Gary Anglebrandt CommunicationsCoverage of Michigan’s venture capital and private equity investment industry, and the companies they invest in
I was the lead editor and sole writer for this project, a ranking of intellectual property-heavy companies in Southeast Michigan, with a full complement of editorial coverage. I coordinated the project with our vendor, a patent research firm in Chicago.
Automotive suppliers and life sciences companies led the pack in this year’s Eureka Index, Crain’s annual focus on innovative companies.
Many are well known, but some are more under the radar.
Mohammed Islam could be a poster child for a patenting professional.
He’s founded six companies based on his patents. He teaches courses on the subject, showing University of Michigan engineering students the right and wrong ways to win patents. And he has collected more than 150 patents of his own, or so he thinks.
“The last time I checked, in total, it was around 150. I lost count,” he said.
Fundrise specializes in real estate projects, investing its own money into them. It then funds this investment through sales of “project payment dependent notes,” which are directly tied to Fundrise’s preferred equity stake in the real estate project. Investors buy them through the Fundrise website and gain or lose according to the performance of the notes.
In effect, investors are buying interest-bearing securities issued by Fundrise, not the entity behind the real estate project being funded. As the issuer, Fundrise, not the real estate developer, is responsible for managing investor disclosure and reporting requirements.
Though it is registered with the state as a MILE website operator, it has not used MILE rules, or any other state’s intrastate crowdfunding mechanism, for any deals and does not plan to do so. Intrastate rules put fundraising companies at too much risk of running afoul of federal securities laws, said Fundrise President Dan Miller. “We’re now focused on (using) federal rules” for the legal framework of its deals, he said.
Fundrise has done about 35 deals since its launch in 2010. None of them has been in Michigan, but it’s in talks with local developers about using its crowdfunding platform for projects in the state. Because of federal rules on soliciting securities, and because the agreements are still being hashed out, Fundrise can’t say precisely which properties are under discussion. But Miller said talks are ongoing over 10 deals and four of those “are a little further along than talking.” He expects to close on those four this year.
Among those four properties are a Corktown warehouse that would be converted to restaurant and retail use; an empty downtown Detroit building of more than 30 stories that would be put to retail, restaurant and possibly hotel use; and a property near Great Lakes Coffee in Midtown that would have restaurant or retail on the ground floor and apartments in the upper levels.
The fourth project is the redevelopment of the former Tiger Stadium property. Fundrise and Bloomfield Hills-based developer Larson Realty Group last month announced a possible crowdfunding angle to the project. The crowdfunding portion of the capital raise would take place in fall and have a cap of $500,000, or 10 percent of the project’s preferred equity. The agreement between Fundrise and Larson has not been finalized, though, so the details could change.
For all four deals, Miller said the goal is to arrange the offerings so investors can participate for as little as $100.
Nationally, the year in venture capital is wrapping up as a strong one. For Michigan — yes and no.
The most recent MoneyTree compilation of U.S. venture capital investing data, released by PricewaterhouseCoopers LLP and the National Venture Capital Association, shows Michigan deal volume at its lowest point in three years.
Dollars invested, however, show one of the best periods in recent history.
It’s fitting that a competition meant to raise Michigan’s profile was inspired by one of the most Michigan of all symbols: University of Michigan‘s big block M logo.
The big M came on a screen during an investor presentation a long way from home, in California. Sitting in the audience was Dave Egner, executive director of the New Economy Initiative and president of the Hudson-Webber Foundation.
1,400 applications. 15 countries. $4 million in prizes. 47 winning companies. 14 winning student teams. 74 participating angel and venture capital investors.
Amid all the numbers illustrating the impact the Accelerate Michigan Innovation Competition has had in its first four years, it’s easy to forget the actual products supported through the event.
The existence of a competition like Accelerate Michigan Innovation Competition is proof of sorts that Michigan’s venture capital community has come of age.
Any thriving regional venture scene is going to have a respected competition in its mix of offerings and assets, industry folks say. Besides drawing publicity, the competitions also play a crucial role in the venture funding spectrum by offering very early-stage companies a chance to get capital.
(One of three promotional articles done for the Accelerate Michigan Innovation Competition’s 5-Year Anniversary)
The existence of a competition like Accelerate Michigan Innovation Competition is proof of sorts that Michigan’s venture capital community has come of age.
Any thriving regional venture scene is going to have a respected competition in its mix of offerings and assets, investors say.
Besides drawing publicity, the competitions also play a crucial role in the venture funding spectrum by offering very early-stage companies a chance to get capital. … (Full Ganglecom articles here – PDF)
Kalamazoo-based Ablative Solutions Inc. is being watched as it attracts investment dollars. But another big reason to watch this company is the force of the people behind it.
Namely, the Fischell family.
Tim Fischell, M.D., is a practicing interventional cardiologist and CEO of the company. His brother, David, has a Ph.D. in physics and is chairman of the company.
The Fischells have about 250 medical device patents among them and have started 16 companies and counting.
Swift Biosciences Inc. makes chemical reagents that prepare samples of DNA to go into the machines that read the DNA sequences for clinical research.
David Olson, president and CEO of the Ann Arbor-based company, likens reading DNA sequences to trying to read a shredded-up phone book of all the phone numbers on the planet. One thing that helps computer scanners to read those sequences is to tag the ends of them. Swift makes the tags.
It was a long time coming, but Delphinus Medical Technologies Inc. started this year off with a big step toward entering the revenue stage.
The Plymouth Township-based company announced Jan. 7 that the U.S. Food & Drug Administration had cleared the company to sell its SoftVue device used to detect breast cancer.
ProNAi Therapeutics Inc. has been watched by investors this year as the company, coming off a successful trial for its cancer-fighting drug, looks at a possible IPO.
The Plymouth Township-based company raised $12.5 million in a round that closed in December and was led by Capital Midwest Funding in Milwaukee and joined by Apjohn Ventures of Kalamazoo.
National venture investment numbers were driven up last year by investors looking to be part of the buzz surrounding “disruptive” technologies that could change the way any number of industries do business.
One of those technologies comes from Ann Arbor-based AgriSight Inc., and its target industry is a little off the beaten investor path: farming.
The company is better known by its product — FarmLogs, a web-based farm management software that helps farmers track a range of data and better manage their operations.
Early last year, the president of the National Venture Capital Association remarked that Michigan was headed in the opposite direction of the rest of the country — and that was a good thing.
Michigan’s deal volume and the dollars attached to those deals were on the rise, while the national numbers were headed downward.
“As Michigan goes, so does the rest of the country not go,” said Mark Heesen, NVCA president at the time.
The numbers for 2013 are in, and they show Michigan partly fell in line with the rest of the industry last year.
Like other startups, medical device entrepreneurs need to demonstrate a market for their products or services.
Then there’s another obstacle to clear before most investors will write a check: reimbursement.
As health care reform and hospital consolidation change the industry landscape, investors are increasingly looking for proof that new product will be reimbursable through Medicare and insurers. That takes more research, data and time.
The biggest element that’s lagging in Michigan’s medical device industry?
Talent.
That’s the most immediate and common answer among the state’s industry players.
Many medical device companies are started because a doctor sees a need in the field. Wright & Filippis Inc. was founded to meet an even more immediate need.
At age 13, Anthony Filippis lost his lower legs after badly hurting his feet in a train accident. He would later persuade the man who made his first prosthetic legs, Carl Wright, at a prosthetics company called Martin-Halstead Co., to start their own company in 1944.
Kalamazoo, Grand Rapids and Ann Arbor make it easy to overlook Marquette, sitting at the top of Michigan’s Upper Peninsula.
One company that didn’t overlook Marquette was RTI Biologics Inc. The Alachua, Fla.-based firm in July paid $130 million for a company based there, Pioneer Surgical Technology Inc., a maker of spinal implants, bone grafts and other products. The combined company is now called RTI Surgical Inc. and is based in Alachua.
The impact of a successful startup can be felt long after it’s gone, adding jobs for years to come, as can be seen in the cases of Sarns Inc. and DLP Inc.
One of those entrepreneurs is Dick Sarns, described by one investor as a patriarch of the medical devices industry. He started Sarns Inc. in 1960 to make a heart-lung machine used in cardiac bypass surgery.
Sarns grew the company and, to grow it further, sold it to 3M Co. in 1981, staying on as general manager for several years. In 1999, 3M sold the business to Tokyo-based Terumo Corp.
Michigan’s medical device industry has witnessed the sale of a growing number of its companies in recent years. The following lists some that state experts and players in the industry consistently mention as the most noteworthy.