Frankel Commercialization Fund - Portfolio

Overview | Portfolio | Frankel Fellows | Advisors | Student Application | Submit a Plan

Accio Energy 

Accio Energy is an Ann Arbor-based company developing a dramatically different energy solution to a world hungry for low cost renewable electricity. The basic design concept is flat, wind-permeable panels, composed primarily of mass-produced tubes and configured into standard 2-10KW modules. The modules use tiny amounts of non-potable water and charging power to supply a mist of charged water droplets into the wind to generate electricity. Accio's Aerovoltaic system is a disruptive technology that offers the potential to dramatically lower the cost of wind-generated electricity through reductions in both up-front capital expense and ongoing maintenance costs. Accio's Aerovoltaic wind engines use wind energy to continuously work against the electric field created when positive and negative charges are separated, creating high-voltage, direct-current electrical power using no moving parts.

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 an innovative and proprietary model for testing and designing the product, developing more reliable test fixtures and processes for prototype testing and developing alpha versions of the product.

The Company has now achieved a 10x scale up of net energy positive performance (vs. less than 1x at the time of the Frankel Fund's investment). 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 in December, 2011 and is planning to close a Series B round in the summer of 2012.

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, built management product development teams, and completed a "tape out" and customer sampling of its initial product, a low energy real time clock. A manufacturing run was completed in the second quarter and has resulted in an encouraging pipeline of orders and "design-ins."

In March 2012, Ambiq closed a $737,000 bridge round to extend the company's cash runway through summer of 2012 when the Company expected to close on a Series A Round. 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.

Arbor Photonics and its chief science officer, EECS Professor Almantas Galvanauskas, 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.

"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.

The Company has successfully developed and initiated marketing for a competitive industrial laser system. Advanced stage products providing novel benefits to the industry have also been developed and are in the hands of the leading customers in the field for evaluation. Arbor Photonics has succeeded in landing a number of Phase I and Phase II SBIR grants to help finance the company and initial sales were made in 2011. The Company is currently reviewing its financing options of raising additional capital or joining with a partner to pick up the financial burden of funding further product and customer development.

Are You a Human

Are You a Human 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 funding was used for product development, beta testing and customer acquisition.

Are You a Human has developed a new technology for verifying that users on a website are people rather than automated programs, or bots. The common way to verify this currently is through the use of the CAPTCHA (Completely Automized Public Turing test to tell Computers and Humans Apart), those annoying and obnoxious twisted text and squiggly character challenges that sites ask you to fill out when registering or buying tickets, for example. Instead of using text, Are You a Human uses games they call PlayThru's, which use the natural interaction with the game for verification. The company opened a public beta in January of 2012 and has since been installed on more than 2,000 website. In August of 2012, they served 6.5 million PlayThru's. Anyone can use PlayThru for free. To install, just go to the website at portal.areyouahuman.com/signup." 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 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. The company competed at the Rice University 2011 Business Plan Competition (the World Series of college business plan competitions) 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

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 has developed a wound-closure device that combines the convenience and speed of a surgical stapler with the aesthetic and closure strength of manual sutures. This novel approach decreases the time of surgery, which saves operational costs and reduces scarring on patients. With over 30 million operations completed each year in the U.S., the addressable market is approximately $1B.

The founder is Dr. Jafar Hasan, a former surgeon at the University of Michigan Hospital and now a practicing cosmetic surgeon in the Chicago area. Dr. Hasan is a graduate of U-M's joint MD/MBA program. The Frankel Commercialization Fund (the Fund) invested $90,500 in 2008. Since then, the company raised an additional $165,500 and does not face a funding shortage at this time.

Significant progress has occurred since the Fund's investment:

Preliminary results of the animal study are very positive

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 move from an idea that demonstrates a healthcare breakthrough to a marketable product that could dramatically improve surgical recovery."