Original Article by Tom Henderson | Crain’s Detroit Business


Accelerate Michigan competition delivers more than cash for winners
Accompanying Accelerate Michigan will be an invitation-only event on Thursday for chief investment officers, managers of pension funds and corporate investments, as well as CFOs.

Crain’s Detroit Business is hosting the event with Pensions & Investments, also owned by Crain Communications Inc., which will present an exclusive report on alternative investments. An investment manager panel will offer reactions.

Ken Mehlman, who is a partner with the private equity firm KKR, a former White House adviser and Republican National Committee chairman, will be the keynote speaker. Moderator will be Sam Valenti, president of Bloomfield Hills-based Valenti Capital Management LLC.

The event is sponsored by Quicken Loans Inc., the Michigan Economic Development Corp. and the Michigan Venture Capital Association.

For more information, contact Crain’s Deputy Managing Editor Dan Duggan: dduggan@crain.com or (313) 446-0414.

When the New Economy Initiative for Southeast Michigan decided to fund the Accelerate Michigan Innovation business plan competition two years ago, it wanted to offer enough money to change life for the winner.

Most such competitions offer modest prize money of a few thousand dollars and some recognition. Accelerate Michigan offers first-place money of $500,000 — enough to not only change the competitive landscape for the winner, but to also draw applications from companies around the country who are willing to move to Michigan if they win an award of that size.

The winner of the third annual competition, which will be announced Thursday night at Detroit’s Orchestra Hall, can only hope things work out as well as for last year’s winner, DeNovo Sciences LLC, a medical device startup based in the Michigan Life Science and Innovation Center in Plymouth Township.

CEO Kalyan Handique said the validation of winning last year’s award helped the company raise $1.75 million in additional seed funding, as well as a venture capital round of $6 million it plans to close on early next year.

The award also opened doors for potential customers, Handique said. Pharmaceutical companies and medical diagnostic companies, for example, have evaluated DeNovo’s prototype device, a microfluidic chip about an inch square that had shown in early tests it could capture cancer cells in blood samples for early disease detection.

“The Accelerate Michigan award has been very useful to us not only financially but it also has added to our credibility and spread the word of our existence,” said Handique.

“We were one of the earlier-stage companies to compete, and the award played a pivotal role in bringing in angel investors to fund our seed round. Though I was looking for only $1 million, the seed round was quickly oversubscribed.”

Handique, the three company founders, and a group of interns have handled product development so far, though the company plans to add two employees this month. One employee, Yi Zhou, was a researcher at Cornell University; the other, Kyle Gleason, was a systems engineer at Ann Arbor-based HandyLab Inc., Handique’s first startup company, which was sold in 2009 for $275 million.

This year’s third annual Accelerate Michigan Innovation competition will be held in Detroit Tuesday through Thursday, with an opening reception Tuesday night in the Guardian Building.

Starting with 300 applications, the field was winnowed to 53 semifinalists in September. That smaller group will make pitches to a panel of more than 40 angel and venture capital investors Wednesday and Thursday at the Westin Book Cadillac.

The point of having so many judges is a way for even the losers to get the word out on their companies to potential future investors with whom they otherwise might have had a tough time getting meetings. They might not win awards at Accelerate Michigan, but that doesn’t mean one of the venture capitalists or angels won’t want to make an investment later.

After Quicken Loans Inc. founder Dan Gilbert is named winner of the Spirit of Michigan Award at Orchestra Hall, the business plan winners will be announced Thursday night.

The runner-up will get $150,000, with the winners in eight industry sectors getting $25,000 each. The sectors are advanced materials, advanced transportation, alternative energy, information technology, life science, medical devices, next-generation manufacturing, and products and services.

There is also a top prize of $25,000 for a business plan open to college students.

Last year’s winner was Are You a Human LLC, a company formed by students at the University of Michigan, which subsequently obtained funding from Detroit Venture Partners and is now based in the Madison Building in downtown Detroit.

The company develops simple games that companies use to verify whether website visitors are human or automated programs, replacing the “captchas” that many find so irritating.

Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

Accompanying Accelerate Michigan will be an invitation-only event on Thursday for chief investment officers, managers of pension funds and corporate investments, as well as CFOs.

Crain’s Detroit Business is hosting the event with Pensions & Investments, also owned by Crain Communications Inc., which will present an exclusive report on alternative investments. An investment manager panel will offer reactions.

Ken Mehlman, who is a partner with the private equity firm KKR, a former White House adviser and Republican National Committee chairman, will be the keynote speaker. Moderator will be Sam Valenti, president of Bloomfield Hills-based Valenti Capital Management LLC.

The event is sponsored by Quicken Loans Inc., the Michigan Economic Development Corp. and the Michigan Venture Capital Association.

For more information, contact Crain’s Deputy Managing Editor Dan Duggan: dduggan@crain.com or (313) 446-0414.