While Silicon Valley remains a leading pillar of innovation, it's certainly not the nation's only one. Innovation hotspots continue to pop up across the country, enjoying relatively a high rate of growth. "I think that everybody's got the message on innovation," said Michigan Growth Capital Symposium (MGCS) Founder David J. Brophy, Director and Professor of Finance at the University of Michigan Ross School of Business. "Every university wants to improve the pure research that it's doing. It's getting a little more difficult because of federal budget difficulties; it's tougher to get dollars from the research agencies, and you've got to learn to live with less. That should, and probably has, put pressure on the universities to speed up their commercialization and the rate at which they change invention into innovation, which really is the transition that happens when we license to a big company or when we license to a startup."
Cambridge, Massachusetts based Flagship Ventures manages over $900 million in capital. The firm is comprised of two units: VentureLabs creates innovative startups, and Venture Capital serves as the finance arm. Flagship invests in medical technologies, therapeutics and sustainability.
Ann Arbor-based Monarch Antenna, Inc. has found Michigan to be a great place to launch and grow. "We thought that this technology might not be something that Michigan would understand," said CEO Randy Dence. "While it certainly took a greater effort to build and spread the message, we found that Michigan gets it."
Madison, Wisconsin-based NeuWave Medical develops and commercializes energy-based minimally invasive medical devices. The company, comprised of engineers and physician-scientists, uses a microwave ablation system to deliver the most effective treatment solutions for a variety of diseases. "The devices NeuWave makes treat local liver, lung and bone cancers," said President and CEO Laura King. NeuWave also supports research collaborations with leading clinicians throughout the world.
Michigan's Bank of Ann Arbor is a full service institution offering business financial services. Within the Bank, the Technology Industry Group focuses on business banking products for early to late stage innovation-based companies, angel investment companies, and venture capital firms.
It's a well known fact that there are about half as many venture funds today as there were in 2000. While this can be attributed to the burst of the dot-com bubble, the decline is still a sharp one. Michigan Growth Capital Symposium (MGCS) Founder David J. Brophy, Director and Professor of Finance at the University of Michigan Ross School of Business said that drastic adjustment has reverberated through the limited partner community. "It has been very tough to separate them from their money," he said. "Technology and the application of technology is key right now as far as venture capital is concerned.
Houston, Texas-based seed and early-stage VC firm Mercury Fund is seeking out entrepreneurs and innovati ve in software and science- based startups, targeting the central United States. "We look for companies and entrepreneurs who have been very savvy in the way they have built their business," said Managing Director Blair Garrou. "It does''t mean they haven't raised any capital to date, but we like to find people who get the most out of their regional resources."
Indianapolis, Indiana-based institutional pharmacy Wellfount Corporation delivers medications to nursing and assisted living facilities across the country. The company offers a unique technology that changes the pharmaceutical supply chain between physicians and patients. Wellfount removes a number of human touches throughout the process, removing 40% of medication waste and expense. It also saves about 16-20 hours a day of nursing time for facilities, allowing them to dispense medications on demand.
Chicago-based Cocoa Compost, previously known as the Premium Compost Company, takes organic waste materials and transforms them into compost-based fertilizers used on agricultural fields. "We get paid a tipping fee revenue to take the organic waste materials to transform them into compost fertilizers," said Founder and CEO Adam Brent. "Then we get paid for the fertilizer compost from the farmers." Cocoa takes pride in not only its technology, but also its positive impact on the environment.
Changes in business cycles can throw off even the most prepared and experienced entrepreneur, but law firm Bodman PLC works to keep its clients on steady footing. With offices in Detroit, Ann Arbor, Troy, Cheboygan and an affiliate in Dallas, Texas, Bodman is dedicated to helping its clients find new sources of financing, protect their assets, increase efficiency and rethink conventional practices.The firm has a number of spin-off and start-up companies among its clientele, most of which have recently licensed technology from the University of Michigan. "I would argue that we've done more spin-offs than anyone else over the years," said Business Practice Group Chairperson Tim Damschroder.
In a competitive world, knowledge is power – and Michigan Growth Capital Symposium (MGCS) Founder David J. Brophy, Director and Professor of Finance at the University of Michigan Ross School of Business said entrepreneurs need to approach investors with the right information to get deals done. "It's not enough to have an idea, it's not enough to have a technology - you have to have a defined need, an addressable market, and an expert team that has domain knowledge in the field in which you're trying to sell your product," he said. "The product has to meet a clearly visible, well-defined point of pain among a group of customers that is substantial and growing."
Ohio-based investment firm Allos Ventures focuses on early-stage software and business services companies, working to expand capital provided by angel investors. Investing in two companies per year, Allos looks for entrepreneurs who demonstrate expertise within their industry - especially those in big markets with hot selling products.
Entrepreneurs have very little time to make their case to investors. The Grand Rapids-based Michigan Small Business and Technology Development Center (MI-SBTDC) is a valuable resource to help business developers perfect their presentation skills. Through a longstanding partnership with the Michigan Growth Capital Symposium (MGCS), the MI-SBTDC trains and coaches entrepreneurs in their pitch. "We coach our clients on a one-on-one basis," said Technology Team Manager Alain Piette. "We help them understand their business and repackage the idea in such a way that the marketplace understands it. Many business owners want three hours to present, but they get 10 minutes. We help our clients condense their message into the essentials."
Dayton, Ohio based Commuter Advertising's core innovation is location-triggered digital media on public transit. With active campaigns in Champaign and Chicago, IL; Dayton, Cincinnati and Toledo, OH; Kansas City, MO; Pittsburgh, PA, Rockland County NY; and Jacksonville and Tampa, FL, the company is able to target advertisements on public transportation to businesses as they are passed along the route.
Spartan Innovations, L3C is the newest component of the Michigan State University Innovation Center. Offering helpful resources to create sustainable start-up ventures, the company identifies MSU technologies that would be best served by forming a start-up company rather than the traditional licensing path. "The process of commercializing technology might be quite slow through the licensing path. Our goal is to expedite commercialization," said Director Ruben Derderian. "We identify technologies that we think have a lot of potential."
While the venture capital and private equity industries are distinctly separate, Michigan Growth Capital Symposium (MGCS) Founder David J. Brophy, Director and Professor of Finance at the University of Michigan Ross School of Business said the lines between the two are becoming more blurred. "There are lots of links," he said. "It might have been argued five, ten years ago that the venture market and the private equity market were oil and water. But they're melding together, and they do for each other."
Venture capitalists have a valuable resource in the University of Michigan Office of Technology Transfer. According to Executive Director Ken Nisbet, many in the VC community have remarked on the university's high quality startups in terms of a quality and impact. "We take university discoveries and license them to different companies," he said. "We help create company licenses and assist in building them. We have a very large research budget and conduct multiple startups a year. U-M is among the top ten universities in terms of the quantity of university-based startups that are licensed and launched."
The Michigan Venture Capital Association (MVCA) provides vital support to the state's VC and angel investment communities. The organization has over 200 individual members representing over 70 private and corporate VC funds, angel investors, private equity firms and entrepreneurial infrastructure participants. "The MVCA has been very successful in the state of Michigan, probably the most successful organization of its type in the Midwest," said MVCA Board Chair and Arboretum Ventures Managing Director Tim Petersen. "Our organization gives businesses from outside the state of Michigan access to other venture capitalists in the state, and organizes meetings for venture capitalists, law firms and accountants who are active in the state."
Grand Rapids-based Hopen Life Science Ventures has made five investments to date, is near to closing on a sixth, and has a few deals in process. "We'd expect that in the next six months or less to be closing on at least two, possibly three, investments," said Managing Director Mark Olesnavage.
Ann Arbor-based Blaze Medical Devices LLC is developing a tabletop blood analyzer measuring how much each unit of blood in the blood bank's inventory is degrading as an indicator of quality. This will allow them to shuffle the inventory to use up the blood units degrading the fastest. Currently, hospitals have not had means to know the quality of each unit and can only estimate it based on age from the date of donation, knowing all blood does degrade over time. This can be costly to patients, possibly leading to organ failure or death. With Blaze's new technology and metrics, hospitals will be able to treat their patients more effectively. "We want everyone to get the best blood possible delivered to them for their particular needs," said CEO David Weaver. Currently the company has hospitals around the world signed up to test the new devices.
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