December 2014 Holiday Edition Newsletter

December 2014 Holiday Edition Newsletter

16:56 03 December in Uncategorized


Angel Options Blog – by Ken Kousky

Angel Options: The growth of Angel groups around the world has been facilitated by the use of standardized methods and tools. This has been vital in creating a more efficient seed-capital market. It has expanded startup opportunities around the country and not just in silicon valley.  However, it has also been very limiting by targeting only equity investments in companies likely to be acquired quickly.

Simply put, we don’t see many companies that fit the tools and techniques we’ve had available. Many of our regional companies have no intention of selling but still need growth capital. While they may lack the historic cash flow (remember, they want the money to create greater cash flow) or adequate collateral, they are still vital to our regional economy and they represent attractive investment opportunities.

To service this sector, BWA is establishing a relationship with a regional bank that will create subordinate notes.  These notes will be matched by the banks senior debt. We would purchase the subordinate notes at the time of closing.  We believe that we would place $1,000,000 in notes annually with yields of 8 – 12%.  The notes would continue to be serviced by the bank and will typically have a five year maturity.

If you would have interest in participating, we are considering packaging the first 250 units at $20k each. Contact me at, or Judy Morrison,, if you would like to learn more.

And speaking of non-traditional deals, our first locally developed medical device opportunity, Joint Purification Systems, presented at our dinner event last month at the Saginaw Club.  The issue – this is a project, not an ongoing business.  It’s like investing in an oil well, not buying a drilling company.

A Special Thank You to Blue Water Angels Members

To those who attended the BlueWater Angels Annual Meeting on Thursday, November 20, I wish to thank you for joining me in an evening of networking, food and fun to celebrate another year of growth in our Angel and entrepreneurial community.

It was an exciting evening with over 50 in attendance.  Creation of a new reporting tool for investors was introduced…a dashboard that will aid in providing members with a better view of their portfolio.  In addition, portfolio companies gave a brief presentation and company update for members. A special salute to our portfolio companies for their milestone accomplishments!

BlueWater Angel members are known to be enthusiastic, committed and passionate entrepreneurs!  Thank you all for making our Annual Meeting an overwhelming success, and I look forward to another year of collaboration and growth in 2015!

Open Deals

RetroSense Therapeutics – Expect open IND and Series B in Q1, 2015.

RetroSense is a biotechnology company at the forefront of developing optogenetic therapies for vision restoration. These game-changing gene therapies are designed to restore vision in patients suffering from blindness due to retinitis pigmentosa (RP) and advanced dry age-related macular degeneration (advanced dry-AMD). RST-001 is the company’s lead product. There are currently no FDA approved drugs to improve or restore vision in patients with these retinal degenerative conditions. In preparation for IND-enabling safety studies, RetroSense initiated and completed manufacturing and testing of vector suited to these studies.  Since then, the first of two stages of clinical “GMP” manufacturing has been started with a completion of both stages anticipated in Q1 2015. The company is on pace to finish IND-enabling work in Q1 2015 and initiate human clinical studies in Q2 2015.  RetroSense Therapeutics is led by a team of seasoned veterans with experience in developing some of the most successful drugs on the market and numerous successful new business ventures.

Deal Lead:  Ken Kousky, BWA,

foodjunky – Round is open.  Elements of the business plan adjusted to address BWA concerns.  John Strobel and Terry O’Brien are leading the diligence work.

The company’s business model which charges the end customer rather than the restaurant differs from others in the space by accommodating the needs of both restaurants and customers.

Deal Leads:  John Strobel & Terry O’Brien /;

Deals in the Pipeline 

Joint Purification Systems (JPS)  – Term Sheet is in negotiations / debt syndication (see President’s Blog above).

The company is founded by a local Orthopedic Surgeon, Brian de Beaubien, MD, who specializes in replacement of artificial knee and hip joints that have become infected. He has invented a device that has captured the attention of both European and American surgical experts. The device provides a perfusion solution to infected joint spaces to expedite replacement joint surgery. With an aging population the incidence of joint replacement therapy is predicted to continue with significant growth.

Greatest Concentration of Venture Capital? Not Where You Think!

Capital is an important input to growth – as is raw talent.  But so are customers, acquirers, experienced talent, “critical mass”, and (early on) community leadership.  Follow the link below for an interesting article talking about the greatest concentration of venture capital per capita…comparing Ann Arbor to the Bay Area.

Silicon Valley, meet Ann Arbor, Michigan. Yes, Michigan:

Save the Date! Join us for these upcoming events!

*BlueWater Angels & MidMichigan Innovation Center Partner to Present Workshop, Tuesday, December 9!   

Join SME’s for a workshop on Due Diligence and Term Sheets ~ stay for MMIC’s Holiday Open House immediately following the workshop!

Due diligence and term sheets aren’t just common practice – it’s common sense, and crucial to ensuring that your investments in early-stage companies are informed and worthwhile.

Date/Time: Tuesday, December 9

Time:  2:00-5:00pm

Location:  MMIC, 2007 Austin, Midland, 48642

To Register:  Visit,

*Join Us for MidMichigan Innovation Center’s Annual Holiday Open House, Tuesday, December 9!

You’ll meet MMIC staff and engage with hard-working member startups that are transforming Michigan’s economy. You’ll also see our newly remodeled office space which gives our members an even better place to innovate.

Date:  December 9 (Tues)

Time:  5:00-8:00pm

Location:  MMIC, 2007 Austin, Midland, 48642
To RSVP:  Call MMIC Receptionist, 989-839-2333, or visit

*Meet the Entrepreneur Who Secured Michigan’s Largest VC Round…join us on Wednesday, December 10!

Join Mina Sooch, President and CEO of Gemphire Therapeutics, as she explains go-to-market strategies that have led to her extraordinary success in life science entrepreneurship.  Prior to founding Gemphire Therapeutics, Mina helped guide ProNAi and its groundbreaking cancer-fighting drug to more than $70 million in venture capital – including the largest single round of venture capital in Michigan history.

Date:  December 10 (Wed)

Time:  Noon-1:30pm  (Lunch Provided)

Location:  MMIC, 2007 Austin, Midland, 48642

You may attend the session in person or online (details on MMIC registration page),

*Join us for Pitch Night at Apple Mountain…Wednesday, December 10!

Presenters include:  Reforma Group, Gemphire Therapeutics, Authenti-APP.  (An overview on Angel Investing for potential new members precedes the pitch night program from 4:30-5:30pm.)

Program Schedule:

4:30-5:30pm – Angel Overview for potential new members.

5:30-6:00pm – Hors d’oeuvre Reception / Cash Bar.

6:00-9:00pm – Entrepreneur Presentations.


Apple Mountain
Conference Center (West Ballroom)

4519 N. River Road, Freeland, MI  48623


Cost:  Non-Members, $20pp.

Karen Letain
No Comments

Post A Comment