U-M Professors Develop New Minimally Invasive Surgery Tech

By Jon Zemke

Wednesday, May 23, 2012

Minimally invasive surgery done with robotics isn’t as simple and cheap as it sounds. It’s a quandary the co-founders behind FlexDex are looking to help solve with their new surgical technology.

The University of Michigan spin-out is developing a surgical tool that provides high dexterity, intuitive control and natural force feedback while emphasizing ergonomics and affordability. Its claim to fame is delivering enhanced functionality through a simple mechanical hand-held tool that is significantly more cost effective than the complex, multi-million dollar robotic tools that can work at a similar level of precision.

“FlexDex is a minimally invasive surgical technology that provides enhanced dexterity and surgical control at an affordable price,” says Shorya Awtar, who co-founded FlexDex with James Geiger.

The Ann Arbor-based start-up has recently hired a CEO to expand its staff to three people and is starting to raise seed capital to commercialize it technology. It has a prototype but is aiming to have a finished market prototype and begin clinical trials within the next year.

FlexDex recently pitched its technology at the Michigan Growth Capital Symposium. There its executive team also boasted that the new technology leads to less pain in patients, fewer infections and shorter hospital stays.

“The benefits to the patient are significant,” Awtar says.

31st Annual MGCS has Record Turnout

Thank you to all who came to support us at the 31^st annual Michigan Growth Capital Symposium.  We had a record turnout and some excellent presentations, including keynotes from Foundry Group’s Jason Mendelson, who is very optimistic about what’s happening in Michigan now, and Flagship Ventures’ Noubar Afeyan, who shared his thoughts on entrepreneuring.  For those who could not make the event—or for attendees who want to relive it—check out some of the press coverage about the event:

• MI Tech News, Michigan Entrepreneurial Environment Pointing Up, Financial Expert Contends, May 19, 2012
• Xconomy, VC Guru Mendelson on MI’s Entrepreneurial Ecosystem (And Why There’s Hope) , May 16, 2012
• Crain’s Detroit, State’s Nationally Known VC Showcase Grows from Modest Roots, May 13, 2012
• Concentrate, MI Growth Capital Symposium Leverages Tech from A2′s CrowdJuice, May 9, 2012

MGCS Panels Offer Insights from Industry Experts

The Michigan Growth Capital Symposium  (MGCS) offers  attendees the opportunity to learn from leading  industry experts on broad range of topics. With six sessions spanning two days,  the Symposium agenda appeals to investors and entrepreneurs alike.

IT Investing: Picking Firms to  Back – Why It’s Different, This Time
by Early Stage Partners

This panel will offer panelists’ proven expertise and advice for  choosing IT firms to invest in. It will also provide insight into how the  market has changed and what it means for investment strategies moving forward.  Topics to be covered include comparison of IT startups today versus in the .com  era, cloud computing and online infrastructure, and the evolving business model  of building businesses on top of existing platforms and websites.

Panelists: 

Dick Beedon,  Founder & Chief Advocacy Officer, Amplifinity
Jacob Cohen, Vice President, Detroit Venture Partners
Jonathan Murray, Managing Director, Early Stage Partners (Panelist/Moderator)

James Pavlik,  Partner, Baird Venture Partners

Geographic  Expansion of Your Venture Capital Fund: Opportunities, Challenges, and  Considerations 
by Venture Investors 

This panel will present a candid discussion based on the panelists’ experiences  in expanding their venture funds, and from observations of other funds efforts  to do the same. Topics will include fund raising, deal sourcing and investment,  and operational best practices. The panel will also address challenges such as  reduction in funding, weaker average VC returns, difficult exits, and  unpredictable/unreliable opportunities (specifically for life science  companies).

Panelists: 

Jim Adox, Managing Director, Venture Investors (Panelist/Moderator)
Keith Crandell, Co-founder and Managing Director, ARCH Venture Partners
Greg Madden, Portfolio Manager, SV Life Sciences
Brandon Park,  Principal, Credit Suisse

What Really  Goes on Behind the Scenes: Starting and Operating a Venture Capital Firm 
by Arboretum Ventures 

This panel will give entrepreneurs, angel investors and new venture capital  investors an opportunity to learn about the process of forming and operating a  venture capital firm. Panelists include experienced VCs from different parts of  the country (focusing on different industry sectors) that have played key roles  in the creation of their firms. Discussion will target two groups:  entrepreneurs (new and veteran), and junior venture professionals. Among the  topics to be discussed is a report issued by Silicon Valley finding that the VC  industry is contracting – but Michigan is bucking that trend.

Moderator: Tim  Petersen, Managing Director, Arboretum Ventures

Panelists: 

Blair Garrou, Managing Director, DFJ Mercury
Jason Rottenberg,  General Partner, Arsenal Venture Partners
Harry Wilcox,  CFO and Partner, Flagship Ventures

Funding the  Next Leg of Growth: Planning, Preparing and Completing a Growth Stage  Investment 
by Plymouth Management Company 

This panel will discuss how to best build the foundation for growth taking into  account the role of founders and early capital rounds, initial  commercialization success, and fine tuning the business model. In addition,  panelists will address how to identify and assess growth to accelerate the next  leg, as well as how to successfully seek venture capital funding for growth.  The panel will spotlight two Michigan early stage growth companies: Lynx  Network Group and Relume Technologies, Inc., offering insights from each  company’s leadership team and their lead VC investors.

Panelists: 

Christopher Barber, Co-Founder, Lynx Network Group
Jeff Bocan, Managing Director, Beringea

Mark Horne, Managing Partner, Plymouth Venture Partners II (Panelist/Moderator)
Crawford Lipsey, CEO, Relume Technologies, Inc.
Michael Wooldridge,  Partner, Varnum

U.S.  Medical Device Companies Trending to R&D Investments Abroad: How Venture  Capital Firms are Adapting 
by BioStar Ventures

This panel will discuss the current trend for medical device companies to  direct their investments in research and development, animal studies, clinical  trials and initial infrastructure outside the U.S. and the impact on the U.S.  venture capital sector. It will provide an in-depth look at how venture capital  firms are adapting and changing their strategies to these global marketplace  changes.

Moderator: Jeffrey  O’Donnell, Venture Partner, BioStar Ventures

Panelists: 

Steven Almany, MD, FACC, Director of Medical Innovation, William Beaumont  Hospital
Matthew Rieke, MD, Partner, Quaker BioVentures
Immanuel Thangaraj, Managing Director, Palo Alto, Essex Woodlands

Life  Sciences Investing: What Do Investors Want? 
by Pepper Hamilton and Baird  Venture Partners

Venture capitalists and venture-backed executives in the life sciences field  will discuss the who, what and where of today’s investment environment for  companies seeking venture capital, as well as possible funding trends for the  future.

Moderator: Michael B. Staebler, Partner, Pepper Hamilton LLP

Panelists: 

Matt Hermann, Senior Managing Director, Ascension Health Ventures
Jason Lettmann, Principal, Morgenthaler Ventures
Peter Shagory, Partner, Baird Venture Partners
Marc Singer, Managing Partner, Osage University Partners

Presentation Coaching Helps Nanocerox Hone Messaging for MGCS

Ann Arbor-based Nanocerox, an advanced materials company primarily serving the military and defense market, will present at this year’s Michigan Growth Capital Symposium (MGCS). Like all presenting companies, Nanocerox was given the opportunity to partake in presentation coaching through a partnership with the MGCS, the Michigan Small Business & Technology Development Center (MI-SBTDC) Technology Team and the New Enterprise Forum (NEF).

Nanocerox secured a series of investment rounds from 2003 to 2009, in addition to government grants and Small Business Innovation Research funding. The company had $2.7 million in revenue in 2011, and is seeking additional funding. CEO and President Michael Kelly said the MGCS presentation coaching helped him tell his company’s story. “[The] coaching provided a great environment to present and to receive proactive feedback, which allowed Nanocerox to adjust and streamline our overall company presentation,” he said. “Our approach is to outline that we have revenue. We have a proven technology, one that works and has specific markets and customers, plus we solve significant customer problems. We need additional capital to accelerate our growth.”

Nanocerox presented to two different coaching teams and received very different feedback points from each, which Kelly said provided excellent insight and helped him formulate and strategize his message:

• Identify the customer’s problem
• Explain how Nanocerox can solve this problem
• Note that Nanocerox has revenue and customers – a valuable strength and differentiator
• Outline the company’s strategy moving forward

In addition to the coaching sessions, the Nanocerox leadership team has had discussions with board members and key employees as well as mentor CEOs who provided feedback, recommendations and “war stories”. The have also reviewed past MGCS presentations.

In the approach to this year’s Symposium, Kelly has a clear objective. “Our anticipation with the MGCS event is that materials companies are not glamorous; [they are] usually very hands-off to VC firms. Our goal is to change this mindset.”

InvestMichigan Mezzanine Fund Boosts Michigan’s Appeal to Entrepreneurs and Investors

The InvestMichigan Mezzanine Fund is the latest in a series of InvestMichigan funds focusing on growing a new generation of Michigan companies and generating strong returns for investors. Launched in July 2011 and co-managed by Credit Suisse and Beringea, the fund will invest $5 million to $15 million (up to $130 million) in a broad range of lower-middle-market Michigan companies, including those in the industrial manufacturing, business services, health care, technology, and consumer products sectors. “The program was formed in partnership with the SBA through its new Startup America SBIC Impact Investment Initiative,” said Beringea Senior Managing Director and Co-Founder Charles Rothstein. “Michigan was the first state to benefit from the initiative.” To date, the InvestMichigan Mezzanine Fund has invested in three companies: Dantom Systems, Inc., Huron, Inc., and a premier Mich.-based food distributor.

Beringea is the largest provider of venture and growth capital in Michigan. Headquartered in Farmington Hills, Michigan with an additional office in London, Beringea has more than 70 portfolio companies in the US and UK. “It’s important that the entire entrepreneurial community works to change the message that Michigan is a flyover state,” said Rothstein. He notes that the Michigan Growth Capital Symposium (MGCS) is helping to change that image. “The Symposium helps send a signal that Michigan is a place where technologies are commercialized, young companies can grow, and investors are receptive – which in turn attracts new entrepreneurs and resources to our state as momentum grows.”

Beringea is a long-time sponsor of the MGCS. “We believe in its mission of showcasing the best young companies in the Midwest,” Rothstein said. “We find great value in the exposure MGCS offers us to entrepreneurs that might otherwise have travelled under our radar, and in turn we’re able to share our funds’ investment strategies with a targeted audience.”

For more information on the InvestMichigan Mezzanine Fund, click here.

MEDC: MGCS a Valuable Link in Michigan’s Entrepreneurial Ecosystem

SouthIn the past decade alone, more than 300 companies have presented at the Michigan Growth Capital Symposium (MGCS). About 70% of these have raised capital totaling more than $1.7 billion in investments, and nearly 20% have realized successful exits. “The results from the MGCS speak for themselves,” said Michigan Economic Development Corporation (MEDC) Vice President of Business Acceleration Michael Psarouthakis. “We have great companies in the state that have an incredibly high success rate if they make the cut to present at MCGS, and the Symposium provides the best exposure for many Michigan companies to get in front of VCs.”

The MEDC works closely with entrepreneurial service organizations across the state to support the development of emerging companies. Psarouthakis notes that Michigan’s entrepreneurial infrastructure and environment is rapidly improving, making the state an excellent place to start or grow a company. Private sector capital resources are increasing, and the cost of doing business in Michigan is relatively low in comparison to much of the country. The state’s universities and talent are attracting national attention, and organizations such as Southwest Michigan First, The Right Place, Lakeshore Advantage, Ann Arbor SPARK, NextEnergy, and Tech Town are supporting startups statewide.

Psarouthakis said the MGCS has given Michigan companies vital exposure in the VC community. “MEDC is a proud and longstanding sponsor, and I expect will continue to be a sponsor so in the future,” he said. “Dr. David Brophy’s efforts over these many years have been an invaluable service to the State of Michigan.”

Young Basile: Michigan Startups Improving

According  to intellectual property law firm Young  Basile Hanlon & MacFarlane P.C., the  number and quality of startups in Michigan  is improving. The firm founded a not-for-profit incubator five years ago, and  at the time quality tenants were scarce. Shareholder attorney Andrew Basile,  Jr. notes that today there are more deals, and founders are more sophisticated  with better funding. To further leverage this momentum, he said, Detroit needs to become  more attractive to young talent. “We need vibrant, dense walkable towns and  cities that are assembled together in close proximity to each other and large  recreational open spaces,” he said. “The Woodward corridor is a start,  especially in the city where vast tracts of empty land could be turned into  parks.”

Young  Basile has offices in Ann Arbor and Troy, Michigan as well as  Palo Alto, California. About half of the firm’s legal  work stems from the West coast, so it has a unique perspective on how the Midwest is perceived nationally. “I think Michigan is making  progress but has long way to go,” said Basile. “People in Silicon   Valley will be impressed by results in the form of great companies  with substantial liquidity events. In the meantime, Michigan  should do a better job positioning itself in Silicon   Valley as a subject matter expert for vehicles. For example,  autonomous vehicles could revolutionize society over the next several decades. Silicon Valley is already on top of this and will  probably end up designing the next century’s transportation infrastructure.  Incredibly, Michigan  is hardly even in this game.” Michigan,  he adds, should be willingly and openly challenging the status quo and  embracing ideas that may seem impractical, but are at the cutting edge of  technology.

Basile  notes that events such as the Michigan Growth Capital Symposium  (MGCS) have  added value to Michigan’s  entrepreneurial eco-system, and the MGCS is “moving the needle”. Young Basile  is a sponsor of this year’s Symposium. “We enjoy meeting the founders and  investors. Some of our attorneys also are active angel investors,” said Basile.  “We are always on the look out for new clients.”

31st Annual Michigan Growth Capital Symposium Unveils List of Presenting Companies

Today organizers of the 31st annual Michigan Growth Capital Symposiumannounced the 32 companies that will be presenting at the event, taking place next week, May 15-16 at the Marriott Resort in Ypsilanti, Mich.  The companies, which are seeking $500,000 to $20 million in funding, have been selected through a thorough screening process of over 70 applicants and represent the most promising start ups from the greater Michigan region and beyond. In addition to company presentations, the program will be augmented by panel discussions, multiple networking opportunities and keynote presentations from Foundry Group’s Jason Mendelson and Flagship Ventures’ Noubar Afeyan.

The Symposium has long served as a critical agent in connecting early stage and emerging growth companies seeking funding to investors from across the nation prospecting deals. Since 2000 alone, more than 300 companies have presented at the Symposium and about 70% of those companies have gone on to raise capital totaling more than $1.7 billion in investments. Presenting companies not only receive access to potential investors as part of the process, but also receive expert coaching and preparation assistance ahead of the event, exhibit space on site and invaluable networking opportunities.

The companies presenting at this year’s Michigan Growth Capital Symposium represent industries such as life sciences, medical devices, healthcare IT, clean tech and information technology, among others. They are:

• 3D Biomatrix– technology company providing 3D cell culture plates and 3D cell matrices for life sciences research and drug discovery/testing applications
• Accio Energy – producers of wind energy systems which harvest energy by using the wind to move electrically charged particles against a voltage gradient
• Advanced Battery Concepts– a battery technology development company and makers of GreenSeal®, which generates significant cost and weight benefits for today’s lead acid batteries
• Alert Communications–  a refurbisher and wholesale distributor of mobile phones
• Algal Scientific–  providers of water treatment systems which reduce customer cost and provide clean water in the most environmentally sustainable manner
• Amplifinity, Inc.  – providers of short and long-term solutions for building brand advocacy
• Atterocor, Inc. – targets the treatment of adrenal disorders
• BioPhotonic Solutions, Inc. – early stage company and creators of  ultrafast laser technology
• Blaze Medical Devices, LLC– research and development company specializing in improved characterization and utilization of blood products
• Clean Emission Fluids– technology company that manufactures fuel blending and fluid dispensing solutions
• Coliant Corporation– makers of rugged electrical accessories that maximize the comfort, convenience and safety for motorcyclists
• Commuter Advertising– providers of active and entertaining audio advertising onboard public transit vehicles
• DeNovo Sciences, Inc.– providers of cutting-edge CTC detection technology for the cancer research and clinical markets
• ePack, Inc. – technology company bringing world-renowned expertise to help MEMS component companies bring new and exciting devices to market
• Epsilon Imaging Incorporated– creators of vendor-neutral visualization and analysis applications that enhance, standardize, and streamline interpretation and reporting of echocardiography
• Esperion Therapeutics– research company working to discover and develop therapies to prevent, treat, and reverse cardiovascular and metabolic diseases
• FlexDex LLC – makers of a new minimally invasive surgery (MIS) tool technology that provides high dexterity, intuitive control, and natural force feedback in an affordable and ergonomic design
• GANTEC Inc.– biotechnology company focused on delivering agriculture solutions for the 21st century
• HistoSonics, Inc. – makers of ultrasonic medical devices that non-invasively shrink swollen prostates and destroy cancer tumors
• Ideomed – providers of the innovative personalized managed health solution abriiz™ asthma management platform
• LogiCoul Solutions LLC– developers of a unique, proprietary, patent-pending technology called Interfacial Process Stimulation (“IPS”)
• Mackinac Technology-  technology company that develops and commercializes energy saving thermal insulation products
• Monarch Antenna– makers of the  patented Self-Structuring Antenna (SSA) which improves the reliability of the wireless link
• Nanocerox, Inc. – the world’s leading producer of high-purity ceramic nanopowders
• NeuWave Medical– technology company that develops tools that deliver energy to the human body to treat a variety of serious medical conditions
• NRG Dynamix – developers of a hydraulic hybrid power train (HHPT) for the light and medium truck markets
• Phenometrics Inc.– providers of tools to help increase the photosynthetic efficiency of plants for food, pharmaceuticals and fuel
• Premium Compost Company– designers of turn-key solutions for commercial organic waste recycling programs
• Swift Biosciences Inc.– developers of enabling technologies for genomics and personalized medicine
• Vestaron Corporation– developers of a new generation of insecticides derived from peptides produced by spiders
• Wellfount Cororation– providers of continuous innovation, world-class operations and point-of-care solutions, all in partnership with leading long-term care facilities
• Woodward Asset Capital – providers of custom, tailored solutions for private and institutional asset owners

Michigan Seeing More Home-Grown Second-Stage Companies

Michigan has seen several successful homegrown harvests in recent years, such as those of HealthMedia Solutions and HandyLab, Inc. 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 state is increasingly seeing emerging growth companies enter the second stage. “The banks have been very difficult with respect to available credit,” he said. “So what we’re now seeing is that some of our venture funds are beginning to look at these later stage companies as very good candidates for equity capital.”

Brophy notes that in past years the Michigan market was dependent on out-of-state sources, and syndicate investing was unusual. Now, however, more venture funds are working together, and the amount of capital available for investment is increasing. “One of the issues has always been that we would seed the companies here in Michigan, and then the big boys from California or New York would swoop in and do the B round. Then the company moves,” said Brophy. “The best defense against that is to have a vibrant local venture capital market capable of sending up –  participating in, if not totally providing – that subsequent round of funding. We’re more and more capable of seeing a deal further down the road than we used to be able to – maybe a second or third round of funding. And that is a real key strength in the marketplace.”

This year’s MGCS will reflect this industry growth and evolution. “One of the things we’re going to do at this year’s Symposium is have a panel that addresses these developments, and look to some of those kinds of companies as we’re seeking candidates for presentation,” Brophy said.

OPS Solutions Lands Multi-National Customers from Southeast Michigan

Last year was a good year for Northville, Michigan-based OPS Solutions. The company, which offers a patented light-based system to improve quality control, error proofing, training, productivity, and product variation expansion, added major customers such as General Motors, Chrysler, John Deere, Detroit Diesel and Case New Holland. President Paul Ryznar said the company’s location is ideal. “We have very good access into a huge customer base through a lot of multi-national companies that are headquartered in this area,” he said. “We always say we’re very fortunate to be within 45 minutes to an hour drive time to a meeting with a potential customers that could help us implement systems around the world very easily based out of Southeast Michigan.”

Ryznar advises other small business owners to take full advantage of the wealth of resources available to their companies. “You’ve got to seek out the answers you’re looking for from the right companies and organizations,” he said. OPS has successfully partnered with Commerce Connect, a program of the U.S. Department of Commerce that aims to assist businesses at every point of their life cycle.

The company also presented at last year’s Michigan Growth Capital Symposium (MGCS). “The Michigan Growth Capital Symposium was very good exposure for us,” Ryznar said. “We did the presentation and got a lot of good feedback. We actually did get one request from one VC that was interested in investing.”