Frankel Commercialization Fund - Current Portfolio

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Accio Energy 

Accio is an Ann Arbor-based company that has developed a wind energy device that utilizes charged particles and wind to create electricity.  The proprietary “aerovoltaic” technology utilizes no moving parts and is both highly scalable and cost effective.  Accio Energy’s wind systems meet the need to expand wind energy to more locations, from rural to urban rooftop.  The devices will be available in various dimensions, from the size of a window to as large as a billboard.

The company was founded by a pair of mechanical engineers - Dawn White and David Carmein, founding team members of advanced materials company Solidica Inc., a portfolio company of North Coast Technology Investors.
 
Accio used the Frankel Investment to develop an initial prototype of its "aerovoltaic” technology.  Since the closing of the Fund’s investment in 2009, the company has made significant progress by hiring an experienced startup company CEO, forming a scientific advisory board, moving into much improved laboratory and office space, developing a model for testing and designing the product, developing more reliable test fixtures and processes for prototype testing and developing an early alpha version of the product.  Perhaps most importantly, the Company closed a $1.9 million ($1.4 million of new money) Series A round of financing to which the Frankel Fund’s Note was converted in exchange for preferred stock.

Ambiq Micro

Ambiq Micro is developing next generation energy-efficient microcontrollers that have the potential to substantially extend the battery life of wireless devices. The technology could be used in smart credit cards, sensors that control temperature or detect motion in smart homes and buildings, and a variety of medical and mobile devices.
 
The University of Michigan-based Ambiq Micro was founded by Dennis Sylvester and David Blaauw, professors of electrical engineering and computer science at the University’s College of Engineering, and Scott Hanson, a post-doctoral Fellow at the College of Engineering who is currently serving as the company’s CEO.  The U-M technology, licensed to Ambiq, was recently cited as one of the top 20 technologies for 2012 in EE Times. 
 
The seed investment from the Frankel Fund came on the heels of a $250,000 prize awarded by Draper Fisher Jurvetson (DFJ) and Cisco as part of their co-sponsored 2010 Global Business Plan Competition for university and business school students. The Frankel Fund investment, along with the DFJ/Cisco investment, was used to support early product development and customer evaluation activities as well as an intellectual property assessment.  Quickly following the Frankel Fund’s investment, Ambiq raised an additional $1.9 million in a Seed Financing of preferred stock.  Since the closing of the Seed Round in October, 2010, the Company moved to new facilities in Austin, Texas and hired a VP of Engineering, a VP of Sales and Marketing and two product development engineers.  Ambiq has completed its first “tape out” of its initial product, a real time clock, to provide alpha stage samples to customers for testing and evaluation.  A follow-on product system is expected to be ready for “tape out” later in 2012.

The Frankel Fund has visiting rights to the Ambiq Board Meetings and works closely with the company to provide whatever assistance it can to the management team.

Arbor Photonics

Arbor Photonics is an Ann Arbor-based company commercializing technology that originated in the U-M's Department of Electrical Engineering and Computer Science (EECS). Ann Arbor-based RPM Ventures, which invests in university spinouts and technology-focused companies that target customers based in the Midwest, led the initial round of financing
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Arbor Photonics and its chief science officer, EECS Professor Almantas Galvanauskas, have developed a novel scalable optical fiber technology that enables high-power fiber lasers to be used in a variety of new materials-processing applications in the automotive, electronics and aerospace industries while offering a lower-cost replacement to existing bulky laser systems. Led by Phillip Amaya, a 20-year veteran of the laser industry, Arbor Photonics used the Frankel seed money for customer identification, prototype development and assembly, and the development of engineering and manufacturing plans for the company. Since the expenditure of the Frankel Fund investment, the Company has rented facilities in Ann Arbor, hired a VP of Engineering and has a small team of engineers.
 
"We're very fortunate to find both the technological and financial seeds for our business at the University of Michigan," Amaya said upon closing the investment in December, 2007. "The Frankel Fund's early-stage investment plays a critical role in helping us transform the technology into a product demonstration and the business concept into a competitive strategy. The Frankel students are an impressive team to work with and we're looking forward to their continued participation in Arbor Photonics."

Since completion of the Seed Round in which the Frankel Fund participated, the Company closed an A Round in February of 2009 at a mark up for the Frankel Fund. The Ross School’s Wolverine Fund participated in the financing by means of exercising the Frankel Fund’s preemptive rights for participation in future investments.  Product development has progressed slowly but nicely as demonstration products with a competitive performance level have now been successfully demonstrated to customers.  Arbor Photonics’ next generation product, which provides more compelling benefits to customers, will be delivered to customers for evaluation in the Spring of 2012.

The Frankel Fund has visiting rights to the Arbor Photonics Board Meetings and works closely with the company to provide whatever assistance it can to the management team.

Are You a Human

Are You a Human (AYAH) is the Frankel Fund’s most recent investment having closed in July of 2011 as part of a syndicate of investors in a $750,000 Series A round investment.  While the Frankel Fund normally is the first investor in and makes its investment in the form of a Convertible Note, a venture capital company got to the table before the Frankel Fund could finalize a term sheet with AYAH so the Company no longer needed the Frankel Fund’s pre-seed money.  However, since the Company met the Frankel Fund’s investment criteria and since the seed funding in the first tranche was only $350k without the Frankel Fund’s money, the Fund  decided to join with Detroit Venture Partners and First Step Fund, both based in Detroit  in the initial round of financing.   The Seed Round is being used for product development, beta testing and customer acquisition.

Are You a Human is developing on a new technology for verifying that users on websites are people and not automated spam programs.  Most Internet users have encountered technology used to authenticate website users: squiggly letters and numbers that need to be read and entered into a website form. It is called CAPTCHA, or Completely Automated Public Turing test to tell Computers and Humans Apart.  Instead of having users try to make out letters and numbers, Are You a Human is developing interactive games to tell humans and computers apart. For a more detailed reading, see a recent Bloomberg/Business Week online article about the Company.

The Company is currently taking submissions for those interested in using a beta version of the technology on their websites. Are You a Human plans to launch a public beta version in the coming months.

Are You a Human was co-founded in 2009 by Tyler Paxton (MBA ’11) and other Masters of Business Administration students at University of Michigan’s Ross School. Two members of the Frankel Fund, Ben Blackmer (MBA ’12) and Biswaroop Palit (MBA ’11), were part of the co-founding team at AYAH. The company was founded in September of 2009, joined the Ann Arbor incubator TechArb in the fall of 2010, and received support from both the Ross School of Business’ Zell Lurie Institute and the College of Engineering’s Center for Entrepreneurship throughout the 2010-2011 academic year.  In April, the company was awarded a Dare To Dream Integration grant of $5,000 by the Zell Lurie Institute.  The company also competed at the Rice University 2011 Business Plan Competition and placed second out of more than 500 applicants and 42 participants, earning $154,000 in prize money.  Are You a Human employs four full-time workers and eight contractors.

The Frankel Fund enjoys Board Observer privileges with the Company.

SurMod (Formerly BeholzTech)

SurMod Inc. (previously named BeholzTech) was founded in Flint, MI by Lars Beholz, a visiting associate professor of chemistry at Kettering University (formerly General Motors Institute) also in Flint. SurMod's technology effectively coats polyolefin plastics, making them easier to modify and adhere to other materials. Polyolefins are tiny plastic pellets that are used to make thousands of products we use everyday and represent as much as half of the plastics market.

Prior to Beholz's innovation, the coating, bonding and chemical modification of polyolefin plastics was generally prohibitive due to the significant financial investment required and the potentially dangerous chemical byproducts created. SurMod's safer, cheaper, cleaner and more effective technology to treat polyolefin plastics will enable the further use of polyolefins by the $110 billion plastics industry.

"We are really pleased to have been able to partner with the Frankel Fund," Beholz said at the time of the investment closing. "The money provided will be absolutely critical to enable BeholzTech to produce sample product with which to begin discussions with potential customers and future investors. Working with the Frankel Fund has been a great learning experience as I navigate the Company through its startup phase."
SurMod used the Frankel Fund Investment for prototype development and customer identification.  Major progress was made in 2011 as the Company attracted an experienced CEO as interim CEO to drive fund raising and a more disciplined product development effort.

The Frankel Fund continues to maintain visiting rights to the Company’s board meetings.

Surgimatix

Surgimatix is now a Chicago-based company founded by Dr. Jafar Hasan, a former surgeon from the University of Michigan Hospital and now a practicing cosmetic surgeon in the Chicago area. Hasan, is a graduate of U-M's joint MD/MBA program.  The Company has developed an innovative wound-closure device that combines the convenience of a surgical stapler with the aesthetic and closure strength benefits of manual sutures. This novel approach decreases the time of surgery, which saves operation costs and reduces scarring for patients.

Surgimatix has used the Frankel Fund seed money to fund pre-clinical testing, refine the clinical scale prototype design, research competitive intellectual property and develop the resorbable fastener for the device.
While studying for his MBA, Hasan was a member of the initial Frankel Fund team in 2006. “Working on the Frankel Fund provided me with hands-on experience in the areas of due diligence and commercialization,” stated Hasan. “As an entrepreneur, the Frankel Fund will be instrumental in helping us to move from an idea that demonstrates a health care breakthrough to a marketable product that could dramatically improve surgical recovery.”

Surgimatix completed pre-clinical testing of an Alpha.2 version of its new technology in June 2010, showing significantly superior performance relative to competing wound closure methods. The Company also has raised $125,000 in additional seed money to continue to fund product development.

The Frankel Fund has visiting rights to the Surgimatix Board Meetings.