Advanced Battery Concepts has come a long way since 2008 when Ed Shaffer II and his wife bootstrapped the entrepreneurial enterprise in their garage using money from his 401(k) retirement savings account. Over time, the company has tapped an array of entrepreneurial resources available in Michigan to help accelerate product development and attract investment. Recently, it completed a restructuring of its business model that will bolster fundraising and build a pipeline of profitability.
The company’s proprietary bi-polar GreenSeal battery technology is engineered to enhance the performance of existing lead-acid battery designs while lowering the production costs and material content. In an energy-hungry world, Advance Battery Concepts’ product is well-positioned to meet the growing demand for storage and battery development arising from renewable energy, e-bike growth in Asia and advanced-vehicle technologies, such as hybrid and stop/start vehicles.
“We’re taking a known chemistry and using manufacturing processes and product-design rules to improve performance,” Shaffer says. “We are cognizant of adoption costs and time, so we have designed our battery technology to work in existing applications.”
Advanced Battery Concepts won first place in the 2009 Great Lakes Entrepreneur’s Quest business plan competition and $25,000 in prize money, which allowed it to move into the MidMichigan Innovation Center in Midland, Mich., and to secure its first seed round of financing led by the BlueWater Angels. Two years later, Shaffer opened up an A-1 round of financing to attract additional grant money and angel capital, which was used to accelerate engineering development of the GreenSeal technology. The additional funding also enabled the company to move to a small commercial facility in Clare, Mich.
In 2013, Advanced Battery Concepts was approached by a company that asked it to scale up its battery production quickly. “We tried to meet that production goal, but we were too small a facility,” Shaffer explains. “So, we restructured the company to focus on licensing our GreenSeal technology to other battery makers rather than capitalizing our own facility and building our own huge manufacturing plant. Our technology leverages 80 percent of the existing capital in a conventional lead-acid battery manufacturing facility, so companies don’t have to green-field a completely new production line to make our product.”
With its new business model in place, Advanced Battery Concepts has installed a small pilot line to demonstrate all of the unit operations and to build a limited number of full-scale batteries for distribution to potential licensees. The batteries also have passed industry-standard testing, which has confirmed their performance quality as lower-cost, higher-performance products versus conventional lead-acid batteries. “We’re getting good traction by producing real-size big batteries with a scalable operation in our Clare facility and fielding them at independent test houses, where data show they meet above-industry standards and have formats that can be easily adopted,” Shaffer explains.
In June, Advanced Battery Concepts opened a $3 million A-2 follow-on round of financing and Shaffer made a formal pitch to investors at the Michigan Growth Capital Symposium. Since then, the company has closed on $2.5 million of angel investment, initiated discussions with several potential licensees and aggressively pursued the possibility of an early exit via acquisition.
“I’ve appeared at the MGCS several times and have found it provides excellent exposure to venture capital investors in the state,” Shaffer says. “I’m happy to be an entrepreneur here in Michigan.”