The Michigan Pre-Seed Capital Fund companies have attracted more than $18 million in matching grant and equity funds.  In 2011, the Michigan Pre-Seed Capital Fund made 12 investments totaling $2.4 million, matched with more than $2 million in investments and grants.  Combined, the Michigan Pre-Seed Fund investments have helped to create more than 100 jobs in Michigan.

“We continue to receive applications from entrepreneurs around the state who are raising their first round of equity funding for their innovative, technology-based businesses,” said Skip Simms, Ann Arbor SPARK’s senior vice president and administrator of the Michigan Pre-Seed Capital Fund.  “This interest in funding is a clear sign that Michigan’s entrepreneurial spirit is strong.”

The Michigan Pre-Seed Capital Fund supports a start-up’s commercialization efforts.  Specific innovations include:

Detroit-based Clean Emission Fluids, Inc. (CEF) manufactures patent pending clean energy technologies (FAST™ stations) that provide onsite fuels and fluids for commercial truck fleets. CEF currently has six stations deployed with six additional stations planned for delivery by the end of 2011.

“The Michigan Pre-Seed Capital Fund’s support and investment in Clean Emission Fluids is an invaluable resource to help advance our leading-edge and patent-pending FAST Truck Stops in a Box that offer on-demand and on-site blending of any fuel in any proportion,” said Oliver F. Baer, CEF president and co-founder.  “FAST stations track the performance of every gallon, proportion and fuel type dispensed – including biofuels and emission fluids – to optimize vehicle operations and lower prices at the pump. Ann Arbor SPARK and the Michigan Pre-Seed Capital Fund has been vital to our developing success and establishing a solid framework on which to build – while helping boost Michigan’s economy in high return, job creating industries.”

Estrakon employees manufacturing their LED product

Estrakon, based in Ann Arbor, is a technology company that designs, develops and manufactures custom innovative, patented LED Edge-Lit signs and displays that provide a new medium for many broad applications such as premium brand advertising and attractive consumer displays that offer significant return on investment.

“The Michigan Pre-Seed Capital Fund was instrumental in allowing our organization to stay on top of the influx of new business that we were experiencing in mid 2011,” said Matt Shumate, Eskatron founder.  “We have added new equipment, more staff and increased our production space to accommodate the rapid growth.

Ix Innovations, based in Ann Arbor, enhances the usability of electrical test and measurement instrumentation through continual product innovation. Ix’s products are used throughout science and engineering, in diverse fields including low power electronics, energy harvesting, and in teaching labs worldwide.

“The Michigan Pre-Seed Capital Fund financing allows Ix Innovations to fill key management positions,” said Ian Dailey, president of Ix Innovations.  “This funding is critical to fueling research activities and enabling us to bring our next-generation low power measurement instruments to market.”

The Michigan Pre-Seed Capital Fund is an equity fund that invests in technology-based companies to support business formation and acceleration.  Ann Arbor SPARK serves as the Fund’s administrator.

To qualify for the Michigan Pre-Seed Capital Fund, start-up companies must be based on a technology in one of the state’s identified competitive technologies and have the sponsorship of a local SmartZone.  In addition to SmartZone sponsorship, companies must have received grant, angel or venture capital funding as a match with the Michigan Pre-Seed Capital Fund investment.

The Michigan Pre-Seed Capital Fund is an equity investment fund that receives the same returns as the third party investor.  The returns that the Michigan Pre-Seed Capital Fund receives from its investments will be redeployed by the Fund as first round capital to Michigan-based start-ups.

Funds for this initiative were provided by the 21st Century Jobs Fund, a Michigan Strategic Fund program designed to accelerate the growth and diversification of Michigan’s economy.  The Michigan Economic Development Corporation (“MEDC”), a public-private partnership between the state and local communities, provides administrative support for the 21st Century Jobs Fund.  The MEDC markets Michigan and provides the tools and environment to drive job creation and investment. For more information on the 21st Century Jobs Fund initiative, visit www.michiganadvantage.org.

“MEDC support for Ann Arbor SPARK’s East incubator extends and enhances opportunities for start-ups throughout the region,” said Paul Krutko, president and CEO, Ann Arbor SPARK. “Business incubators play an important role in our economy: The start-ups that receive assistance through SPARK East attract investment, retain talent and create jobs here in the region. Ann Arbor SPARK business incubators provide the critical support that start-ups need to become drivers of economic success.”

Ann Arbor SPARK was awarded $500,000 for the SPARK East business incubator, located in Ypsilanti, Mich. The funding will enable Ann Arbor SPARK to offer additional business incubator scholarships and business acceleration programming. The funding will also support new services developed specifically for students, including entrepreneur education.

To date, 42 start-ups have been assisted through programs and support offered at the SPARK East business incubator.

Tangent’s history with SPARK dates back to 2009, when they participated in Entrepreneur Boot Camp program. Tangent was named “Best of Boot Camp” the year they participated. Many graduates of Boot Camp take the knowledge they gained and go on to win business plan competitions or secure funding.  In this case, Tangent went on to receive funding through SPARK’s Pre-Seed Capital program in 2010 to help their innovative technology move beyond proof of concept. Funding for this program is provided by the Michigan Strategic Fund and the Michigan Economic Development Corporation, and is focused on moving companies forward to commercialization.

With the support of this 4.5 million venture capital investment, Tangent will be able to once again take the next step forward in growing their business.

Sassa Akervall, COO of Akervall Technologies, and Skip Simms, senior vice president of Ann Arbor SPARK

Akervall Technologies recently repaid its Michigan Microloan Fund Program award, making it the first microloan recipient to repay funding.  The company, whose work on the innovative Protech Dent™ mouth guard was also awarded phase I SBIR funding, repaid its $15,000 microloan in just 15 months, nine months before it was due.

“Akervall Technologies is the perfect example of how the microloan funding is suppose to work,” said Skip Simms, Ann Arbor SPARK senior vice president and administrator of the Michigan Microloan Fund Program.  “Microloan funding helped Akervall jump the chasm between development and commercialization, providing a boost that the company used to market its product and acquire customers.  The Michigan Microloan Fund Program fills a critical funding gap for emerging companies entering the market.”

The Protech Dent is a semi-custom mouth guard made of a non-compressible thermoplastic with precisely positioned perforations that disperse impact forces before they can reach the teeth, using crumple zones to further reduce impact.

“The microloan we received from Ann Arbor SPARK helped us to buy goods for our first inventory of products and to redo our website,” said Sassa Akervall, chief operating officer, Akervall Technologies. “We were also able to bring in consultants to help us with social media marketing and a market analysis, activities that were invaluable in helping us lining up the right avenues for marketing and sales.”

“Akervall Technologies is now in a position of seeing our sales increase by 300 percent this year,” Akervall added.  “We are currently launching a new sales organization for North America and are also seeing an increase in international sales.  All of this activity was initiated with the help of the Michigan Microloan Fund Program award.”

The $15,000 of principal plus interest Akervall Technologies paid will be re-invested in the Michigan Microloan Fund Program.

HookLogic is headquartered in New York. Its office in Ann Arbor is focused on developing software for the company’s SaaS platform. Ann Arbor SPARK assisted HookLogic in finding its Ann Arbor office space. Additionally, HookLogic has taken advantage of Ann Arbor SPARK’s talent services, including the job portal, Hot Shots and networking.

“HookLogic has worked with SPARK since we opened our Ann Arbor office in 2008,” said Gary Evans, HookLogic general manager. “We have attended several networking/recruiting events, and have leveraged their knowledge of the local market in other ways as well, including identifying options for where to locate our new office when we outgrew our existing space.” For more on this exciting news, read HookLogic’s press release.

For more on this exciting news, read HookLogic’s press release.

“Liebherr-Aerospace is able to expand in the Ann Arbor region, in part, because of its access to highly skilled, technical talent,” said Paul Krutko, Ann Arbor SPARK president and CEO.  “The region’s talent base provides a distinct competitive advantage for manufacturers and service providers; Ann Arbor is rich with the ingredients that businesses of all sizes need to grow.  Ann Arbor SPARK is pleased to have worked with Liebherr and the City of Saline in securing economic incentives to support this expansion.”

According to its website, Liebherr is a supplier of technically innovative user-oriented products and services in numerous fields.

Liebherr will start its expansion soon, with completion scheduled for spring 2012.

AnnArbor.com has a great article on the expansion, including additional details on hiring and the company’s operations.

“Companies that received support from the Michigan Pre-Seed Capital Fund are currently employing 285 people throughout the state and have attracted outside investment.  Matching support from other funding sources totaled $16.4 million for these Michigan companies.

A combined $2.5 million in Michigan Pre-Seed Capital Fund investments in 2010 were awarded to:

• Advanced Battery Concepts
• Armune BioScience, Inc.
• Current Motor Company
• Downstream, LLC
• Intervention Insights
• Innovative Surgical Solutions
• InfoReady Corporation
• InPore Technologies
• Inventure Enterprises
• NextCAT, Inc.
• Tangent Medical Technologies

The processes and procedures that investors need to follow to obtain the credit still need to be approved so it will be a month or so before companies and investors can start applying.  SPARK will have programs explaining the criteria and procedures, for companies and investors, in January, as soon as all the details are worked out.  Stay tuned for information about those events.

In a nutshell this credit will give qualified individual investors in qualified companies in 2011 and 2012 a 25% tax credit against their MI tax liability for each dollar (minimum $20,000) invested in a MI early stage company. The credit must be used over at least two years but can be spread over 5 years.  Maximum of $500,000 of investments are eligible for a single investor, but it is cumulative over multiple investments. 

Stay tuned for more.

Preregistration is required.  You can do that hear www.beringea.com/officehours.php

Here is where the Office Hours tour will take place:

•    Farmington Hills – January 11, 2011
•    Midland – January 25, 2011
•    Kalamazoo – February 8, 2011
•    Troy – February 23, 2011
•    Ann Arbor – March 8, 2011
•    Grand Rapids – March 29, 2011
•    Detroit – April 12, 2011
•    Lansing – May 11, 2011
•    Traverse City – July 8, 2011
•    Marquette July 19, 2011
•    Petoskey – August TBD, 2011