SE Michigan Startups Nab Pre-Seed, Microloan Funding
Ann Arbor SPARK and Wayne State University recently announced that eleven Southeast Michigan startups have received investments from the Michigan Pre-Seed Capital Fund and microloan awards from the Ann Arbor/Ypsilanti Local Development Financing Authority (LDFA). The investments are meant to help early-stage companies commercialize their technology.
Three companies from TechTown’s business accelerator program received pre-seed capital funding:
- Angott Medical Products, founded by serial entrepreneur Paul Angott, received $250,000 to further work on a prototype device that detects breast cancer.
- Clean Emission Fluids, which has created a stand-alone, portable unit that allows gas stations to easily incorporate biofuels into their offerings, received $210,000 in matching funds. The pre-seed investment allows the company, which already employs six people, to expand the R&D operations and scale the pace and volume of production.
- Cleantech firm ENRG Power Systems received a $50,000 loan for development of its plasma ignition system, which bolts onto existing fleet vehicles to increase fuel efficiency between 14 and 21 percent.
Eight Ann Arbor companies snagged microloan awards of $10,000 to $50,000 from the Ann Arbor/Ypsilanti LDFA:
- Buycentives, an online consumer-incentives platform.
- CareCheq, a Web portal that allows care-givers and patients to communicate through social media.
- Freestride Therapeutics, which is in the process of commercializing products aimed at people with bone-related conditions.
- Ix Innovations, a company developing a line of instruments to measure power and electrical currents.
- My Repair Facts, an online resource that allows buyers and sellers of used cars to access a vehicle’s repair history.
- Open World Energy, which uses proprietary energy management software to help commercial and industrial buildings to become more energy efficient.
- Reveal Design Automation, a developer of quality control software for use with semiconductors.
- Therapy Charts, a software as a service platform for independently practicing therapists.
Skip Simms, Ann Arbor SPARK senior vice president and administrator of the Michigan Pre-Seed Capital Fund and microloan programs, says that microloans in particular are often needed to get a company to hit the milestones that will generate more investment.
A few years ago, the state recognized that many early-stage tech companies were stuck after burning through initial investments from friends and relatives. They offered products or services that sounded promising, but they weren’t quite far along enough to attract additional investors.
“The state put the fund together to give entrepreneurs a fighting chance,” Simms says. “We know not all of them will succeed, but at least they have the opportunity.”
Simms says that after companies get microloan funding, they can come back later for pre-seed funding. For those who may grumble that this is another money-losing folly undertaken by state government, Simms says loans awarded in 2009 and 2010 are now being paid back and re-loaned.
To date, a total of $2 million has been loaned through the Michigan Microloan Fund program .