attending medical school at Wayne State University. All of these people mingled both casually and comfortably.

There weren't hard pitches or tables with literature. Those come later during the official part of the competition on Wednesday and today at the Westin-Book Cadillac Hotel. But for the first night, many of the people who are actively building Michigan's new economy came out of the silos of their sectors and made connections with others interested in helping them build a company.

Accelerate Michigan got its start in Ann Arbor as a way to showcase the cream of the crop of Michigan's entrepreneurial ecosystem and connect them with both local and out-of-state resources and investors. This year it moved to downtown Detroit to show off the Motor City's emerging tech hub and vibrant downtown. That shined through Tuesday evening where attendees walked past office buildings lit up with young people working for the likes of Quicken Loans, GalaxE.Solutions, Compuware and Strategic Staffing Solutions.

Accelerate Michigan offers $1 million in prizes to start-ups based in or looking to move to Michigan. This year the top three finishers will take home $500,000, $100,000 and $50,000. For information, click here.

Source: Accelerate Michigan Innovation Competition
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

The people behind Mission Throttle, a social entrepreneurship company based in Southfield, are leading a team to launch a new Metro Detroit-based investment fund that would help business looking to improve both their communities and bottom lines.

Details are still be worked out about the new fund, which does not even have a name, but organizers are optimistic that it will be able to start providing seed capital to social entrepreneurs in the region sometime next year.

"We want to create a third option where there are organization that deliver a social impact and a return but it might not be an investment-grade opportunity," says Jamie Shea, director of strategy development for Mission Throttle.

The fund could be as big as $5 million to $10 million and will be open to social entrepreneurs of all shapes, sizes and markets. The fund's organizers are also hoping that the fund will serve as a way to connect people of means with the people who need those resources to build their businesses.

"We want it to be a very collaborative process," Shea says. "We want to act as the facilitator bringing opportunities to investors."

Source: Jamie Shea, director of strategy development for Mission Throttle
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.