Michigan Pre-Seed Capital Fund Awards $4 Million in First 10 Months, Supports Creation of 600 Innovation-Based Jobs Over Next 2 Years
DATELINE: ANN ARBOR, Mich. Dec. 20
ANN ARBOR, Mich., Dec. 20 /PRNewswire-USNewswire/ -- The Michigan Pre-Seed Capital Fund, a collaborative effort of Michigan's 12 SmartZones and the Michigan Economic Development Corporation, has dispersed more than $4 million of the $6.6 million in start-up investment monies that it was awarded through the 21st Century Jobs Fund. The Michigan Pre-Seed Capital Fund invests in technology-based companies that are creating and retaining jobs in the state.
The Michigan Pre-Seed Capital Fund is a highly successful investment vehicle that is a model for economic development groups across the country. Michigan Pre-Seed Capital Fund performance to date:
-- 18 investments made over 10 months to advanced manufacturing &
materials, alternative energy, homeland security & defense, and life
science businesses.
-- Attracted 1.5 times matching funds from outside sources to support
emerging Michigan businesses.
-- Average time from application to funding decision is less than 60
days.
-- Collaborative program that is accelerating business growth statewide.
"The consistent and robust deal flow through the Michigan Pre-Seed Capital Fund is an indication of the explosion of entrepreneurial activity throughout the state as well as the need for early stage funding that can support business acceleration," explained Skip Simms, administrator of the Michigan Pre-Seed Capital Fund. "The demand for the funding provided through the Michigan Pre-Seed Capital Fund is overwhelming, with university tech transfer offices, local business accelerators, SmartZones and the Michigan Small Business and Technology Development Center all reporting ever-increasing demand for funding that can support early stage business growth."
To date, more than 58 companies have expressed interest in receiving pre- seed investment and the Michigan Pre-Seed Capital Fund has made 18 investments to innovation-based start-up businesses throughout Michigan. Businesses in nine Michigan communities in six counties received support from the Michigan Pre-Seed Capital Fund's statewide reach.
The Michigan Pre-Seed Capital Fund is an equity fund that requires recipients to obtain matching funds from another source; the more than $4 million awarded through the Fund was matched with over $6.5 million in funding from other sources, resulting in more than $10.5 million in new business investments in the state.
"The Michigan Pre-Seed Capital Fund fills a critical gap in the funding cycle for the 'newest' companies at the earliest stage of development," said Lindsay Aspegren, general partner with North Coast Technology Investors, a Michigan-based venture capital firm. "I don't know of a single program in any other Midwestern state that is as quick and responsive as the Michigan Pre- Seed Capital Fund to the needs of entrepreneurs at the earliest stage. The Michigan Pre-Seed Capital Fund is a quick, efficient and, most importantly, responsive tool for Michigan's entrepreneurs."
The Michigan Pre-Seed Capital Fund, designed to create and retain highly valuable knowledge-based jobs in the state, has helped to retain 87 jobs. Companies that have received funding will add 300 new jobs to Michigan's economy in 2008 and an additional 300 in 2009.
"The Michigan Pre-Seed Capital Fund investment enabled us to close our seed round of $500,000," explained Mike Knox, chief executive officer of Lansing-based XG Sciences. "Without this investment, we would likely still be raising money and would not have made any significant progress on Company development."
Michigan Pre-Seed Capital Fund recipients, to date, and the city where they are located are:
-- XG Sciences, Inc., Lansing
-- Phrixus Pharmaceuticals, Ann Arbor
-- Hybra-Drive Systems, LLC, Deerfield
-- ParkingCarma, Flint
-- OTO Medicine, Ann Arbor
-- Pixel Velocity, Inc., Ann Arbor
-- SensiGen LLC, Ann Arbor
-- EADevices, Inc., Kalamazoo
-- MedElute, Inc., Kalamazoo
-- Danotek Motion Technologies, LLC, Ann Arbor
-- Saleztrack, Detroit
-- Compendia Bioscience, Inc., Ann Arbor
-- Avidimer Therapeutics, Inc., Ann Arbor
-- RazorThreat, Royal Oak
Investments from the Michigan Pre-Seed Capital Fund are determined by the Fund's review board, which is comprised of 11 professional investors. Each SmartZone recommends and provides investors for the Fund's review board.
ABOUT ANN ARBOR SPARK
Ann Arbor SPARK, a non-profit organization, is the driving force in establishing the Ann Arbor region as a destination for business expansion, retention, and location by identifying and meeting the needs of business at every stage, from startups to large organizations. Ann Arbor SPARK represents all communities in the Washtenaw County. Ann Arbor SPARK collaborates with business, academic, government, and community investor partners including the University of Michigan, Eastern Michigan University, the Herbert and Grace Dow Foundation, Pfizer, Washtenaw County, the City of Ann Arbor, the Bank of Ann Arbor and the Michigan Economic Development Corporation. For more information, please call (734) 761-9317 or visit http://www.annarborspark.org/ .
CONTACT: Elizabeth Parkinson of Ann Arbor SPARK, +1-734-330-1383
Web site: http://www.annarborspark.org/
SOURCE Ann Arbor SPARK