The Ann Arbor-based LED sign manufacturer recently received a $250,000 investment from the Michigan Pre-Seed Capital Fund. So far it has raised $600,000 in this seed capital round, and hopes to close out the round when it gets to $750,000 by the end of the month. The investment is coming on the heels of some rapid growth in the nine-year-old firm's revenues and staff.

"Our revenues have tripled," says Philip Ochtman, president of Estrakon. "The number of staff has gone up substantially. Last year we had eight people full-time and today we have 15. We expect to have 30-35 next year."

The company has a handful of interns today and is looking to bring on another 1-2 interns this summer, he says. The company is also looking to add independent sales people to its team.

Estrakon develops, manufactures and sells LED edge-lit signs for businesses from its base on the south side of Ann Arbor. That energy-efficient technology uses 80-percent less energy than traditional light sources and contains no hazardous materials. It's also a technology that ages well.

"The LED space is growing very quickly," Ochtman says. "People seem to love the products we're putting out."

Source: Philip Ochtman, president of Estrakon
Writer: Jon Zemke

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

The Ann Arbor-based startup is developing a product that focuses on quality control and optimization for the blood banking and transfusion industry. The technology analyzes stored blood to allow clinicians to predict the effectiveness of transfusions by assessing the levels and rates of quality loss during storage for individual units.

The investors from Great Lakes Angels moved on investing in Blaze Medical Devices so they could take advantage of Michigan's angel tax credit (it expired at the end of 2011) and because the 5-year-old start-up has also received two patents. That sort of forward progress makes the start-up an attractive company for a future acquisition.

"It appears Blaze Medical Devices will need less than $10 million to get to an exit," says David Weaver, chairman & founder of the Bloomfield Hills-based Great Lakes Angels. "That creates the opportunity for less dilution."

Weaver adds that Blaze Medical Devices is aiming to be acquired by 2015 or 2016. By then it should have $40 million in sales, proving the products viability but still leaving a high ceiling for  future sales.

Source: David Weaver, chairman & founder of Great Lakes Angels
Writer: Jon Zemke
News from Concentrate

The Ann Arbor-based startup is developing a product that focuses on quality control and optimization for the blood banking and transfusion industry. The technology analyzes stored blood to allow clinicians to predict the effectiveness of transfusions by assessing the levels and rates of quality loss during storage for individual units.

The investors from Great Lakes Angels moved on investing in Blaze Medical Devices so they could take advantage of Michigan's angel tax credit (it expired at the end of 2011) and because the 5-year-old start-up has also received two patents. That sort of forward progress makes the start-up an attractive company for a future acquisition.

"It appears Blaze Medical Devices will need less than $10 million to get to an exit," says David Weaver, chairman & founder of the Bloomfield Hills-based Great Lakes Angels. "That creates the opportunity for less dilution."

Weaver adds that Blaze Medical Devices is aiming to be acquired by 2015 or 2016. By then it should have $40 million in sales, proving the products viability but still leaving a high ceiling for  future sales.

Source: David Weaver, chairman & founder of Great Lakes Angels
Writer: Jon Zemke
News from Concentrate

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.

The Ann Arbor-based firm finished testing its pilot electric scooters earlier this year and is now in the final stages of developing its Beta bike. The three-year-old start-up hopes to begin mass producing the scooters later this year and with an eye for a market break-out in 2012. The company also plans to announce some key partnerships that will boost sales and production in the coming weeks.

"We have made major strides this year," says Lauren Flanagan, executive chair of Current Motor Co.

Current Motor Co., started by local environmentalists and tinkerers John Harding and Erik Kauppi, received a fresh round of funding earlier this year from BELLE Capital. It expects to finish raising that round of seed capital later this year and use it to enable mass production. Flanagan expects her company to flirt with profitability within the 12 months.

"We expect rapid growth next year," Flanagan says.

Source: Lauren Flanagan, executive chair of Current Motor Co.
Writer: Jon Zemke

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

The Ann Arbor-based firm finished testing its pilot electric scooters earlier this year and is now in the final stages of developing its Beta bike. The three-year-old start-up hopes to begin mass producing the scooters later this year and with an eye for a market break-out in 2012. The company also plans to announce some key partnerships that will boost sales and production in the coming weeks.

"We have made major strides this year," says Lauren Flanagan, executive chair of Current Motor Co.

Current Motor Co., started by local environmentalists and tinkerers John Harding and Erik Kauppi, received a fresh round of funding earlier this year from BELLE Capital. It expects to finish raising that round of seed capital later this year and use it to enable mass production. Flanagan expects her company to flirt with profitability within the 12 months.

"We expect rapid growth next year," Flanagan says.

Source: Lauren Flanagan, executive chair of Current Motor Co.
Writer: Jon Zemke

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

The Dare to Dream program, organized by U-M's Zell-Lurie Institute for Entrepreneurial Studies, distributes up to $100,000 each academic year to U-M students. The grants range in size from $500 to $10,000 and help students fund things like feasibility studies, business plan development and elevator pitch practice.

"We think that the student start-up ideas are great vehicles to those entrepreneurial skills," says Paul Kirsch, associate director of the Zell-Lurie Institute and leader of the Dare to Dream program.

This fall, 22 U-M student-led start-ups split $34,500 in seed capital. One of the big winners includes $10,000 to SecureHealing, which specializes in privacy monitoring and reporting across healthcare software systems. Another grant winner is Smart Peru, an all-inclusive Peruvian website, that won a $500 Venture Shaping Grant. Some winners also received invitations to Ann Arbor SPARK's Entrepreneur Boot Camp and $5,000 worth of business consulting.

The Zell-Lurie Institute has offered the Dare to Dream grants since 2002. Many of the start-ups never took off, but some have turned into the darlings of Michigan's entrepreneurial class lately, such as Are You a Human and Own Point of Sale, both of which recently closed more than $1 million in venture backing each.

Source: Paul Kirsch, associate director of the University of Michigan's Zell-Lurie Institute for Entrepreneurial Studies
Writer: Jon Zemke

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

The Dare to Dream program, organized by U-M's Zell-Lurie Institute for Entrepreneurial Studies, distributes up to $100,000 each academic year to U-M students. The grants range in size from $500 to $10,000 and help students fund things like feasibility studies, business plan development and elevator pitch practice.

"We think that the student start-up ideas are great vehicles to those entrepreneurial skills," says Paul Kirsch, associate director of the Zell-Lurie Institute and leader of the Dare to Dream program.

This fall, 22 U-M student-led start-ups split $34,500 in seed capital. One of the big winners includes $10,000 to SecureHealing, which specializes in privacy monitoring and reporting across healthcare software systems. Another grant winner is Smart Peru, an all-inclusive Peruvian website, that won a $500 Venture Shaping Grant. Some winners also received invitations to Ann Arbor SPARK's Entrepreneur Boot Camp and $5,000 worth of business consulting.

The Zell-Lurie Institute has offered the Dare to Dream grants since 2002. Many of the start-ups never took off, but some have turned into the darlings of Michigan's entrepreneurial class lately, such as Are You a Human and Own Point of Sale, both of which recently closed more than $1 million in venture backing each.

Source: Paul Kirsch, associate director of the University of Michigan's Zell-Lurie Institute for Entrepreneurial Studies
Writer: Jon Zemke

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

"We have $400,000 in loans that are due between now and the end of the year," says Skip Simms, a senior vice president of Ann Arbor SPARK and manager of the Michigan Microloan Fund Program.

The $1.5 million fund got its start in the wake of the financial crisis and the frozen commercial credit lines that followed. The fund makes five-figure loans to local start-ups in dire need of capital to accelerate growth. These loans run two years before a balloon payment is due for the full amount plus 12 percent interest. That money is reinvested into the fund to make more loans in the future. Ann Arbor SPARK has made 34 loans worth $1.2 million.

Akervall Technologies, makers of the Protech Dent mouth guard, is the first start-up to repay the loan. The Ann Arbor-based firm repaid its $15,000 microloan in 15 months, nine months before it was due. On the other end of that spectrum, the Michigan Microloan Fund Program has had to write off two loans and might have to work out payment plans with a penalty for a few more.

"They're high-risk," Simms says. "We anticipate that some of these entrepreneurs won't make it." He adds that a majority of the loans will be repaid in full and that the repayment number will "exceed expectations."

Source: Skip Simms, a senior vice president of Ann Arbor SPARK
Writer: Jon Zemke

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