The Michigan Growth Capital Symposium: More Than Money
If you're expecting the Michigan Growth Capital Symposium (MGCS) to be a quiet, sober affair with serious, well-dressed executives disappearing into "whisper suites" and nervous presenters droning on and on in front of Byzantine PowerPoint presentations, you may be surprised to learn how relaxed and casual the event really is.
Cruising the lobby and intimate hallways of the Marriott Hotel at Eagle Crest, eager but confident entrepreneurs mingle and chat with VC managers, 'angels' and each other before slipping into the next presentation or panel discussion. The conversations are friendly and curious, remarkably laid back for a business conference where the fate of so many local start-ups can be decided.
Celebrating its 26th year in Ypsilanti, the MGCS brings together earnest investors and high tech entrepreneurs in a matchmaking event that can spell success for not only local start-ups but also Michigan's economic future. These fresh-faced businesses might well be the corporate legends of tomorrow.
The centerpiece of the two-day Symposium's presentation process is a series of rapid-fire pitch sessions which founder David J. Brophy pioneered 26 years ago and is now emulated at similar events all around the country. While hardly the ego-driven pressure cooker of television talent competitions like America Idol or The Lot, these presentations have some important similarities, not the least of which is the millions of dollars at stake.
Forty local companies are invited to pitch to a large crowd of venture capital managers and angel investors. Each presenter gets 10 minutes to make their case, demonstrating their product, potential and plans for growth --along with requests for the funds they need. This could mean a few hundred thousand in capital investment or tens of millions of dollars.
It's a down and dirty process that doesn't allow for flowery marketing terms or sleight-of-hand advertising. PowerPoint charts and concise product comparisons give way to a brief Q&A with potential investors then the moderator politely but firmly ends the session and the next speaker starts their pitch. Then the real conversations begin--in the lobby, at the lunch table and while browsing the presenter tables.
A sampling of the invited companies shows a wide range of industries and products and while Energy, Life Sciences and Technology seemed to be the "Big 3," the offerings were quite diverse. Virtualeyes, for example, had the kind of cutting edge gloss that attracts attention with a web-based service called cplanet.com, which uses their unique, patented approach to deliver rich media content in multiple viewpanes on the web.
Vice president of Operations Michele Favoretto and Jason Ryan, VP of Sales, were on hand to demonstrate Virtualeyes technology and discuss their goals for the symposium. "We're certainly looking for money, but more importantly, we're seeking partners who are willing to take our technology and apply it in their own ways, " Favoretto explained. "We'll build the interface and content, but we need people who will take our technology and use it in new markets."
Hybra-drive, a company from the small town of Deerfield, Michigan presented their award-winning hydraulic hybrid propulsion system, claiming their system offers higher torque and increased rescue scenario safety than the current crop of electric hybrids.
While not all of these companies will get the investment they need, MGCS clearly provides each with an efficient method of reaching many potential investors at one time. For Hybra-drive, this exposure paid off in spades. The company's innovations helped get them some private investment.
"More than money"
Similarly, at last year's event, Guidepoint Systems presented their new products and from that event, found the kind of support other start-ups dream of. Rand Mueller, CEO of Guidepoint Systems explained, "we raised $8.35 million last year, and the MCGS was a big part of that success. We used that money to move outsourced functions in-house, and to expand our sales and marketing efforts."
Headquartered in Pontiac, Guidepoint offers a complete system that integrates global positioning satellites (GPS), advanced wireless technology, the Internet and full-time response centers to provide stolen vehicle recovery, driver safety & convenience, vehicle tracking and fleet management services. Guidepoint is sold as an alternative to Lojack®, OnStar® and other branded navigation, security, fleet management and vehicle tracking products.
"More than money," Rand explained, "we also created amazing relationships with companies and individuals who have had a huge impact on our company and our success. For example, last year we met Ian Bund of Plymouth Venture Partners. Beyond the capital fundraising, Ian introduced us to a gentleman named Michael O'Brien, a restaurateur and original member in Saxon motorcycles, who builds custom V-twin motorcycles. One of the first things Michael said to me was, "Can you put (Guidepoint) on a motorcycle?" Mueller laughs, "That blew my mind! Our product was designed for cars and trucks, but motorcycles are a huge target for thieves. "I said, sure, why not! This offhand comment totally changed my business. Michael is now on our Advisory Board."
One of the hallmarks of the MGCS is its Midwest focus and compact size. The majority of its players are from Michigan and there is both an intimacy and collegiality that encourages the kind of relationship building Mueller praises. While many of these conversations and introductions seemed spontaneous in the casual space of the conference center hallways, it quickly becomes apparent that nothing at the MGCS is impromptu or haphazard. Overlapping conversations and business cards dealt out with the speed of a Vegas dealer are followed by promises of future lunches and business meetings. Representatives from Michigan Economic Development Corporation, Spark, Crain's Business, MichBio and the local media mixed liberally with VCs and entrepreneurs, greasing the wheels for the kind of connections that lead to economic opportunity.
Not surprisingly, a lot of that networking was aimed at companies showing products for new energy, automotive, life science and Internet marketing and communications. ProNAI Therapeutics, from Kalamazoo's growing biomedical industry, is one of the companies that hoped to capitalize on this interest.
Dr. Richard Gill, President and CEO of ProNAI, explained, "This is our second year at MGCS. Last year was our A Round, which raised several million dollars to fund testing of our new "DNA interference" drug (DNAi). This year, we're back for the B Round, with expectations to raise up to $25 million to begin human clinical trials, in preparation for FDA approval."
ProNAI has pioneered a new class of drugs that could attack a particular genome prevalent in cancer cells, particularly Non-Hodgkin's Lymphoma and Prostate cancer.
"We work with venture capital firms all year long, in a variety of ways," Gill explains, "The MGCS is extremely powerful in its efficiency and potential for networking. We feel strongly that our success at last year's Symposium was crucial for our growth and success."
When asked if he felt that this particular event attracted risk takers, Gill answered, "Venture capitalists are not risk takers, despite that reputation. They are looking for sound investments, to show their own success in choosing good investments. So our job is to show these investors that we're not a risk at all, by showing how our team has years of experience and knowledge about our product."
What is most encouraging about entrepreneurs like Gill, however, is that they see beyond their own company's desire for success. They have a clear view of what investment means to both Michigan and the world in general; that events like MCGS are, indeed, about more than just money.
"The MGCS plays a key role in the process of innovation and development," Gill adds. "Without the investors, we can't get anything to market. In the VC world, we call them Angels. And with a drug like ours, that eliminates certain forms of cancer, the support provided by the VC managers and the MGCS is angelic and heroic in its effect."
Scott Paul Dunham is a freelance writer living in Grosse Pointe Park. He contributes to metromode, Rapid Growth and is Co-founder of the Creative Energy Alliance and the Center for Creative Technologies. His previous article for Metromode was We Got Game.
David J. Brophy (courtesy of University of Michigan)
Hybra-drive system on a Volkswagen Beetle (courtesy of Hybra-drive)
Guidepoint vehicle locating software for cellular phones
Guidepoint logo (courtesy of Guidepoint)
ProNai illustration of DNA
Dr. Richard Gill of ProNai (courtesy of ProNai)