The Michigan Pre-Seed Capital Fund has made three more investments bringing the total number of investments to 22.  The three lastest investments were companies in Lansing, Kalamazoo and Ann Arbor. Two were life science companies and the third in homeland security and defense sector.

Read the full press release at http://www.annarborspark.org/business-resources/news-of-note/Index.cfm?i=2398

Michigan Pre-Seed Capital Fund Invests In 3 More Michigan Start-Ups
List of lates investments and all other investments to date

Richard Bruder of Enterprise Law Partners recently attended the Angel Capital Assoc. Midwest conference and came back with some interesting observations.  You can read his newsletter containing the five most important take-aways at http://www.elp-law.com/newsletters.php

If you are trying to raise money from angels Richard makes some very valuable points about your audience and where they are coming from.  Knowing your audience is one of the most important things you can do when making a sale and you are definitely selling when you are raising money.

Michigan Pre-Seed Capital Fund Invests In 3 More Michigan Start-Ups
List of lates investments and all other investments to date

New Enterprise Newsletter

There was not a slow down in deal flow for the Michigan Pre-Seed Capital Fund during the summer and it continues through the fall.

Since our last post we have made investments in these companies…

Phrixus Pharmaceuticals – Ann Arbor
Avidimer Therapeutics – Ann Arbor
Compendia Bioscience – Ann Arbor
Accord Biomaterial – Ann Arbor
Hybra-Drive Systems – Deerfield
RazorThreat – Royal Oak
Functional Brands – Detroit
Saleztrack – Troy
VENOMIX – Kalamazoo
XG Sciences – East Lansing

The total amount invested in these companies by the fund was more than $2 million.  Their cash matches exceeded $3.8 million.

We are very pleased with the industry and geographic diversity of these investments.

Several more applications are being reviewed and others are in the near term pipeline.  We anticipate having made at least 20 investments before the first anniversary of the fund.

Skip Simms, Fund Administrator

The Michigan Pre-Seed Capital Fund has approved its 8th investment for Phrixus Pharmaceutical Inc.  This Ann Arbor company is receiving funds from the BRCC and its founders.  The pre-seed funding is $100,000.

This brings the total investment amount made to date by the fund to more than $1.5 million.

The deal flow is very strong.  Four companies are currently being reviewed and evaluated by the Investment Review Board with at least two more companies finalizing their applications.

The Michigan Pre-Seed Capital Fund made its 4th investment last week.  SensiGen of Ann Arbor received a $250,000 investment as part of their $520,000 round.  SensiGen is a biotechnology company focused on gene based molecular diagnostics that will enable early detection of diseases. To date, SensiGen’s technology platform has been applied to the development of proprietary diagnostic tests for human papillomavirus (HPV), the primary cause of cervical cancer, and to kidney disease, a serious condition associated with diabetes, hypertension, and lupus.

These funds will be used to initiate Analyte Specific Reagents (ASR) validation and prepare for a first round of venture funds for development and launch of the HPV assay, along with some continuing work to finalize the Kidney test product.

This investment brings the total investments from the fund to date to over $850,000.  Applicant deal flow has hit 25 with several companies pending still looking for their match.

Skip Simms
Ann Arbor SPARK
skip@annarborspark.org

On January 3 Ann Arbor SPARK hosted an event that showcased 4 sources of capital available to Michigan start-ups who are nearly ready for their first round of equity investment. Automation Alley’s fund, Next Energy’s fund, the Frankel Fund and SPARK’s Michigan Pre-Seed Capital Fund presented their criteria for eligibility and the process for applying.  The link below will take you to the video of the program, which runs about 1 hr. and 40 minutes. You can fast forward through the parts you aren’t interested in.

Seed investors are those who like companies that are starting to generate revenue and have a product that is developed. They also like to see a management team mostly, if not entirely, filled out.  Pre-Seed funds are usually economic development funds that are willing to invest a little bit earlier and take the greater risk to help the company get to the stage where the private market will take over. In other words they will invest even if the product isn’t quite finished but has customers in a pipeline.  The management team is rarely complete at this stage but the needs are clearly identified.  However, these are not grants and because a return is desired a company still has to go through a due diligence process.  This is an excellent exercise for start-ups in preparation for the scrutiny the next type of investors will put them through.

The investment environment for entrepreneurs in Michigan is improving.  As a result we should see a lot more technology companies growing to maturity and profitability.