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UM’s Frankel Fund Leads Portfolio Company To Acquisition

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The University of Michigan central campus.

The University of Michigan central campus.

(credit: istock) Technology Report
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ANN ARBOR — The University of Michigan’s student-run Frankel Commercialization Fund announced Monday that Arbor Photonics, one of its portfolio companies, had been acquired by Nlight Corp., a solid state laser manufacturer with plants on Oregon and Washington.

Ann Arbor-based Arbor Photonics offers a scalable, optical fiber technology that provides high power lasers that increase productivity and enable new capabilities for advanced laser materials processing and defense applications.

The company is a University of Michigan spinoff whose technology originated within the Department of Electrical Engineering and Computer Science and was led by Phillip Amaya, a 20-year veteran of the laser industry. The Frankel Fund first invested in the company in 2007 and as a result of this acquisition the fund will now own stock in Nlight.

The investment in Arbor Photonics was the first ever made by the Frankel Commercialization Fund, a pre-seed fund established to identify and accelerate the commercialization of ideas generated within and around the university community. The fund contributed $85,000 to the initial round of financing, which was led by Ann Arbor-based RPM Ventures. The company also secured $2 million from the state of Michigan through economic development programs sponsored by the Michigan Economic Development Corp.

Arbor Photonics used the money for customer identification, prototype development, and the development of engineering and manufacturing plans for the company.

The Wolverine Venture Fund, the university’s venture stage investment fund, also invested in the company, participating in the company’s Series A round of financing in 2009.

“Our students have been exposed to tremendous experiences through the course of our relationship with Arbor Photonics,” said Thomas Porter, managing director of the Frankel Commercialization Fund and executive in residence at the UM business school’s Zell Lurie Institute for Entrepreneurial Studies. “From learning about technology commercialization during their evaluation of the initial investment to their continued involvement in the company as board observers through this acquisition process, students simply cannot get this type of real-world experience elsewhere.”

Added Amaya: “The Frankel Fund played a critical role in Arbor Photonics’ growth. They have been with us almost every step of the way, from first commercializing the technology with their first investment, through building the team and further developing the product. We are fortunate to have had the financial support of the fund as well as the guidance and insight from the talented student team during this time and look forward to their continued involvement as we continue to evolve under the direction of Nlight.”

The Zell Lurie Institute pioneered the concept of student-led venture funds, and for more than a decade has provided MBA students with real-world investing experience. The Frankel Fund, established by University of Michigan alumni Stanley Frankel, together with the Wolverine and Social Venture funds, now have more than $6.5 million under management and deliver returns comparable to top professionally managed funds. The funds, along with rigorous coursework, internships, Dare to Dream grants, and Michigan Business Challenge business plan competition, comprise the Institute’s program portfolio. This action-based approach to entrepreneurial education results in regular inclusion at the top of graduate entrepreneurship program rankings.

Companies and individuals interested in obtaining funding from the Frankel Fund must apply by Jan. 18 and can obtain additional details about the application process on the Institute’s Web site, www.zli.bus.umich.edu/wvf/frankel_fund.asp.

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