ANN ARBOR (WWJ) –– The Zell Lurie Institute at the University of Michigan’s Ross School of Business Friday announced that its student managed Zell Lurie Commercialization Fund has made two investments.
The fund provided pre-seed investments to healthcare startup AlertWatch and ad tech startup AdAdapted. The collective investments total $90,000 and closed in November 2013 and January 2014, respectively.
The deals mark the latest in a series of successful investments by the fund, formerly known as the Frankel Fund, which includes Accio Energy, Ambiq Micro and Are You A Human in its portfolio.
A team of 25 graduate students manages the fund and is organized into four investment teams — health care, technology, consumer and cleantech investments. Each team may invest up to $100,000 per investment in multiple installments. The process provides action-based educational experience for MBA and other graduate students in early stage company formation and evaluation. The Zell Lurie Commercialization Fund is part of a trifecta of student-led venture funds offered at Ross, including the pioneering Wolverine Venture Fund and the UM Social Venture Fund.
“The Zell Lurie Commercialization Fund is as close to a real-world investing experience as any MBA student could possibly receive,” said Stewart Thornhill, director of the Zell Lurie Commercialization Fund and executive director of the Zell Lurie Institute. “Both of these investments demonstrate the strength of the local startup scene and represent the power of the greater UM community to foster growth within the region. AlertWatch and AdAdapted both have tremendous promise to transform their respective industries and deliver a return on our investments.”
AlertWatch is an Ann Arbor-based spinoff from the University of Michigan Health System that produces clinical decision support systems for hospitals. Founded in 2011, AlertWatch simplifies patient monitoring with intuitive products for operating rooms and intensive care units by displaying vital data to doctors in an easy-to-understand format that could help increase patient safety. AlertWatch was founded by Kevin Tremper and is led by CEO Justin Adams, who got a bachelor of science in electrical engineering from UM in 2001 and a UM MBA in 2009.
“The fund’s investment in AlertWatch is a great example of the immense talent available here in the Ann Arbor area,” said Chris Doughty, a scheduled 2014 MBA graduate and student lead on the deal. “Not only do we have top notch technologies being developed here at the University of Michigan, but we also have management teams capable of growing and developing very impressive companies. The opportunities for venture capital investments in Ann Arbor are immense and will continue to attract attention from venture capital firms around the country.”
UM says Alert Watch was an attractive investment because of its close ties to the Ann Arbor area, its strong management team and potential return on the Fund’s investment make it an ideal investment. The fund became aware of AlertWatch through its close relationship with UM’s Office of Technology Transfer, which also was a valuable source of information during the due diligence process. Since the investment was made in late 2013, AlertWatch has made significant progress on pilot testing, co-marketing partnerships and data showing improved health outcomes, and the company learned this month that it has been approved by the U.S. Food and Drug Administration to sell the software, one of the key milestones outlined in the Fund’s deal with AlertWatch.
Ann Arbor-based AdAdapted offers a platform that automates advertising for advertisers that want to reach mobile app users via dynamic, customizable, non-disruptive, product placement opportunities within mobile games and apps. With AdAdapted, advertisers can launch scalable, trackable, custom branded campaigns across a wide variety of apps without duplicating efforts with each publisher.
The investment in AdAdapted marks the fund’s first investment in the rapidly growing ad tech sector and was led by Ray Gallagher, also a scheduled 2014 MBA graduate. Prior to this round, the year-old start-up received financing from the Michigan Micro Loan Fund in October 2012 and won the first place award of $2,000 in the New Business Ideas category of the Great Lakes Entrepreneur’s Quest business plan competition in January 2013.
Companies and individuals interested in obtaining funding from the Zell Lurie Commercialization Fund may find additional details about the application process on the Institute’s website at http://www.zli.bus.umich.edu.