Ann Arbor firms secure investments from First Step Fund

Wednesday, May 26, 2010 | Source: Concentrate

Ann Arbor SPARK-related firms have made a strong showing in the first round of financing from the First Step Fund.

Three of the seven firms that received five-figure loans either hailed from Ann Arbor or have a direct connection to Ann Arbor SPARK. Those three firms include Current Motor Company, Bandals and InfoReady. The other four start-ups came from Detroit's TechTown incubator, which also controls the First Step Fund.

Ann Arbor-based InfoReady, a spin-off of GDI Infotech, plans to use its loan to continued development and marketing of its grant-writing software. That should mean a few more hires at the new start-up once it finishes raising money this month.

"There is tremendous need in the market for finding new sources of revenue," says Bhushan Kulkarni, CEO of InfoReady, about the firm's software.

Invest Detroit and Ann Arbor SPARK, which runs the Michigan Micro Loan Fund, created the First Step Fund. The idea is to create a funding source for local start-ups starving for seed capital. The current credit crisis has resulted in traditional lending institutions cutting back on investment capital.

Each loan averages about $50,000. They are either a short-term loan or a convertible note that will help younger start-ups get their feet underneath them. The money is usually used to help push forward product development or expand inventory.

The First Step Fund expects to make 40 loans this year. The companies receiving the loans are picked by a board independent of TechTown. The next round of financing is not far away.

"We next investment will be in mid June," says Mahendra Ramsinghani, managing director of the First Step Fund and the husband of one of the co-founders of Concentrate's parent company Issue Media Group.

Source: Mahendra Ramsinghani, managing director of the First Step Fund and Bhushan Kulkarni, CEO of InfoReady
Writer: Jon Zemke

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