2016 ANNUAL REPORT a Letter from the Chair a Letter from the President and CEO

it’s all here ANN ARBOR SPARK 2016 ANNUAL REPORT a letter from the chair a letter from the president and CEO

My role as chair of Ann Arbor SPARK’s board gives me As an annual exercise, preparing an introductory a unique opportunity to see the dedication and hard letter to an annual report is part reflection and part work that it takes to help our region grow and prosper. prognostication. Reflection …. on the challenges and Economic development is a team sport, and the Ann Arbor region benefits from the opportunities of the last few years and the successes we have had in capitalizing collaboration of the public, private, non-profit, and academic leaders all working on both. Prognostication …. anticipating what will be the new challenges and together to create a brighter future for us all. opportunities to continuing to build a robust economy aspiring to benefit all of its From tech talent to quality of life, to educational and professional opportunities, citizens and communities. the Ann Arbor region delivers what leading businesses and in-demand job-seekers The good news is that the work of our private-public-academic-non-profit want: A vibrant community with many choices for individuals and families to partnership for more than a decade has resulted in, and positioned our region for, live, learn, work, and play. Our economy is built on the very attributes that define long-term success. We have created a robust entrepreneurial ecosystem in the Ann economic health. We offer an attractive location for a range of businesses and Arbor region. We have built a first rate business development team that can give talented individuals – both new to this region as well as those who want to start GDP producing businesses the help they need to thrive. Global companies see this here, stay here, and thrive. It is truly “All Here!” as a place to locate and grow.

Global competition, particularly among communities focused on the accelerating Consider the evolution of Ann Arbor SPARK’s Entrepreneur Boot Camp. First-time growth of new technologies, is intense and unrelenting. For more than a decade participants from years ago are now mentoring startup companies, providing the now, SPARK has worked to capitalize on the talent production prowess of University wisdom that propels those businesses forward, nourishing our ecosystem through of Michigan, Eastern Michigan University, and Washtenaw Community College, the experience of those who know businesses of any size can succeed here. giving our region the edge that employers look for. The Ann Arbor SPARK board of Today we celebrate the progress our community made over the last several years directors guide a strategic plan focused on the future and what we can do through toward the creation of the American Center for Mobility at Willow Run (ACM). partnership, collaboration, and investment to position our region for economic Under construction and opening this fall, ACM was designated in 2016 as a national growth and prosperity, benefiting all of our citizens and communities. proving ground for the new mobility solutions arising from big data, the “cloud”, and The American Center for Mobility at Willow Run (ACM) is a shining example of connected and autonomous vehicles. The eyes of the world are once again turned how our community works together through collaboration. This project is vital to to what is happening in southeast Michigan, spearheaded by Mcity, U-M’s Mobility maintaining our state and region’s global leadership in automotive research and Transformation Center, and ACM. development, and the shifting mobility landscape towards a future of autonomous However, the future is not foreordained. In his recent book, Thank You For Being and connected vehicles. SPARK played an important convening role to help build and Late, An Optimist’s Guide for Thriving in the Age of Accelerations, Tom Friedman support the coalition of partners working to bring this project to fruition. Partners describes how we are now living in the age of exponential accelerations of include the University of Michigan, the State of Michigan, Business Leaders for technology, globalization, and climate change that individually and in combination Michigan, Ypsilanti Township, and our federal Congressional delegation. are moving faster than our capacity to adapt to them. It is my optimistic belief It is very gratifying to have been part of Ann Arbor SPARK’s leadership over the that the sustained engagement of our public, private, academic, and non-profit years and an honor to be the current chair. I look forward to working with the board leadership through SPARK’s unique collaborative platform gives us a fighting chance and our partners in 2017 to continue to advance our region’s success and take to help our region adapt to and benefit from these accelerations, while at the same advantage of future opportunities. time creating solutions for the State of Michigan, the nation, and the world.

Sincerely, It truly is my honor to work with SPARK’s stakeholders and our incredibly talented and dedicated staff in this effort.

Regards, Cynthia H. Wilbanks CHAIR OF THE BOARD, ANN ARBOR SPARK Paul Krutko PRESIDENT AND CHIEF EXECUTIVE OFFICER, ANN ARBOR SPARK FOUNDATION FOR GROWTH The Ann Arbor region continues to solidify its global reputation as an area of innovation and economic prosperity. The foundation that nurtures this type of ecosystem is truly unique, and it’s here. This distinct, coveted economy supports and enables the success of our DRIVING INDUSTRIES.

Products/ Driving Industries Products/ Services Services Visitors Mobility

tic & Global Advanced Manufacturing Markets Driving industries are Software companies that sell goods

Domes $$$ $$$ IT and services on a local, national and global level. $$$ Products/ Services They are the foundation on which our region’s People Serving & economy is built. They create jobs, attract invest- mobility Business Support Industries ment, and form business clusters that attract other companies to the region. These companies are the attract other Community Success Factors catalyst for prosperity. companies & Exceptional Workforce Efﬁcient Business Environment World Class Place 2016 DRIVING INDUSTRIES

advanced support the software manufacturing quality of life form investment business clusters create jobs JOB GROWTH ANN ARBOR SPARK works with 60% OF COMPANIES in driving industries that provide a foundation for a growing economy. Our work has a DIRECT IMPACT: These companies are thriving and, in turn, so is our region.

PRIVATE SECTOR JOB GAINS – Washtenaw County 2010-2016

13,083 New Jobs Driving Industries driving industy People job growth Serving Driving & Industries 60% Business people-serving Support and business support sector companies job growth tech SPARK served both Entrepreneurial Services and Business Development Teams

HAVING DRIVING INDUSTRY COMPANIES LOCATED IN OUR REGION BENEFITS US ALL: support the Their employees shop and dine here, use services such as accountants and banks, and they pay the taxes that contribute to our exceptional schools, better roads, tax base abundant parks, amazing community services, and great quality of life. donna doleman SENIOR VICE PRESIDENT, MARKETING AND COMMUNICATIONS, ANN ARBOR SPARK primed for growth

Ann Arbor SPARK Central Innovation Center —

Designed to meet the needs of entrepreneurs, WORKIT HEALTH closed INDUSTRYSTAR attracted it supports very early stage companies to more 2016 with a $1.1 million funding three new global brands as mature startups. Educational events and round to expand its online customers and was a semifinalist incubator space, combined with access to addiction recovery platform. at the Accelerate Michigan services and experts, put emerging companies Its previous funding included SPARK grants for Innovation Competition. In addition to office space, on the fast track to success. At SPARK Central, efficacy trials, marketing, and product development. IndustryStar has turned to SPARK for business entrepreneurial companies are in a prime down- It also benefited from SPARK’s Entrepreneur-in- accelerator grant support for marketing services town location, in the heart of Startup City USA. Residence program, which matched the company as well as interns from the Digital Engagement From here, these companies attract talent and with an experienced IT executive for guidance Clinic, SPARK’s collaborative initiative with Eastern capital, and grow our region’s economy. and expertise. Michigan University.

157events held It’s exciting to see how OUR ENTREPRENEURIAL ECOSYSTEM CONTINUES TO EVOLVE. We have more serial entrepreneurs here than ever before, and they’re committed to helping the next generation. bill mayer 6,232attendees VP ENTREPRENEURIAL SERVICES, ANN ARBOR SPARK

BOOT CAMP where are they now: Since its inception in 2001, ENTREPRENEUR BOOT CAMP has evolved in tandem with the ecosystem it’s a part of, tapping in to the resources here to help startups succeed. This year Ann Arbor SPARK has worked with WARMILU, SPARK further strengthened its teaching team by adding the veteran technologists, investors, a University of Michigan startup that makes and entrepreneurs whose experience helped reﬁne and shape the Boot Camp curriculum. non-electric, reusable warming blankets for infants in impoverished areas, since 2012. The company SPARK also added similar high-caliber talent to its team of mentors, who offered expertise and has received several business accelerator grants, real-world perspective to the emerging entrepreneurs. To date, SPARK has successfully hosted as well as support from SPARK’s collaboration with 29 Boot Camp sessions. Eastern Michigan University’s Center for Digital Engagement. Recently, Warmilu shipped its ﬁrst order, to help babies in Kenya. 2001–2016 +

BOOT CAMP AT-A-GLANCE: 601 jobs created 100 mentors + ENTREPRENEURIAL Michigan Angel Fund (MAF) — SERVICES AT-A-GLANCE THE RIGHT SERVICES AT THE RIGHT TIME With 130 members and 16 companies in its portfolio, Access is critical. With SPARK’s support, these MAF is the largest angel organization in Michigan. Affordable office space for startups ventures are able to secure investments, expand their It fills an important funding gap by investing in very teams, and bring amazing innovations to market. early stage companies across the state that are not Entrepreneur Boot Camp primed for venture and other sources of capital. MAF Expert counsel to entrepreneurs is managed by Ann Arbor SPARK with support from Access to funding opportunities Raised $18M+, acquired by Allergan the Michigan Economic Development Corp. Educational & networking events Michigan is competitive as a destination for high tech Nurturing and supporting startups because of our range of comprehensive Raised a $15.5M Series B round homegrown businesses creates funding programs. The MICHIGAN ANGEL FUND IS PROOF new jobs and increases local that we’re serious about helping entrepreneurs grow investment, which will in turn their businesses here, and recognize the unique needs increase tax revenues. of fledgling companies. IMPACT ON OUR Raised a $1M seed round, expanding skip simms services to national audience SENIOR VICE PRESIDENT, ANN ARBOR SPARK LOCAL ECONOMY LDFA Accomplishments FY 2012-2016: $ million in grants 109 to startups $ million private 241 equity raised

MENLO INNOVATIONS has come a long way COURT INNOVATIONS, a 2013 Boot Camp since Boot Camp. The 2002 graduate, a software graduate, is changing the meaning of justice. 331 638 64 firm known as innovators of high-tech anthro- Its online platform, Matterhorn, connects citizens companies jobs incubator pology, builds software for a range of clients and courts across the country to resolve minor served created graduates from its downtown Ann Arbor office. One of Inc. legal issues. Its platform is currently in use in magazine’s Fastest Growing Companies, Menlo 20 different courts in Michigan and Ohio. The Ann Arbor/Ypsilanti SmartZone LDFA tripled its office space in 2011 and recently opened Court Innovations recently launched a 4(a)(6) provides capital to commercialize products an incubator, the Startup Garage, for early stage fundraising campaign to support its nation-wide developed locally. LDFA grows these entrepreneurs. expansion this year. companies in Ann Arbor, funded by the State of Michigan.

$ $114M in grants & investment 351 teams destination for opportunity

DRIVING ECONOMIC GROWTH The Destination for the Future of Mobility The future of the auto industry is in the Ann Arbor region. Not only are companies like Toyota continuing to invest and expand here, progress is accelerating at the American Center for Mobility at Willow Run. There was a groundbreaking at the site in November, and its U.S. Department of Transportation designation as a national proving ground is an important milestone in Ann Arbor SPARK’s strategic plan to continue to attract and retain advanced mobility companies. Attracting Global Attention, Companies “SPARK is a great partner to foreign Global companies continue to see the beneﬁts of companies like us, who come to the Ann locating in this region. A prime example: SF MOTORS Arbor area to do business. With their will invest more than $10.7 million to open its U.S. assistance, we were able to be quickly acclimated into the local community and research and development operations here. SF Motors, hit the ground running.” a driving force for next-generation electric vehicles, will YONG YANG, VICE PRESIDENT, SF MOTORS create 150 jobs as part of its expansion. Unique Assets Fuel Livingston County’s Economy Talent and available sites are driving economic growth in Livingston County. This year, C&B MACHINERY invested $2.95 million in relocating to Green Oak Township as a way to accommodate its planned future growth.

CHEM-TREND invested $7.7 million in expanding its research and development facility in the city of Howell. It will also add 25 jobs as part of the expansion.

We don’t think about economic development IN 2016, SPARK in narrow terms. Ann Arbor SPARK works with ENGAGED COMPANIES its partners to deliver the funding, incentive, THAT EMPLOY 17,800 and talent programs that grow our economy. Our collaborative efforts ATTRACT GLOBAL BUSINESSES AND CREATE VIBRANT COMMUNITIES where people want to live, work, and play. 28 phil santer projects facilitated SENIOR VICE PRESIDENT AND CHIEF OF STAFF ANN ARBOR SPARK BUSINESS DEVELOPMENT AT-A-GLANCE

Local business expansion Business attraction Business introductions and referrals Site search and selection Meeting Talent Needs Through Growing and Revitalizing Eastern Incentive support Innovative Programs, Collaborations Washtenaw County Talent services To inspire future high tech careers, Pinckney The Innovate Ypsi incentive program provides Community Schools established a CYBER RANGE grants, loans, and other economic assistance to From creating business develop- HUB – computing and networking infrastructure businesses that create jobs and investment in ment opportunities in Ypsilanti to to provide certiﬁcation courses and cybersecurity Ypsilanti. This year, WHITE PINE SOFTWARE establishing a skilled trades training training exercises. The Michigan Cyber Range received an Innovate Ypsi grant to facilitate its program in Livingston County, is hosted and facilitated by Merit Network in expansion to a historic building in downtown SPARK provides the leadership and partnership with the State of Michigan and with Ypsilanti. LANDLINE CREATIVE LABS is using vision needed to help companies the sponsorship of DTE Energy. an Innovate Ypsi grant to redevelop the former plan and grow. Michigan Bell Telephone building. In the past 12 years, SPARK’s business development team has lutions facilitated over 416 PROJECTS ment So Busin nage ess A – growing and retaining businesses t Ma ttrac jec tion in the region as well as attracting Pro ey global companies. rnk Tu

s e P ic r rv o e m S Committed $2.5M and Committed $10.5M and o t te n announced 300 new jobs announced 18 new jobs C le o a m T p & a n n o y i t S c u e c l c e e S s s e Committed $68M and Announced 50 new jobs t i announced 195 new jobs S thriving hubbo of innovation oa

# Ann Arbor6 best cities for entrepreneurs LIVABILITY.COM 2016 TECH TREK:

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% 66 companiescompanie 1,300attendees 30%trekkerskers +

SHOWCASING THE REGION’S INNOVATION CORRIDOR # Ann5 Arbor

TECH HOMECOMING:

out-of-towners from different states

200 oout-of-towners from 17 different states + Innovation, Growth, Success – It’s All Here MARKETING THE # REGION AT-A-GLANCE Creating a global platform for the national Ann4 Arborr best cities average the Ann Arbor region: 5.8x to live in Company successes 2016at-a-glance OF VENTURE CAPITAL DEALS america NICHE.COM 2016 World-class talent THE REGION IS RIGHT FOR COMPANIES & TALENT Career opportunities Startup ecosystem

From company investment to jobs, %of companies are % ensuring that the Ann Arbor region is 41 investing capital 63 2016-2017 Winners on the global map as a destination is PROJECTING LAUNCHING hiring Ability to Engage core to Ann Arbor SPARK’s mission. % SALES GROWTH % NEW PRODUCTS Akervall Technologies Inc. 58 35 # Arbor Assays 1 Caelynx LLC AWARD-WINNING Annnn Arbor CEI Composite Materials NEW-MEDIA APPROACH most educated DNA Software, Inc downtown cities DocNetwork 3.26M social media WALLETHUB.COM 2016 H3D, Inc. impressions innovation corridor Human Element, Inc. REPRESENTS % InfoReady Corporation 12.5M online 84 of investment J. Keller Properties, LLC impressionsions LLamasoft, Inc. 3,000 employees % McCreadie Group, Inc. 508K website best 37of new jobs Menlo Innovations 73K PR hits visits cities for Online Tech & views tech FROM Oxford Companies millennials FOREIGN OWNED FORBES.COM 2016 221 companies Torrent Consulting YouTube views COCOMPANIESMPANIES UISUIS CCorp.orp. 40K

THANA K YOYOU tot our pararttners aand fufunders foor mmakingAnnnArbor SPAARKRK’ss woworkk to grroww businbusinessseses – and ththe econoommy – inn ouur reggiioon a sus cccese s.s 2016 financialHighlights

$1.87M Operating Budget $1.87M OPERATING

BUDGET SOURCES

BUDGETB SOURCES

$1.65M OPERATING Public$ 44% $ 829,000 includes government & municipal funding

$ $ University 18% $ 330,000

5.4M 1.96M Business Accelerator University of Michigan,

Eastern Michigan University, Budget Total B and Washtenaw Community Budget Total College

Private 38% $ 709,000 $ $ $ includes contributions 329K SPARK East Incubator & sponsorships $297K Angel Fund Administration $1,868,000 $596K SPARK Central Incubator $357K Livingston County Support

Current Funders AS OF DECEMBER 2016

PRIVATE SECTOR – $25,000+ PRIVATE SECTOR – under $25,000 Ann Arbor Area Board of Realtors Arboretum Ventures Arbormoon Software, Inc. Barracuda Networks, Inc. Black & Veatch Blue Cross and Blue Shield attract of Michigan other Bodman BusinessWire companies & Chemical Bank Citizens Bank Comcast Business Comerica Bank Disher Design Domino’s Farms Corporation Fifth Third Bank 2016 SPARK Successes 2011-2016 Results company growth million in new company growth projects creating investment 238 projects creating: $ million in new investment commitments 875 commitments announced 5,936 jobs announced startups assisted, 505 received intensive services and have jobs 882 employed 1,935 FTE startups pre-seed investments awarded to assisted retained 52 50 companies ($228k/company avg) 255 companies assisted with 182 of those jobs 8,340 job postings companies received 1,782 intensive services microloans awarded to 72 – those companies incubator 75 companies ($39k/company avg)* currently employ incubator tenants 601 FTE 99 tenants 177 nurtured companies nurtured $ + million community investments 16 leveraged through Federal and State assisted with grants, foundations, and other sources 259 1,281 job postings *Includes PSF, LDFA & Eastern Washtenaw funds

First Martin Corporation Plante & Moran, PLLC City of Ann Arbor GDI Infotech Rudolph Libbe Group City of Chelsea Honigman Miller Schwartz & Cohn LLP SI Company City of Dexter Huntington Bank Thomson Reuters City of Saline ITC Michigan Truven Health Analytics City of Ypsilanti Key Bank University of Michigan Credit Union EDC of Livingston County Liebherr Michigan Economic Development Corporation LLamasoft ACADEMIC PARTNERS Michigan SBDC investmentMannik & Smith Group Eastern Michigan University Pittsfield Township Menlo Innovations University of Michigan Region 2 Planning Commission Michigan Office Interiors Washtenaw Community College Scio Township MLive Media Group Superior Township NSF International PUBLIC PARTNERS TheRide O’Neal Construction Ann Arbor/Ypsilanti Local Development Finance Authority U.S. Department of Commerce Old National Bank Ann Arbor Charter Township Washtenaw County Oxford Companies Ann Arbor Downtown Development Authority Ypsilanti Township Mike Kennedy President Howard Lazarus board of directors Architect DTE Power & Industrial Business Administrator Cynthia Wilbanks (Chair) Lindhout Associates Architects DTE Energy City of Ann Arbor Vice President Paul Krutko Timothy G. Marshall (Past Chair) Andy LaBarre Government Relations President and CEO President and CEO County Commissioner University of Michigan Ann Arbor SPARK Bank of Ann Arbor Washtenaw County David Parsigian (Vice Chair) Trevor Lauer Mark Baker Sava Lelcaj-Farah Partner President and COO SVP Group Manager CEO Honigman Miller Schwartz DTE Energy PNC Savco Hospitality and Cohn LLP Jonathan S. Newpol Greg Dill Ken Nisbet Dr. Rose Bellanca (Secretary) Executive Vice President Interim-County Administrator Associate Vice President for President Truven Health Analytics, Inc. Washtenaw County Research-Tech Transfer Washtenaw Community College University of Michigan Mark Schlissel Bill Fileti David Ruud (Treasurer) President Integrated Health Associates Joanne Rau President University of Michigan President and CEO Vice President DTE Power & Industrial Business Business Banking Team Lead DTE Energy Jim Smith Kenneth C. Fischer Fifth Third Bank President President Timothy G. Marshall (Past Chair) Eastern Michigan University University Musical Society Paul Roney President and CEO University of Michigan President Bank of Ann Arbor Chris Taylor Domino’s Farms Mayor Leigh R. Greden Albert M. Berriz City of Ann Arbor Attorney and Advisor to Tom Shehab, MD CEO the President Principal McKinley, Inc. executive committee Eastern Michigan University Arboretum Ventures Ric DeVore Mandy Grewal Ph.D. Richard B. Sheridan Regional President Cynthia Wilbanks (Chair) Supervisor President and CEO PNC Vice President Government Relations Pittsfield Charter Township Menlo Innovations LLC Kenneth C. Fischer University of Michigan Scott Griffith David Snodgrass President President President and CEO University Musical Society David Parsigian (Vice Chair) Griffith Realty Lake Trust Credit Union University of Michigan Partner Honigman Miller Schwartz Jeff Hauptman Mickey Swortzel Stephen Forrest and Cohn LLP CEO CEO/CFO Professor Oxford Companies New Eagle University of Michigan Dr. Rose Bellanca (Secretary) President Paul Krutko Robert Young Charles Gulash Washtenaw Community College President and CEO VP, Purchasing Vice President Ann Arbor SPARK Toyota Motor Engineering Toyota Motor Engineering David Ruud (Treasurer) & Manufacturing & Manufacturing Bhushan Kulkarni North America, Inc. North America, Inc. President and CEO GDI Infotech, Inc.

SPARK will advance the economy of the Ann Arbor region by establishing the area as a desired place for business expansion and location . . . by identifying and meeting the needs of business at every stage, from those that are established to those working to successfully commercialize innovations.

www.AnnArborUSA.org 201 South Division St., Suite 430, Ann Arbor, Michigan 48104 734-761-9317 888-SPARK01 (772-7501)