Venture Capital

Big tech names launch Detroit Venture Partners

By Newsroom

●

December 9, 2010

A few of Metro Detroit's biggest names in tech are getting together to launch a new venture capital firm, Detroit Venture Partners.Josh Linkner of ePrize, Dan Gilbert of Quicken Loans, and Brian Hermelin of Rockbridge Growth Equity started the VC firm in downtown Detroit with the idea of putting Metro Detroit's tech sector growth on steroids. Detroit Venture Partners plans to invest in early-stage companies in internet, digital media, marketing, and direct-to-consumer technologies, sports and entertainment, social media, e-commerce, and software. "Your bio-tech or advanced manufacturing idea may be groundbreaking, but that's not our focus," says Detroit Venture Partners' website. "We'd just screw it up if we got involved."Linkner (the short and sarcastic one, according to the website) will serve as the firm's CEO and managing partner. Gilbert (the comic sans font and hair product fan) and Hermelin (the bald brains of the trio) will serve as general partners. The five-person VC firm plans to make 6-8 investments in 2011 and up to 10-20 the next year. Its long-term plan is to make a difference in Metro Detroit by creating economic opportunity."We really want to become a significant venture firm in town, similar to what you see in Silicon Valley," Linkner says.Source: Josh Linkner, CEO & managing partner with Detroit Venture PartnersWriter: Jon ZemkeRead more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Latest in Venture Capital

Beringea invests VC in ReCellular

By Newsroom

●

Economic Development

●

October 14, 2010

The local venture capital hero has struck again, investing in another emerging business in southeast Michigan. Translate that to Farmington Hills-based Beringea, Michigan's largest venture capital firm, investing an undisclosed sum into ReCellular, the cell phone recycler based in Dexter.This is the 17th investment from Beringea's InvestMichigan! Growth Capital portfolio. Beringea has grown that portfolio from $150 million to $180 million, primarily by investing in Michigan-based companies with cash from the State of Michigan Retirement System. Among those are Ferndale-based Livio Radio and Sakti3 of Ann Arbor earlier this year. More investments are on the way soon."I believe we will have more out there before the end of the year," says Michael Gross, managing director of Beringea.ReCellular is the world's largest cell phone recycler. The company started out 19 years renting cell phones when they were a rare, expensive commodity. Once they become ubiquitous a decade ago, ReCellular overhauled its business plan to recycling and refurbishing the electronics.The Dexter-based business now employs 300 people worldwide, including about 50 in Ann Arbor and 230 in Dexter. That facility handled about 5 million cell phones last year, of which approximately 70 percent were refurbished and resold. The rest were recycled for precious metals, keeping about 1.6 million pounds of toxic material out of landfills. Beringea sees an investment in ReCellular as a clean-tech play with considerable room for growth."The company has really evolved over the last few years," Gross says. "They have positioned themselves nicely."Source: Michael Gross, managing director of BeringeaWriter: Jon Zemke

Beringea’s investments in green tech and smart phone accessories gain momentum

By Newsroom

●

Arts and Culture

●

September 16, 2010

Last week was a healthy one for Beringea and its Michigan-based portfolio. The state's largest venture capital firm invested in a smart phone accessory company and received subsequent backup for one of its previous green-tech investments in Ann Arbor-based Sakti3. GM Ventures, the VC arm of General Motors, led a $4.2 million investment round in Sakti3, contributing $3.2 million. Beringea had funded the University of Michigan spin-off earlier this year along with Silicon Valley-based Khosla Ventures. "We're really pleased," says Jeff Bocan, managing director of Beringea. "It's excellent validation. They're moving forward at a fast pace. Faster than we expected."The Farmington Hills-based company also made an unspecified infusion into mophie from its InvestMichigan! Growth Capital Fund. Mophie is a Paw Paw-based company that designs and manufactures accessories for smart phones. One of its principal products is a protective case that improves the battery lives of iPhones. Beringea's investment is expected to help fund development of future products and also bolster the company's marketing efforts."We're excited about a lot of what they're doing," Bocan says. "They're making smart phones more useful."Source: Jeff Bocan, managing director of BeringeaWriter: Jon Zemke

InvestMichigan! VC fund pumps $96 million into Michigan companies

By Newsroom

●

Arts and Culture

●

September 16, 2010

The InvestMichigan! Growth Capital Fund is putting up some impressive numbers these days. It has invested $95.78 million in 20 Michigan-based companies which employ 2,800 people.That list of companies reads like a who's who of promising start-ups, including Ann Arbor-based Accuri Cytometers, Salon Grafix of Auburn Hills, and InTouch Health. That last company is moving from California to Michigan, thanks in part to that investment."It's evidence that there is a vibrant, emerging economy taking shape," says Charlie Rothstein, founder and senior managing director of Beringea. The Farmington Hills-based venture capital firm, the largest in Michigan, is co-managing the InvestMichigan! Growth Capital Fund with Credit Suisse's Customized Fund Investment Group.The fund is made up of institutional investors such as the State of Michigan Retirement Systems and Municipal Employees Retirement System of Michigan. The fund invests in early stage and mature companies that are either headquartered in or moving to Michigan, or have a significant workforce in the state.So far about 46 million, or 40 percent, of the total program capital has been allocated or reserved. The fund has proven to be quite popular with local start-ups, having received applications for 846 potential investments in August alone.Source: Charlie Rothstein, founder and senior managing director of BeringeaWriter: Jon Zemke

Renaissance Venture Capital Fund raises $50M

By Newsroom

●

Community Development

●

September 9, 2010

The venture capital fund of all funds in Michigan is now fully operational, and it has ties all over Metro Detroit.The Renaissance Venture Capital Fund closed a $50 million investment vehicle earlier this week from a number of local business institutions. The downtown Ann Arbor-based firm, which also has an office in downtown Detroit, plans to invest that money in both local venture capital firms and out-of-state venture capital firms with the intent to invest in local companies. "It's probably going to invest exclusively in other venture capital funds," says Chris Rizik, CEO of the Renaissance Venture Capital Fund and a Northville resident. "We feel we will have more leverage that way."The fund of funds has already invested almost $6 million (for a total commitment of $20 million) in half-a-dozen venture capital firms. Those firms in turn have invested more than $23 million into 12 Michigan companies, creating about 200 new jobs. Those companies have leveraged that investment to receive over $146 million in further venture funding. Renaissance Venture Capital Fund expects its money will touch 100-150 companies, creating hundreds of new jobs rooted in the new economy. It has already disbursed its first profits to investors. The fortunate six venture capital firms include Ann Arbor's Arboretum Ventures and RPM Ventures, along with Kalamazoo-based T-Gap Ventures. Out-of-state firms receiving an allocation include San Francisco-based 5AM Ventures, Houston's DFJ Mercury Ventures, Illinois-based MK Capital, and Florida's Arsenal Ventures. The last two are opening Michigan offices following Renaissance Venture Capital Fund's investment. The Renaissance Venture Capital Fund was put together by the Business Leaders For Michigan and is funded by the likes of DTE Energy, AAA, Blue Cross Blue Shield of Michigan, and Huntington Bank. Most other funds of funds are supported with public money. Michigan's private model makes it an industry leader and example of how Michigan is breaking new economic ground when it comes to reinventing its economy."That isn't happening anywhere else in the country," Rizik says.He expects his 3-person firm, which is looking at adding interns next summer, to finish disbursing the money over the next year or two. Fundraising for the next investment vehicle, which might also make investments directly into companies, will begin in 2012.Source: Chris Rizik, CEO of Renaissance Venture Capital FundWriter: Jon Zemke

First Step Fund invests in 10 Metro Detroit start-ups

By Newsroom

●

Arts and Culture

●

September 9, 2010

The number of loans from the First Step Fund has now hit double digits and is expected to go higher soon.The TechTown-based microloan fund has made small loans to 10 companies across southeast Michigan. Those companies range from the Jimmy Kicks custom shoe operation in Detroit to Ann Arbor-based grant writing software firm InfoReady. "We have been thrilled with the quality and quantity of applications," says Matthew Naegle, an associate with the First Step Fund.Among the other companies to receive loans so far are Clean Emission Fluids (Detroit), Current Motor Company (Ann Arbor), Launch Learning Group (Detroit), Livio Radio (Ferndale), NextCat (Detroit), Air Movement Systems (Detroit), Coliant Corporation, and Bandals (Rochester Hills). More than half a million dollars in loans have gone to these companies over the summer.Invest Detroit and Ann Arbor SPARK, which runs the Michigan Micro Loan Fund, created the First Step Fund earlier this year. The idea is to create a funding source for local start-ups starving for seed capital. The current credit crisis has resulted in traditional lending institutions cutting back on investment capital.Each loan averages about $50,000 and is either short-term or in the form of a convertible note. Proceeds are usually used to push forward product development or expand inventory. Loan recipients are picked by a board independent of TechTown. Source: Matthew Naegle, an associate with the First Step FundWriter: Jon Zemke

Realtime Technologies fills out customer base in Royal Oak

By Newsroom

●

Arts and Culture

●

August 26, 2010

Realtime Technologies has landed an investment from Siemens Venture Capital while it continues to grow its downtown Royal Oak office.Siemens Venture Capital, which didn't disclose the amount of the investment, cited Realtime Technologies' continuous double-digit growth since its inception in 1999, along with its global customer base for high-end 3D visualization technology. "We just want to be like Pinky & The Brain and take over the world... but in a nice way," says Clayne Woodbury, national sales director for Realtime Technologies.The company employs 10 people at its Royal Oak office and is looking to add some staff there in the near future. Part of the reason for that expansion is its increased sales volume to its existing customer base and expanding into emerging markets, such as China."We have had some huge projects, and it's been multiplying," Woodbury says.Realtime Technologies creates simulators for the likes of the automotive industry and is expanding to other areas, such as simulating soil shifting for environmental firms. It's also looking at expanding into the video game world.Source: Clayne Woodbury, national sales director for Realtime TechnologiesWriter: Jon Zemke

Relume adds staff to fill LED orders

By Newsroom

●

Arts and Culture

●

July 29, 2010

Relume continues to turn its march to change incandescent streetlight bulbs to energy-efficient LEDs into more jobs in Oxford.The 16-year-old firm is capturing sales across the nation to the extent that it is adding sales staff in places like Pennsylvania and California. It has also attracted a shot of venture capital to grow its headcount to 50 people."We have plans to add even more," says Rick Nelson, vice president of sales for Relume, adding he expects the firm to move to a larger production facility but stay in northern Oakland County.LED lights are 30-40 percent more efficient than standard incandescent bulbs. Demand has become higher and higher as energy efficiency becomes more en vogue with public and private organizations. Streetlights have become a popular fit for LEDs, which local governments are employing with increasing frequency as they look to capitalize on lower energy bills and good publicity.The city of Ann Arbor has been a pioneer in that category. It has changed all of the streetlights in its downtown to LEDs over the past couple of years and is now working to incorporate them in other lights throughout the city. It has recently placed another order with Relume."Ann Arbor, as is often the case with it, is on top of this," Nelson says. "They have kept their eyes on things. They're early adopters."Source: Rick Nelson, vice president of sales for RelumeWriter: Jon Zemke

iNetworks Michigan Fund commits $20M to biotech investment

By Newsroom

●

Community Development

●

July 29, 2010

Pittsburgh-based iNetworks sees what is happening in Metro Detroit's economy and is not afraid."They're really looking at it as a really untapped area," says Greg Auner, manager of the iNetworks Michigan Fund. "Also, it's Pittsburgh that went through a downturn and rebuilt itself. To them this is a natural thing."The $20 million investment fund will focus on startups developing biomedical technologies, such as the latest and greatest in medical instruments. Pittsburgh reinvented itself after the fall of the steel industry in the 1980s by diversifying its economy around new industries, such as bio-tech and life sciences, and iNetworks was one of its major players.The Michigan Fund will provide seed capital with the idea of repeating that same strategy. Michigan has a strong background in developing and commercializing biotech and life sciences companies, thanks to its workforce and strong research universities. The Detroit-based fund calls TechTown and a Stroh's River Place office home for its four employees, who are raising $20 million for the fund and expect to have it ready to go by the end of this year.Source: Greg Auner, manager of the iNetworks Michigan FundWriter: Jon Zemke

Bill Gates, Silicon Valley VC invest $23.5M in Troy’s EcoMotors

By Newsroom

●

Arts and Culture

●

July 15, 2010

Some big names in business have made an even bigger investment in a Metro Detroit start-up; namely, Bill Gates and Khosla Ventures of Silicon Valley fame. The start-up: EcoMotors. The investment: $23.5 million.The venture capital investment will allow the Troy-based business to finish developing and testing its opoc engine. The innovative motor vehicle engine is expected to be much more efficient than the traditional internal combustion engine.Opoc's opposed pistons and cylinders are much more efficient, delivering 50 percent better fuel economy compared to conventional engines. This is made possible by virtue of it's being half the weight and size and containing half the parts of a normal vehicle engine. EcoMotors was founded two years ago. The engine was designed by the company's current chair and CTO, Peter Hofbauer, who designed fuel efficient diesel engines as the former head of powertrain development at VW. The firm's CEO, Don Runkle, helped spearhead the development of the General Motors EV1 electric car in the 1990s.Source: EcoMotorsWriter: Jon Zemke