News

ReapSo launched its customer loyalty app last week. The start-up is initially focusing on Apple users in the downtown Royal Oak market.

The Farmington Hills-based company and its team of three people have created a mobile app that helps local businesses increase sales using things like traditional customer loyalty rewards programs, newer technology like QR codes and gamification techniques to keep customers engaged. The app also takes care to protect customer's privacy and makes it easy for merchants to use by making sign-ups free and easy.

"We get paid from our merchants when a user comes in and pays for a product," says Steve Valentine, co-founder of ReapSo. "There is no risk. There is no long-term contract for them to sign."

ReapSo has signed up 30 merchants in Royal Oak, mostly restaurants and bars in downtown. The start-up's market research shows that about 60 percent of people who frequent downtown Royal Oak use Apple products. The focus on eateries aims to leverage the frequency of spending money on food and drink in the city's center.

"I might not buy a shirt everyday, but I am eating everyday," Valentine says.

Source: Steve Valentine, co-founder of ReapSo
Writer: Jon Zemke

Lotus Bank will open its second branch in Farmington Hills later this month, a move that will help the Novi-based bank expand its staff by seven people in 2013.

"We needed more retail locations and space from a personnel standpoint," says Neal Searle, president & CEO of Lotus Bank.

The 6-year-old bank has hired three people in the last 30 days and now employs 18. Another four employees will be added to the payroll when the Farmington Hills branch opens within two weeks.

Lotus Bank is a full-service bank with $82 million in assets and $71 million in deposits. It grew by 17 percent in 2012 and expects to continue expanding its reach in Metro Detroit this year. The bank, which is 80-percent owned by Indian-Americans, has a five-year strategic plan of opening one new branch annually and its sights are set on suburbs like Troy, which has a large Indian-American population, in the near term.

"This is an opportunity to take it to the next level," Searle says.

Source: Neal Searle, president & CEO of Lotus Bank
Writer: Jon Zemke

Lisette Poletes remembers her mother, Hortensia Albertini, working at their kitchen table to build a business. That was in the 1980s and little did they know the single mom would create a multi-million-dollar company called Global LT.

"It's something I saw my entire life growing up," Poletes says.

Poletes came on board in 2009 and started running the day-to-day operations. She has now bought the entire company, giving her mother the opportunity to retire and keep the business in the family and growing.

Global LT specializes in language services, cultural training, expatriate destination services, and workforce training courses for international locales. If it has something to do with facilitating international business, the Troy-based business probably offers a solution for it.

The company has gone from generating $9 million in revenues in 2009 to $20 million in revenues today. It employs more than 100 staff and three interns after hiring 19 people in the last year. It currently has six openings. The company also has about 1,500 to 2,000 independent contractors abroad at any given time.

"I give credit to the team," Poletes says. "They are why we doubled the size of the company."

She expects to keep growing the company for the foreseeable future and to expand more into government work. Language training will remain a mainstay in the company's bottom line. Poletes also expect to keep hiring to meet the work demand.

"A lot of times we promote from within," Poletes says. "We hire a lot of interns."

Source: Lisette Poletes, CEO & owner of Global LT
Writer: Jon Zemke

Midtown Detroit's Great Lakes Coffee Roasting Company is finishing up its first week as a coffee bar in a third location, this one in Lake Orion.

After the original in Detroit came one inside Bloomfield's Maple Theater. Its newest is inside Kensington Church on South Lapeer Road. It opened Jan. 30 and is serving up its special blends, fresh-roasted nearby.

It has a drive through and also serves swirlberry frozen yogurt and local products, such as pastries from Love & Buttercream in Royal Oak.

Besides adding physical locations, the company's online store is growing as well.

Writer: Kim North Shine
Source: Great Lakes Coffee Roasting Co.

Billhighway's expansion continued through 2012 as the Troy-based tech firm hired more than a dozen people and continued to add more employees in the first month of this year.

The 13-year-old company hired 15 people in 2012 for a broad range of jobs, including software development, sales and accounting. It recently hired a new sales engineer and a company team player that handles things like event coordination. Sources declined to name a specific number of employees but said the total number is between 50-100 people.

"We continue to hire people," says John Schelske, COO of Billhighway. "We have brought people in from a couple of different areas. It's a pretty diverse range."

Billhighway got its start when its founder, Vince Thomas, was trying to divide bills between himself and friends while attending Eastern Michigan University. He created software that now helps organizations allocate expenses for everything from dues to dinner costs.

"We have grown through both organic growth through existing clients and some new clients as well," Schelske says.

One of the drivers of that growth is a product that includes payment processing, online banking and financial accounting. It has proven to be popular with non-profits and membership organizations, Schelske adds.

Source: John Schelske, COO of Billhighway
Writer: Jon Zemke

Out-of-state venture capital firm Flagship Ventures is close to signing a lease for a office in downtown Ann Arbor and expects to open its doors later this month.

The Massachusetts-based VC hired a recent graduate from the University of Michigan Ross School of Business to head up the office. Flagship Ventures was one of the investors in Accuri Cytometers, an Ann Arbor-based start-up recently acquired for nearly $300 million, and is looking to duplicate that success with similar investments in the local healthcare arena.

To make that happen it has hired Dr. Michael Johnson, a recent MBA graduate from U-M and fellow at the university's Medical Innovation Center. He helped co-found Converge Medical Technologies last year and has worked extensively with venture capital at the Ross School of Business.

"I had the background in what they wanted to do and I was on the ground here," Dr. Johnson says. "I had already worked at the Wolverine Venture Fund. It was a great fit a lot of reasons."

Flagship Ventures has received investments from the Venture Michigan Fund II and the Renaissance Venture Capital Fund. It has an active investment in Tangent Medical Technologies and is looking to make more investments in local start-ups this year. Dr. Johnson points out that Flagship Ventures specializes in early stage investments but is also open to later-stage investments.

Source: Dr. Michael Johnson, head of Ann Arbor office for Flagship Ventures
Writer: Jon Zemke

The folks behind Challenge Detroit are looking to build on the talent attraction/retention initiative's initial success by repeating it this year.

Challenge Detroit brings in a couple dozen recent college graduates to Detroit each year, giving them jobs and coordinating opportunities for them to live, work and play in the city. The nonprofit pairs the fellows from each class with local employers and provides them with a living stipend. Last year it welcomed 29 fellows that work for the likes of Compuware and Quicken Loans. This year it plans to bring in another 30 young people as part of its second class.

"It's a manageable number for us," says Deirdre Greene Groves, executive director of Challenge Detroit. "It's a number that allows a greater sense of comradery in the group. They can still get to know each other."

Challenge Detroit is part of a growing number of talent initiatives that looks to bring more recent college graduates to Detroit by matching them with jobs. Organizations like Teach for America and Venture for America pair dozens of young people with positions in local schools and startups, respectively.

Challenge Detroit pairs these graduates with jobs at a number of larger corporations, nonprofits and institutions, providing them with a living stipend of $500 per month. It asks in return that the participants live, play and volunteer in the city. This year, Challenge Detroit is working to make sure its participants more fully capitalize on its experiences.

"We want to make sure we are giving a great benefit to our partners," Greene Groves says. "How can we spend a couple more weeks on them?"

Challenge Detroit is currently accepting applications for its 2012-13 class, which are due by March 3. For information, click here.

Source: Deirdre Greene Groves, executive director of Challenge Detroit
Writer: Jon Zemke

Avicenna Medical Systems has high hopes for its partnership with the VA Hospital in Ann Arbor, which is currently using its technology platform, AviTracks.

The technology enabled its users to better manage treatment of their chronic diseases from home. It's aimed at people who utilize blood thinners or monitor cardiac rhythms. The idea is to lessen the information burden on health-care IT systems, freeing healthcare staff to maximize time with patients and employ best practices for treatment.

"It helps monitor patient information," says Frank Pelosi, chief medical officer of Avicenna Medical Systems.

The VA Hospital in Ann Arbor is not alone in testing out AviTracks. The technology, spun out of the University of Michigan in 2006, is also being used in seven different divisions in the University of Michigan Health System. A team of four people currently works on Avicenna Medical Solutions.

"There is a lot of potential to spread the technology throughout the region, as well as other areas," Pelosi says.

Source: Frank Pelosi, chief medical officer of Avicenna Medical Systems
Writer: Jon Zemke

TechTown is partnering with Bizdom and Invest Detroit to create the Detroit Technology Exchange, an initiative focused on the development of talent, technology, deal flow and cutting-edge startups.

Making it possible is a $1 million grant from the state's Michigan Strategic Fund. The grant, which will be disbursed over a two-year period, is aimed at leveraging existing economic development investments from organizations like the New Economy Initiative for Southeast Michigan to continue the development of Detroit's new economy.

"These power partnerships are what is going to move us forward," says Leslie Smith, CEO of TechTown. "We have to come together collectively to think about the macro problems and tackle them."

The Detroit Technology Exchange consists of four programs geared toward talent retention/attraction, exploiting disruptive technologies, creating robust deal flow, and supporting the early stage startups. The four programs include:

• Integrated Ecosystem Services: This program will institute practices like monthly portfolio reviews to identify opportunities for collaboration and critical marketing and design assistance for companies. The idea is to fill the gaps in the city's entrepreneurial ecosystem and help participating firms attract investment.

• Launch Detroit: A summer boot camp for aspiring entrepreneurs in college (both graduate and undergraduate) that want to launch tech startups. The 10-week program will provide a stipend to participants and work to connect them with the city's entrepreneurial ecosystem. It aims to encourage young talent interested in technology to either remain in Detroit or move to the region.

• D-Venture: This executive-in-residence program will bring selected entrepreneurial-minded professionals to Detroit to create startups out of underutilized or underdeveloped intellectual property. Each participant develops a business plan, acts as CEO, raises seed capital, and receives an annualized salary for six months to one year.

• Detroit Technology Exchange Fellows: This fellowship program will insert individuals into the Motor City's entrepreneurial service organizations and startups. The plan is to infuse high-quality, mid-level talent to Detroit's entrepreneurial ecosystem. It will provide six fellows with an annualized salary over two years.

"More (talent) is better," Smith says. "Sometimes I think we're afraid of more. I think more is better. We are nowhere near having too much talent in the region."

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

People often joke that technology designed to make our lives easier too often has the opposite effect. BraveSoft sees that as an opportunity to grow its bottom line in downtown Ann Arbor.

BraveSoft specializes in database management and business intelligence technology, both of which allows its customers to better harness their data and makes their business more efficient. As computing becomes more complicated to become more efficient, services from firms like BraveSoft become more in demand.

"It has increased the need for companies to increase the analytics of their data," says Tom Wood, president & co-founder of BraveSoft. "That has increased business for us."

The 9-year-old company now employs 42, with about 60 percent of that number working out of Ann Arbor. The company has hired seven people over the last year and expects to add another 10 people in 2013. It currently has five open positions.

"Companies are trying to become more efficient so the need for companies like ours will never run out," Wood says.

Source: Tom Wood, president & co-founder of BraveSoft
Writer: Jon Zemke

Valentine Vodka, the award-winning spirit that's hand-crafted in Ferndale and sold in 1,500-plus stores in Michigan, Illinois and Tennessee, is now distilling gin, a long and carefully-developed spirit that company founder and head-crafter Rifino Valentine describes "as something I'm so proud of."

Liberator Gin, so named in keeping with the company's support of Detroit (in this case, the city's role in turning out B-24 Liberators), was released last week. It'll land on shelves in Illinois in about a week, Valentine says.

The newest liquor in the lineup can be had in the Valentine Vodka tasting room at 161 Vester St. in Ferndale, or bought in stores. It'll give metro Detroit a ride on the gin wagon that's been moving across the country.

"Gin is kind of a niche product, at least in Michigan right now. On the coasts, New York, San Francisco, and now Chicago, gin is really making a big resurgence. There are gin bars and they're a big deal," says Valentine.

Developing a gin as special as the vodka was a year-plus-long process. Research and development consisted of blind tastings against every sort of store-bought gin, with the tasters being friends and family. Those findings sent Valentine and his colleagues back and forth to the distillery and manufacturing facility in Ferndale, where they fine-tuned the tastes and aromas by tweaking the process over and over until they hit on a profile that set theirs apart.

For the flavor, "What I tried to do with this thing was change that taste that people say is like chewing on pine trees," he says. "The main ingredient in gin is juniper berries, so I wanted a gin that doesn't just smack you in the face with juniper…It has a soft juniper nose and then it just doesn't stop at juniper…It picks up coriander and cardamom, and the real unique thing about this gin…is the nice soft cinnamon finish."

At the tasting room connected to the facility, the gin is already a hit, and it's dispelling some myths -- and bad memories -- about the liquor.

"A lot of people in our tasting room are like, 'No, no, no, I don't like gin'. They they taste it, and they're like, 'Oh my god, I can't believe it,' " Valentine says. "Everybody's got their story about gin, why they don't like it. But there's a big difference between bottom-tier and top-tier gins."

Though the tasting room, which is attached to the manufacturing facility, is packed on weekends, Valentine has no plans to expand. He has to save any extra room to make the liquor, and he's adding new equipment to do that.

Make you want some?

With expectations that the Liberator gin will take off as the five-year-old Valentine Vodka has, Valentine is planning to add another manufacturing facility.

Rifino recently hired a full-time distilling apprentice, and more hires will come within months.

"We're at one of those stages where we're growing so fast I'm trying to be real conscious of managing our growth…At some point relatively soon we're going to expand to another facility that's just dedicated to manufacturing. At that point, for sure, there will be hiring, relatively soon, in the next year or two."

Writer: Kim North Shine
Source: Rifino Valentine, founder, Valentine Vodka and Liberator Gin

RAVE Computer, formerly Rave Computer Association, has been growing its clientele through adding more business with Michigan-based firms. It's a plan that has allowed the Sterling Heights-based company to hire five people over the last year.

"The growth has been in our presence in Michigan," says Rick Darter, president & CEO of RAVE Computer. "It's been phenomenal."

RAVE Computer works in modeling, simulation and visualization work. It is the anchor tenant of the Macomb-OU INCubator, allowing it to focus on growing its business with firms based not only in the Great Lakes state but in the defense industry. A few years ago, about 3 percent of the company's customer base came from Michigan. Now it's well into the double digits.

The firm now employs 40 people and one intern. Its new hires work in areas that focus on government contracting expertise, product development and marketing. Darter expects to keep hiring in 2013.

"We will continue to hire a strong presence in the defense industry," Darter says. "I see a large portion of our growth being in the commercial sector right here in Michigan."

Source: Rick Darter, president & CEO of RAVE Computer
Writer: Jon Zemke

Monarch Antenna is off to a fast start in 2013, winning the top prize at the Great Lakes Entrepreneur's Quest's ACE business plan competition last week.

The Ann Arbor-based start-up took home first place in the Emerging Company category and $5,000 in seed capital with it. The company is developing next-generation antenna technology and was able to translate the science behind the new technology into why its a promising investment.

"We have been carving out mind space with the industry players," says Randy Dence, CEO of Monarch Antenna. "We need working capital and working engineers right now."

The 5-year-old company was spun out of Michigan State University. The technology alters the electronic properties of an antenna so it can maximize signal quality. It started out in 2007 with grant money from NASA and the U.S. military to create its first applications for a space suit belt and a flak vest. Today it's working toward creating revenue through producing the antenna technology in medical devices, military applications and smart phones. It counts Automation Alley as one of its early investors.

Monarch Antenna currently employs four people and the occasional intern. The company is working on building prototypes of the technology, raising seed capital and looking for strategic investors. Dence has been focusing on product development and clarifying the message about its potential.

"My goal is to be mentioned in the top two or three companies in the tunable antenna space," Dence says.

Source: Randy Dence, CEO of Monarch Antenna
Writer: Jon Zemke

Kors Engineering is swimming against the conventional wisdom tide, working to make manufacturing a bigger part of the tech company.

The Waterford-based business specializes in systems integration and automation for manufacturers and other industrial facilities. It has spent the last year growing the manufacturing integration side of the business and setting the stage for the big revenue jump in 2013.

"We wouldn't be surprised if our number of customers doubled this year," says Tony Kaczmarek, president of Kors Engineering.

Kors Engineering now services customers in a wide range of manufacturing sectors, including metalforming, hide-processing, food packaging, chrome plating, forging and driveline systems production facilities. Today, a total of 43 plants leverage Kors' PleXML tool to integrate programmable logic controllers (PLCs) and other plant floor systems in order to automate processes and capture and share production data. More than 1,300 work centers are integrated through Kors’ PleXML tool, with 30 percent located outside of the United States.

Kors Engineering currently employs a dozen people and is looking to expand that staff soon. "We are definitely looking at hiring 1-2 people this year," Kaczmarek says.

Source: Tony Kaczmarek, president of Kors Engineering
Writer: Jon Zemke

The Pure Michigan Venture Development Fund has invested $4.5 million between two Ann Arbor-based venture capital firms.

Michigan eLab and Resonant Venture Partners have each received $2.25 million from the Pure Michigan Venture Development Fund. The money originates from the Michigan Strategic Fund and is awarded by the Michigan Economic Development Corp. The money is targeting first- and second-generation venture capital funds based in Michigan. The capital is intended to help those funds raise additional funds, gain traction in the market and help grow the state's investment community.

"It's validation because of the review process the MEDC puts you through," says Doug Neal, managing partner of Michigan eLab. "It's a nice step toward our fundraising goal. We're close to two thirds of the way to our first close of fundraising."

Michigan eLab is a early stage technology venture fund focused primarily on IT and life science/health care companies that spin out from the University of Michigan. Neal is the executive director at the University of Michigan's Center for Entrepreneurship. His co-founders include Rick Bolander, Scott Chou (venture capital veterans since the 1990s) and Bob Stefanski (a Silicon Valley serial entrepreneur with a number of technology start-up exits under his belt). The venture capital firm is working to bring both more seed capital and expert business coaching into the local entrepreneurial ecosystem from places like California.

"We're not just about venture capital," Neal says. "We are also about bringing talent back to Michigan."

Two University of Michigan MBA graduates launched Resonant Venture Partners in 2010 after leading the Ross School of Business' Wolverine Venture Fund. The firm's focus is to fill the need for early stage investments in tech companies. Its investment portfolio includes some of the region's highest profile start-ups, such as Duo Security (an Internet security start-up that has attracted funding from Silicon Valley) and Accio Energy (an alternative energy start-up led by the CEO that built Accuri Cytometers into a acquisition worth hundreds of millions of dollars).

The Pure Michigan Venture Development Fund plans to invest in as many as two more new Michigan-based venture funds. Winning venture funds must raise additional private-sector capital amounting to at least 4.5 times the state's investment. The Pure Michigan Venture Development Fund is currently accepting application until February 28. Applicants are required to raise at least $1 million in private capital, but not more than $25 million, from at least three unrelated investors at the time of application.

Source: Doug Neal, managing partner of Michigan eLab
Writer: Jon Zemke

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