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C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 2 5 , 2 0 1 6
Schooling startups UM business class aims to help 15 tech companies take off By Tom Henderson thenderson@crain.com
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David Brophy, a finance professor at the University of Michigan, wants to take 15 early-stage tech companies to school in the prestigious Ross School of Business, and it won’t cost them a penny. Company founders will gather for three hours each Wednesday night during the fall term, which runs from Sept. 7 to Dec. 14. Each week they will meet with teams of business school students, local successful entrepreneurs and venture capital mentors to hone their business models, plan their marketing, improve their pitches, and, in some cases, end up with new investors. The course is titled Financing Technology Startups: A Venture Capital Practicum. The venture capitalists are split among 25 who are based in Ann Arbor, who attend classes in person, and 20 in Silicon Valley, who participate by Skype or GoToMeeting. Ann Arbor-based Neurable Inc. is an example of how the class can pay off, literally. The company, a spinoff from UM, has created a patent-pending, noninvasive brain/ computer interface that, thanks to artificial intelligence software developed by founder, President and CEO Ramses Alcaide, allows people to control objects with their brain activity. With a few minutes of coaching, they can operate computer games, wheelchairs and, for a demonstration on the Discovery TV network, even a full-sized car in real time. Alcaide took the class last fall. Among the class’ mentors was Robert Winter, a Silicon Valley-based venture capitalist who is also the managing member of Houston-based OWL Investment Group, which is made up of 40 angel investors nationwide. Winter is also a judge at the Rice University business plan competition in Houston. In April, Neurable finished second at the competition, winning a commitment at the time of at least $50,000, which soon grew
“I don’t want something that’s a gleam in the eye or a pointy-headed professor’s hot idea. I’ve had enough of those.” David Brophy, University of Michigan
to $285,000 as more members of the investment group wrote checks. Of the 150 startups that have participated in the course’s 11-year history, Brophy, the director of the Center for Venture Capital and Private Equity Finance at Ross, said 30 got funding as a direct result. Other companies that have gone on to be funded include Brighton-based FlexDex Inc., a maker of tools for minimally invasive surgery that announced last week that it had closed on a funding round of $5 million; Genomenon Inc., a UM spinoff focused on personalized medicine through genome interpretation software, which raised a seed round of almost $1 million last year and won $100,000 as runner-up at last November’s Accelerate Michigan Innovation competition; and ContentOro LLC, an Ann Arbor company that sells content from books to websites and which raised a seed round of $550,000 last August. “I want companies with proven technologies. They have to have stuff that works that is IP protected,” said Brophy, referring to protections for intellectual property such as patents granted or applied for. “And it’s technology that’s being utilized, whether it’s in pilots or early sales. “I don’t want something that’s a gleam in the eye or a pointy-headed professor’s hot idea. I’ve had enough of those,” he said. And he said he didn’t want those who think the class will be easy. “There will be a hell of a lot of brain and brawn to be done, a lot of hard work to do to get ready for serious investors.” Recently, the Michigan Economic Development Corp. released a 73page report on how the 21st Centu-
ry Jobs Trust Fund has done at diversifying the state’s economy. One result was an ongoing disconnect between research universities and the private sector, in a variety of metrics. For 36 years, Brophy has been trying to bridge that gap. In 1980, he hosted a seminar on the UM campus bringing emerging growth companies together with would be investors. “I thought we’d do it for two or three years, and that would be the end of it,” he said. Instead, what is now called the Michigan Growth Capital Symposium has grown into one of the largest and most emulated pitch events in the U.S., with investors flying in from around the country each May to hear Midwest companies make their case for investments. At the end of the fall class, companies will have their own pitch event. There is another point to the class, said Brophy. It introduces those with growing companies to eager, smart business students they might want to hire as they get funded and grow faster. “I want to help stop the brain drain, and you can’t do it by putting a ball and chain around an ankle,” said Brophy. “But you can do it by having a company fall in love with a student. I know it’s only ones and twos, but it’s what we need to do.” In fact, Michael Thompson, who is now the head of business development at Neurable, was one of the Ross students last year helping Alcaide hone his skills, and got hired as a result. Tom Henderson: (313) 446-0337 Twitter: @tomhenderson2
Crain’s event to focus on food economy Behind Michigan’s food story is a business story. The food economy is one of untapped growth potential. At Crain’s Food Summit, key players from local food companies will gather to focus on building Michigan’s supply chain and pairing ideas with the visions from major national food companies. The summit will connect entrepreneurs, farmers, manufacturers, distributors, retailers, growers and processors to potential customers
and those interested in learning more about our food ecosystem. Investors will be introduced to food entrepreneurs from around the state in an effort to showcase the investment-worthy companies. The program includes a keynote panel featuring Jeff Dunn, president of Campbell Fresh, along with breakout sessions on how the local food movement is impacting agriculture, processing, distribution, and retail and restaurants.
There will also be a local food truck rally. The event runs from 2-7 p.m. Aug. 22 at Eastern Market in Detroit. Individual tickets are $80, and groups of 10 or more are $75 each. A discount combo ticket with the Live Love Local event is available for $100. Registration closes Aug. 18. To register, go to CrainsDetroit. com/events. Questions can be directed to Kacey Anderson at cdbevents@crain.com.