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Draper Triangle Ventures aims to open Detroit office

Draper Triangle Ventures is expanding its investment strategy to including Michigan and the Pittsburgh-based VC has its eyes set squarely on downtown Detroit.

The venture capital firm specializes in making early stage investments in tech startups, think young software and IT companies. It sees a number of its future targets coming from the emerging technology hub in downtown Detroit, specifically the M@dison Block, and plans to open an office there to be close to the action.

"There are a dozen companies, maybe more, that are very interesting and worth taking a look at," says Jonathan Murray, managing director of Draper Triangle Ventures.

Draper Triangle Ventures plans to open two small satellite offices in Michigan, one in downtown Detroit and the other in Ann Arbor. Murray will serve as the man on the ground in Michigan manning those two offices. He says Draper Triangle Ventures focused on those two areas because they both target rich environments for technology investors.

"Technology deal flow tends to originate in large metropolitan areas," Murray says.

Draper Triangle Ventures is raising a $100 million investment fund, of which it has commitments for $75 million. The firm plans to make 1-2 investments in a startup each year. Those investments are expected to be in the $1 million range. The firm is also deep into doing due diligence into one local startup and Murray is optimistic that an investment announcement could be made within the next few months.

Source: Jonathan Murray, managing director of Draper Triangle Ventures
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Challenge Detroit begins recruiting for 2014 cohort

Challenge Detroit is now taking applications for its third class of fellows, but also has some interesting statistics to show off from its first class.

Challenge Detroit is a talent/retention initiative that pairs recent college graduates with employers. The year-long program also provides the fellows with a housing stipend to live in the city and opportunities to volunteer and become involved in the city.

Challenge Detroit takes in about 30 fellows each year starting with its first class in 2012. Of those fellows in the first class, 90 percent stayed in the region. A vast majority of them also kept working with their host employer after the fellowship was up.

"We're hoping for similar events coming out of year two," says Deirdre Green Grove, executive director of Challenge Detroit. "We're really excited about our first year’s impact."

That first class of fellows has also proven to have some aspiring business people. Five of the fellows from the first class have started their own business or are in the process of doing. Among those ventures are FYOUNK Clothing, which just opened a retail location in downtown Royal Oak, and Zoom Detroit Studios, a videography and animation firm.

"We weren't trying to start an entrepreneur incubator but we definitely had some entrepreneurial individuals," Green Grove says.

Applications for the 2014 class of Challenge Detroit fellows can be found here. Applications are due by March 9. The new class of fellows will launch in September.

Source: Deirdre Green Grove, executive director of Challenge Detroit
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Fathead adds a couple dozen hires in downtown

Patrick McInnis isn't gun-shy about hiring someone at Fathead. The poster-decal firm has two open positions for sales professionals and the company would be ready to take a shot on good candidates even if those jobs weren't on the table.

"If we come across a good candidate we will pull the trigger," says Patrick McInnis, CEO of Fathead. "That is a revenue opportunity for us."

The downtown Detroit-based firm, it calls the Compuware Building home, has taken a lot of shots over the last year, hiring 25 people. Those jobs include sales, operations, marketing and customer service. It now has a staff of 100 employees and half a dozen interns. The number of interns expands to 20 over the summer.

Those hires go with Fathead's increasing growth. Its revenue is up 35 percent last year, making 2013 its best year so far.

"We are expecting to grow another 30-35 percent this year," McInnis says. "We're definitely a company on the rise."

The 8-year-old company got its start making poster-size decals of famous athletes that adhere to walls. It was acquired by Dan Gilbert and is now a member of the Quicken Loans family of companies.

Fathead has grown its product portfolio over that time. It now offers jumbo-sized wall art for commercial buyers, such as ceiling to floor decals for major universities, like the University of Michigan and Miami (of Ohio) University, to name a few. One of its new products is Fashion Fat Dots, which are small stickers that go on the navigation buttons of iPhones and other mobile devices.

Fathead also is moving into the home decor arena. It now offers products that are similar to customizable wallpaper. For instance, renters who can't paint walls can order a piece of vinyl in any color they want. That way the renter's room is customized to their wants and they don't have to worry about losing any of their damage deposit when they take the piece of vinyl down.

"We're going to continue to expand that product line," McInnis says.

Fathead is also planning to expand its traditional product portfolio in 2014. The company wants to add more licenses for non-sports celebrities for their original-style wall decals. Last year Fathead nailed down the image rights for One Direction and it wants to bring in more celebrities that resonate with teens and tweens.

"The up-and-coming kid bands are a big focus for us this year," McInnis says.

Source: Patrick McInnis, CEO of Fathead
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Edibles Rex grows staff, scores Mission Main St Grant

Edibles Rex is both hiring and locking down new money, including six figures from a Mission Main Street Grant.

The 21-year-old firm is based in the Warren-Connor neighborhood on Detroit’s east side. It specializes in catering and wholesale food preparation service. Think making the meals that are used in school cafeterias.

Edibles Rex services a number of large corporations and schools. The company has watched its revenue jump 5 percent over the last year as the demand for federally subsidized school meals has spiked. It also worked on a summer meals program last year to bring more healthy food for children in economically challenged neighborhoods by service free lunches at recreation centers, churches and parks.

"We served probably 3,500 meals a day this summer," says Tammy Tedesco, president & CEO of Edibles Rex.

That growth has allowed Edibles Rex to hire 10 people over the last year, expanding the firm's staff to 90 employees and the occasional summer intern. The new hires filled open positions for upper management, food preparation and school lunch servers.

Edibles Rex also scored a $250,000 grant from the Mission Main Street program this year. That money will go toward the renovation costs of a new building Edibles Rex acquired near Eastern Market. Edibles Rex expects to spend $2 million renovating the structure later this year. It has already raised about 75 percent of that number.

Source: Tammy Tedesco, president & CEO of Edibles Rex
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Henry Ford Innovations receives $3M from Davidson Foundation

The Henry Ford Innovation Institute, the intellectual property incubator for Henry Ford Health System, has received a $3 million grant from the William Davidson Foundation aimed at expanding the hospital's entrepreneurial activity and educational outreach.

"This grant will allow us to start new programs and augment some programs we already have," says Dr. Scott Dulchavsky, CEO of the Henry Ford Innovation Institute.

The three-year grant establishes the William Davidson Center for Entrepreneurs in Digital Health. The center will help enable turning more of the healthcare innovations developed at Henry Ford Health System into commercially viable products.

Among the programs it plans to start is the Davidson Entrepreneurs in Residence, which will put about a dozen entrepreneurs to work in Henry Ford Innovation Institute helping commercialize new technologies. The Davidson Center will also help foster more collaboration between innovators, educators, and corporate partners to create new technologies, such as digital applications and platforms.

The $3 million grant will also help augment Henry Ford Health System’s education outreach programs. That includes helping fund and promote events about healthcare for everyone from middle school students to physicians' groups.

"We have a pretty robust plan in place for educating folks in the region," Dr. Dulchavsky says.

Source: Dr. Scott Dulchavsky, CEO of Henry Ford Innovation Institute
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

AutoHarvest aims to foster more IP collaboration

AutoHarvest is creating a new Internet platform that not only promises to make the purchase of intellectual property easier but will also open up innovation hubs in the automotive industry to more collaboration.

The 3-year-old nonprofit aims to foster collaboration and innovation in the auto industry by making things like tech labs and intellectual property more accessible. AutoHarvest has offices at the University of Michigan and TechTown. It has a team of six people after adding two more over the last year.

AutoHarvest has spent the last year and change developing a new software platform that it hopes will serve as a Amazon.com of intellectual property innovation. The online bazaar will allow inventors, entrepreneurs, businesses and institutions to buy, sell and collaborate on technology. It's currently in Beta-version and is aiming for a June release.

"There are several key communication features that need to be added," says Jayson Pankin, president & CEO of AutoHarvest. "We are in major bug-hunting mode."

Among the features in line for addition are the ability to broadcast the website in eight different languages, including Chinese, Japanese, Korean, Russian, French and German.

"We have companies from France and Germany that use our network now," Pankin says. "This will help them."

AutoHarvest is also looking to add an "Innovation Hub" tab to the site that will allow local research institutions to open up their labs and databases to the public. For instance, TARDEC (the U.S. Army's Tank Automotive Research, Development and Engineering Center in Warren) will make 70 of its laboratories open to the public that follows specific guidelines. The idea is to make the resources of big organizations available to startups.

"This way small companies can have access to software and databases they wouldn't otherwise," Pankin says.

Source: Jayson Pankin, president & CEO of AutoHarvest
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Locqus mobile app helps small biz manage assets

A new startup hatching out of the M@dison block in downtown Detroit is debuting a software platform focused on helping small firms keep track of their assets and the back-end of their business.

Locqus' first mobile app, Field Manage, helps small service businesses (think skilled trade contractors and mom-and-pop shops like exterminators) track and manage time clocks, scheduling, service times, inventory, quotes, payroll and invoices. It synchronizes most aspects of running a business between devices and employees without the need of separate software packages, so the software platform can be run from the firm's desktop and connect with its employees personal mobile devices. Field Manage can work on iOS, Andriod and other software platforms.

"Most small businesses aren't interested in buying Android or iPhones for their employees," says Sandy Kronenberg, principal of Locqus. "We needed to support them in that way."

The 1-year-old firm employs nine people who work out of the co-working space of Bizdom at 1528 Woodward.

"Where else would I like to be other than in an environment of a bunch of young peole trying to build up companies?" Kronenberg says.

Locqus is offering Field Manage for free. It hoped to have 50 firms use the app within its first month after release. It went live early this year. So far 60 companies have downloaded it. Locqus makes money by having a Square-like creditcard mechanism built into the app. Field Manage also offers small lines of credit to the firms that use it, making it easier and cheaper to borrow money to grow their business.

"We can determine their creditworthiness better than any bank," Kronenberg says.

Source: Sandy Kronenberg, principal of Locqus
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Berg Muirhead expands team, number of Detroit projects

Berg Muirhead and Associates has carved out its niche providing public relations and marketing services to a who's who of Detroit’s organizations and projects. That has only grown over the last year.

Among its current portfolio of clients include the Downtown Detroit Partnership, Education Achievement Authority of Michigan, Strategic Staffing Solutions, The Somerset Collection and the Grand Hotel. Its new customers include Detroit Future City and the Public Lighting Authority of Detroit.

"We have a broad range of clients but our sweet spot is in city projects that move the city forward," says Peter Van Dyke, partner at Berg Muirhead and Associates.

The 15-year-old firm has added to its staff to help handle this increased workload. It has hired a new account executive and added an independent contractor. The company now has a staff of seven employees, one independent contractor and the occasional intern.

Van Dyke expects his growing staff to help the firm’s current roster of clients adapt to Detroit’s changing landscape. That includes helping them smoothly transition their relationships to city's new mayoral administration, members of city council and the city's emergency manager.

"Our goal is to continue to keep these accounts moving forward," Van Dyke says.

Source: Pete Van Dyke, partner at Berg Muirhead and Associates
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

H2bid set to raise $1.5M seed capital round

H2bid is working toward raising a round of seed capital worth $1.5 million that will help the 8-year-old startup grow its service offerings and hire more staff.

The Midtown-based startup's software helps water utilities bid out projects over the Internet, enabling them to strike the best deal in the most cost-effective manner. Over the last year it has turned into more of a data-and-analytics firm.

"We're helping water vendors and contractors make smarter decisions in the bidding process," says Glenn Oliver, president & CEO of H2bid.

H2bid employs about 15 people. It is looking to add people in three areas: a senior-level marketing professional with digital marketing experience, a data analytics research manager, and people with B2B telephone sales experience. H2bid plans to leverage its team to finish developing a data analytics offering, which it plans to market as software as a service. It is also offering a lead-generation service for its customers.

Oliver hopes to finish developing these services by the second quarter of this year. He is currently raising $1.5 million in seed capital to finish the development of those services and add more people to his team.

Source: Glenn Oliver, president & CEO of H2bid
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

TechTown takes applications for 2014 startup programs

Aspiring entrepreneurs looking for their place in Detroit's emerging startup ecosystem have a chance to claim it in TechTown this year. The small business accelerator is taking applications for its Labs Venture Accelerator and DTX Launch Detroit program for 2014.

"There are all kinds of programs right now," says Leslie Smith, president & CEO of TechTown.

The DTX Launch Detroit program is more of a talent-retention program, focused on college students and recent grads. The 10-week program helps young adults (two-or-three-person teams) take their ideas for a startup to actual launch. Each participant receives a $2,500 stipend.

The Venture Accelerator program is a bit more advanced, taking early stage tech startups and turning them into a market-ready business. The 12-week program also provides a pathway for the participating startups to enter into full-time incubation at TechTown.

The two programs expect to take about 50 startups team this year. The deadline for applying for each of these programs is early March. More information about DTX Launch Detroit can be found here and information on the Venture Accelerator can be found here.

These two programs are each 1-year-old. It has already had some measurable success, such as Sentinl. The startup is developing a high-tech gun control technology. It showed well at last year’s Accelerate Michigan Innovation Competition.

"That has really made some extraordinary strides," Smith says. "It's about to close on some seed funding."

TechTown has also launched its own co-working space, Junction 440, this year. It also plans to host a number of individual events to help build local startups this year.

Source: Leslie Smith, president & CEO of TechTown
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

LOVELAND Technologies previews Motor City Mapping

Evolution. It's becoming an increasingly important word in describing the Motor City Mapping project.

The ambitious initiative originally set out to produce a comprehensive list of all of Detroit's blighted properties. It quickly became an effort to catalogue each of the Motor City’s 400,000 properties. The database will contain pictures and the condition of each property in Detroit, regardless of whether it is blighted or in pristine shape, contains a building or is vacant land.

The Detroit Blight Removal Task Force sent 100 surveyors and 50 drivers out to start taking pictures and assessing the condition of each of the city’s properties. They are passing the halfway mark (200,000 properties) this week. That information is compiled and sorted by teams from Data Driven Detroit and LOVELAND Technologies in TechTown where they are being catalogued into a digital database that will be made public.

"It's WhyDontWeOwnThis-like in that it's an individual parcel map,” says Jerry Paffendorf, co-founder of LOVELAND Technologies. "It's kind of like a coloring book. When you survey something it goes from red to green in the microhood."

Paffendorf and his team launched WhyDontWeOwnThis.com a few years ago as a way to sort through the thousands of tax foreclosed properties in Detroit. The website provided basic information about the properties, such as year built and building size, while tracking the tax auction bidding and sales.

Motor City Mapping’s website promises to be similar, providing a picture of the property and an assessment of its condition. Other information, such as ownership and tax status, might also be available further down the line. Paffendorf makes sure to reinforce the idea that the creation of the website is sill in the development stage and the concept of what it will provide is evolving.

Paffendorf says he wants it to serve as "an overall picture of occupancy in the city." However, ensuring that it stays up to date and accurate means it will have a public interaction component. Local residents and stakeholders will have the ability to further elaborate on the condition of property and even update the property's photo.

"This is sort of the people’s property catalogue," Paffendorf says. "It recognizes that there is only so much information the city can collect."

That means if a property devolves from occupied to abandoned or fire damaged, the community will be able to track it or even be given a more comprehensive depiction of its condition than the original surveying team. On the other side of the coin, people who improve property will be able to update the website’s information to reflect that.

"It also records when things get better as well," Paffendorf says.

Paffendorf expects the survey work will finish up in February as long as the weather doesn’t get too extreme. Surveying teams were kept at bay in recent days because of the recent large snowfall and subzero temperatures. Paffendorf declined to estimate how long it will take to get Motor City Mapping’s website up and running because the development process is still evolving.

"We're still up to our eyeballs trying to get this survey done," Paffendorf says.

LOVELAND Technologies has grown its team to seven people over the last year, including three recent hires. The new hires include one software developer and two community planners. It is also looking to hire one more software developer.

Source: Jerry Paffendorf, co-founder of LOVELAND Technologies
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

6th Man Apps brings analytics to sports with mobile tech

Luke and Matt Geiger have been big basketball fans for about as long as the two young men have been alive.

The brothers weren't able to play organized ball much beyond high school and recreation leagues, so they built a mobile app dedicated to the sport they love.

"It's the next best thing," says Luke Geiger, CEO of 6th Man Apps. "Basketball is something we love to do."

Luke Geiger was one of the first developers with UpTo, a up-and-coming startup in the M@dison Building. He and his brother are looking to set up 6th Man Apps' 4-month-old shop in the Grand Circus co-working space. Its first app, HoopMetrics, uses advanced statistics and analytics to help coaches and teams maximize their lineups.

The startup describes the app that "identifies the players that don’t necessarily light up the stat sheet but when they are on the floor, good things happen." It breaks down "player performance beyond basic statistics" so it can pinpoint the team’s highest scorer and its most efficient scorer.

"We got a lot more in-depth with our statistics," Geiger says.

6th Man Apps launched HoopMetrics last summer, selling it for $60 a pop. It now claims about 750 teams using the app, including teams like the University of Detroit Mercy. The startup and its four-person team is now looking at expanding to other sports later this year, such as baseball.

Source: Luke Geiger, CEO of 6th Man Apps
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Groovebox Studios grows staff as it expands across U.S.

Jeff Wenzel is the co-owner of Groovebox Studios, a production company that helps bands crowdsource new audio and video content. The 3-year-old firm got its start from the Sugar People music project and everything it took to put that together.

"We learned that it takes a huge team of people to make a project go," Wenzel says. "So we picked up the pieces and started Groovebox Studios."

Groovebox Studios helps independent bands crowdsource money from their fans to make new music and videos. The first $1,200 raised goes toward Groovebox Studios' expenses to make the project work (think time for equipment and professional services) and anything crowd funded beyond that goes toward paying the band.

"We make our money on the production costs," Wenzel says. "The band gets its money and the fans get fresh content."

The production company is based in the Russell Industrial Center, which is on the city’s near east side next to Hamtramck. Groovebox Studios is currently working with Start Garden to grow the concept. It has opened satellite locations in Chicago and Chapel Hill and is looking at expanding to Atlanta, Columbus or Cincinnati.

The firm currently employs four staffers and seven independent contractors. It hired one person and all of the independent contractors over the last year.

Source: Jeff Wenzel, co-owner of Groovebox Studios
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Styleshack creates virtual showroom for local boutiques

Rachel Schostak sees a hole in the retail market, at least in its virtual world. It's why the recent Bizdom graduate started Styleshack.

The downtown Detroit-based startup provides the online infrastructure so local boutique stores can have an online presence. Styleshack also puts those boutiques in one central location so its easier for patrons to shop local stores.

"Wouldn't it be great to have one place to find local boutiques and local stores?" Schostak says. "It's your own virtual showroom. Each store has its own individual URL."

Schostak went to the Fashion Institute of Technology in New York City and worked in the fashion industry in New York and Chicago before returning to Metro Detroit to work with a local designer. She launched Styleshack to help connect local stores and designers with more local patrons.

Styleshack launched in late November with a little more than a dozen stores using the service, most of which are in Metro Detroit. "We plan to grow in the Midwest in the coming months," Schostak says.

Source: Rachel Schostak, founder of Styleshack
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

M@dison Building-based iRule acquires On Controls

To say 2013 was an eventful year for iRule might be a bit of an understatement. The entertainment technology startup scored a Series B investment round last spring, moved into the M@dison Building in November and acquired On Controls just before the end of the year.

"It's been a great 2013," says Itai Ben-Gal, CEO of iRule. "We're excited about this year."

The 4-year-old startup makes a cloud-based universal remote control system that can be operated from the user's mobile device. It acquired On Controls (which iRule has partnered with in the past) in December for an undisclosed amount. The Salt Lake City-based startup specializes in making a control-and-automation system for professional entertainment center dealers and installers. Downtown Detroit-based iRule plans to offer On Controls’ technology to dealers and continue selling its own technology to consumers.

"We got to a point where we wanted to bring that side of the sales in-house," Ben-Gal says. "We wanted to acquire that brand instead of starting one of our own."

Compuware Ventures made the first major investment in iRule, moving the startup into the Compuware Building shortly thereafter. Detroit Venture Partners led the $1 million Series B round last March. It moved into a bigger space in the M@dison Building, where Detroit Venture Partners is headquartered, in November to accommodate its new hires. Thirteen people now work at iRule after hiring six people over the last year. It is also looking to hire three people right now and another three in the second quarter of this year.

"We're looking to grow the team aggressively," Ben-Gal says. "We're looking for everyone from developers to sales guys."

Ben-Gal and Victor Nemirovsky launched the company as a side project from their living rooms in Farmington Hills. The partners (both home-entertainment-center enthusiasts) quickly created a niche for iRule’s technology with people who enjoy custom home entertainment centers. Last year, iRule started to sell its product to both everyday consumers and commercial customers, finding a high-growth ceiling with the latter.

"That has been a nice area of growth," Ben-Gal says. "Now we're working to aggressively grow the commercial side."

Source: Itai Ben-Gal, CEO of iRule
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.
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