Funding for clean technology startups has increased substantially in recent years, with 323 U.S. companies raising a total of $4.3 billion in 2011, according to the recently released MoneyTree Report. In the San Diego area, the same report shows that four cleantech startups raised $78 million last year, including $15 million that went to SG Biofuels in the fourth quarter.

But sometimes it’s not enough to be green. Many cleantech startups face a basic challenge in competing against existing products that might not be as environmentally friendly, but are nevertheless well-established—even commoditized—in their respective markets.

In San Diego, sustainable design architect (and Xconomist) Robert Noble has led the development of clean manufacturing methods and technologies for manufacturing a green replacement for medium density fiberboard (MDF) structural panels—a standard material used in building construction and other industries. Noble says the proprietary process makes panels from any kind of fibrous, cellulosic material, such as recycled paper, cardboard, wood chips, corn stalks, and even cow manure. The big difference is that the replacement product, which Noble calls 3-D Engineered Molded Fiber (3DEMF), requires no petroleum-based glues or addititves, or vapor-emitting chemicals.

Ecor samples

Now Noble Environmental Technologies, a company he founded in 2005, is overseeing installation of a 3DEMF factory, showroom, and design lab in downtown San Diego to manufacture the company’s Ecor brand panels. “The tide has turned for sustainable materials,” says Jim Torti, the company’s chief operating officer.

After personally funding the company through 2009, Noble says he now has about 15 individual and institutional investors, and he’s in the process of raising another $4 million to help equip the 10,000-square foot factory and to provide some cash flow. Noble adds that he has no plans to seek venture capital. He says the time required to build large-scale manufacturing and their primary market—the building industry—”doesn’t easily fit the venture capital model for a quick exit,” which is an issue for many cleantech businesses.

Torti and Noble say they wanted to establish the company’s first production plant in an urban, mixed-use setting—an apartment building is across the street—to demonstrate … Next Page »

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[Editor's note: We asked a group of Xconomists to answer the following question: "If you could patent one thing, what would it be?"]

Two patents:

a. A low-cost holographic pad: an “hPad,” which would sit on your desk and project three-dimensional fixed and moving images. It would include a touchscreen-like functionality. This would not only have extraordinary commercial potential, but would provide very high utility for medical diagnoses, building and infrastructure visualization, energy management, and many other individual and societal benefits.

b. A low-cost photovoltaic coating material and application process for virtually any exposed surface, including road surfaces, which when combined with simple conductor fabric could provide low cost, low maintenance, embedded renewable energy generation infrastructure everywhere energy is used.

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Bedford, MA-based Zink Imaging said this week it has closed $35 million in Series B financing led by Genii Capital. The company, whose name stands for “zero ink,” is developing technology for inkless digital printers that can be attached to or integrated with cameras, consoles, and other devices.

Zink’s technology was conceived at Polaroid Research Labs. It uses special “paper” consisting of dye crystals encased in polymer film. The technique essentially puts color-producing materials in the paper itself, which get activated by thermal print heads, like those used in fax machines. The result is a small color printout of a photo or document, say. The company has partnerships with Polaroid, Dell, and other firms to manufacture devices for consumers.

Zink also announced it has hired former board members and Polaroid veterans Mary Jeffries and Ira Parker as co-CEOs. They succeed former CEO Wendy Caswell (also a former Polaroid exec), who led the company for almost six years since it started in 2005.

My colleague Wade wrote an in-depth profile of Zink back in early 2008. At the time, the startup was about to debut its mobile photo printer at the International Consumer Electronics Show (CES) in Las Vegas.

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In a very difficult climate for U.S. solar companies, one Boston-area startup has made some significant progress in solar technology. SiOnyx, a Beverly, MA-based semiconductor company known for its “black silicon” approach to various applications, including solar cells, is reporting today that it has achieved an overall efficiency that is higher than the current industry standard, and more uniform from cell to cell—and that this result should have commercial impact soon.

“We have a solar program that’s starting to have tremendous results,” says James Carey, the company’s co-founder and principal scientist.

When we last caught up with SiOnyx almost exactly a year ago, the company had just closed $12.5 million in second-round venture financing. (Its investors include Polaris Venture Partners, Crosslink Capital, and Vulcan Capital.) The firm’s black silicon technique involves peppering silicon wafers with ultrafast laser pulses to roughen their surface, such that they become more efficient at absorbing near-infrared light.

That means a solar cell made with the technique will absorb more light and, in principle, produce more electricity than one made of conventional silicon. But until now, the company hadn’t proven this to be the case in a manufacturing setting. In partnership with German research institute and chip foundry ISC Konstanz, SiOnyx has demonstrated an improvement of 0.3 percent in absolute efficiency—the ratio of electrical energy out to light energy in—over industry-standard silicon. (The cutting edge of conventional solar cells is just over 17 percent efficiency.)

Big deal? Well, it turns out that 0.3 percent represents roughly a year’s worth of progress in the traditional solar cell industry, says Chris Vineis, the company’s director of solar technology. “Existing solar cell manufacturers can take this [SiOnyx process], drop it into their line, and get an efficiency boost,” he says.

The SiOnyx technique is inserted in the early part of the conventional silicon wafer processing. The method substitutes lasers for chemicals in the initial texturing step, but the rest of the manufacturing process is untouched, Vineis says. The end result, he says, is slightly higher efficiency, potentially thinner wafers that use less silicon, and more uniform efficiency across wafers. Together, those factors could lead to savings of “several cents per watt,” Vineis says.

But it’s still early days for the company’s solar business. SiOnyx, which has nearly 30 employees and says it is still growing, is in initial conversations with potential solar customers. The idea is the company will license its black silicon process to solar cell manufacturers. “We’re not actually making solar cells, which is good for us,” Vineis says. “The industry is in a very tough spot.”

Solar is actually only a small part of the startup’s overall business, however. SiOnyx plans to make about 80 percent of its revenues on its image sensor products and 20 percent on its solar process, Carey says. The image sensor application, which I wrote about last year, uses the same black silicon technology to create fundamentally more sensitive cameras and other imaging equipment.

“We’re more than a one trick pony,” Carey says.

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Here in the Boston area we like hard technologies. We like companies with weird names. We like companies that have vision. Ladies and gentlemen, I present to you: Tenebraex, SiOnyx, and MC10.

They are the micro-cluster of imaging tech companies. They are working on a mix of far-out stuff and closer-in products, with a multiple-focus approach that befits their chosen field. If they were superheroes, Tenebraex would have eyes in the back of its head (panoramic view); SiOnyx would see in the dark; and MC10 would morph into different shapes depending on what it was looking at. Taken together, they just might reinvent the cameras we use every day.

One example: Imagine an ultra-thin camera phone that can take high-resolution, wide-angle photos and video in a dimly-lit bar or restaurant, or outside at night. That’s what combining the companies’ capabilities could do—though, as far as I know, they are not working together.

Several months ago I first talked with Peter Jones, the CEO of Scallop Imaging, which is the fastest-growing division of Boston-based optical tech firm Tenebraex. Why am I telling you this now? One, I’ve been busy. Two, Scallop is about to debut its third camera product in September. Last week, Jones said the upcoming “as-yet-unnamed camera will be the industry’s first multi-megapixel panoramic camera for very low light environments.”

Scallop’s new camera follows in the footsteps of its earlier products: digital and analog versions of a device (see photo below) that stitches together images from five separate camera sensors into a 180-degree, distortion-free, high-res panoramic view, for security and surveillance applications. The advantage over traditional fisheye lenses and pan-and-tilt cameras? Image quality, cost, and convenience, Jones said.

Some recent customers include hotels, museums, retail stores, and the U.S. military. One of the more intriguing applications of the technology lies in robotics. Last winter, a U.S. Army research lab organized a contest at Fort Bragg, NC. A number of teams sent mobile robots into a remote area to beam back images—presumably to check out the surroundings without having to send troops in. The robot that used Scallop’s camera finished in the top two (in terms of meeting its objectives), and it was the only one that didn’t get stuck in the woods, Jones said. He attributed the performance in part to its wide field of view.

My colleague Wade first profiled Scallop Imaging back in 2008. Since then, the division has grown to about 50 people. Tenebraex, its parent company, is no flash in the pan either. The company started in 1992 and is profitable, having invested in Scallop “multiple millions” of dollars in research and development, Jones said. “The majority of our future growth will come from Scallop.”

The company’s upcoming low-light camera overlaps a bit with another local firm. … Next Page »

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We saw a potpourri of tech news in San Diego last week, which included funding for an emerging cleantech startup, new technology from Tealium, and an acquisition by Qualcomm. Our briefing begins now.

—CMEA Capital’s Sumeet Jain offered his perspective on what’s missing, besides capital, from the tech sector of San Diego’s innovation community. Jain, who focuses on deals in software, consumer Internet, digital media, and mobile, says it would help if there were a better way to curate San Diego’s tech companies and entrepreneurs, because, as he put it, “screening companies is not a good use of my time.”

—The IPO window appears to be re-opening to pre-recession levels, with 140 companies nationwide registered for an initial public offering during the three months that ended June 30, according to the latest the “Ernst & Young U.S. IPO Pipeline Report.” In San Diego, the Active Network successfully raised a total of $190 million in its May 24 IPO. Meanwhile Ambit Biosciences withdrew its IPO on June 7 and Fallbrook Technologies withdrew its IPO registration on April 29. The IPOs for two other San Diego companies are pending: semiconductor design company Peregrine Semiconductor and a drug developer, IASO Pharmaceuticals.

—San Diego-based Wildcat Discovery Technologies, a five-year-old cleantech startup, has emerged after raising $7.5 million through a combination of equity, convertible debt, and securities. Wildcat is using high-throughput screening technologies to identify and develop new materials for batteries, hydrogen storage, gas separation, carbon capture, and in other technologies and processes.

—San Diego-based Qualcomm (NASDAQ: QCOM) acquired certain assets related to gesture recognition technology from Sunnyvale, CA-based GestureTek. The move suggests Qualcomm could be moving to develop technology to compete with Microsoft Kinect, computer vision technology developed for the Xbox 360 video game console. Financial terms of the deal were not disclosed.

—San Diego-based Tealium rolled out TealiumiQ, its technology that enables corporate marketing departments to easily manage JavaScript-based tags on their web pages, using a universal tag management system.

—The National Science Foundation unveiled its plans to put $5 million a year into the I-Corps, or Innovation Corps, a program that’s intended to university scientists and engineers build startups around their technologies. As Wade reported, the centerpiece of the NSF program is a $50,000 cash award for 25 teams each quarter and a nine-week crash course in technology entrepreneurship. The program is now accepting proposals and will name its first batch of 25 awardees on September 30.

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Busy day for company financings, as everyone gets ready for the holiday weekend (and unofficial start of summer).

It’s worth noting the step up in dollar amounts as you go from Internet software and social media ($5M), to nanotech/materials ($22M), to cleantech and energy ($57M), to biotech/pharma and life sciences ($91M). Yes, biotech and energy companies require a lot more money than some other fields. Here’s a quick rundown of today’s deals:

—Crimson Hexagon, a Cambridge, MA-based social media monitoring and analysis startup, has raised $5 million in Series B financing from Charles Dolan, founder and chairman of Cablevision Systems (NYSE: CVC). Crimson’s relatively new CEO, Patricia Gottesman, is a 28-year veteran of Cablevision. Xconomy’s Erin Kutz spoke with Gottesman shortly after she took over as CEO in February. I spoke with her predecessor, Scott Centurino, last fall. And our colleague Wade Roush wrote about the Harvard spinoff back in 2008, here and here.

—QD Vision, a Watertown, MA-based developer of nanomaterials for displays and lighting applications, has raised $22 million from North Bridge Venture Partners, Highland Capital Partners, In-Q-Tel, and DTE Energy Ventures, as well as new investors Passport Capital, Novus Energy Partners, and Capricorn Investment Group. Xconomy wrote about the MIT startup’s quantum dot technology last year. You can read more about QD Vision’s latest stuff in this Technology Review story from last week.

—Harvest Power, a Waltham-based cleantech and waste management firm, topped off its recent Series B round with an additional $6 million from new investor SAM Private Equity, bringing the total round to $57.7 million. The startup’s other investors include Kleiner Perkins Caufield & Byers, Waste Management, Munich Venture Partners, TriplePoint Capital, DAG Ventures, Keating Capital, and Generation Investment Management (Al Gore’s firm).

—Radius Health, a Cambridge, MA-based biotech firm targeting osteoporosis (bone loss), raised $91 million in a third round of financing to be used to complete pivotal Phase 3 clinical trials for its drug candidate. The company’s investors include MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, the Wellcome Trust, HealthCare Ventures, and Scottish Widows Investment Partnership, as well as new investors Brookside Capital, Saints Capital, Nordic Bioscience, and Ipsen Pharma. To give a sense of the scale of investment, Radius had previously raised $106.5 million in total. Xconomy profiled Radius back in 2008, when a clinical trial of its drug, BA058, had just started.

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Shocking Technologies, a five-year-old startup in San Jose, CA, that’s developing polymer dielectric materials that help electronics manufacturers deal with electrostatic discharge, has raised $5.2 million out of a potential $6 million in a sale of equity, according to a regulatory filing. Investors in the round weren’t identified, but previous Shocking Technologies investors include Arch Venture Partners, ATA Ventures, Hercules Technology Growth Capital.

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OK, a flying Humvee doesn’t sound like a very green vehicle—but the U.S. Defense Advanced Research Projects Agency isn’t interested in green.

DARPA is interested in improving the safety and lethality of U.S. troops in dangerous environments. And it is willing to pay handsomely for it—to the tune of a five-year, $65 million research program to develop what it calls a “Transformer” vehicle that works like a Humvee on land, but can also fly.

No, this isn’t an Onion article. The goal is to be able to carry four troops and their gear (1,000 pounds) over a distance of 280 miles on one tank of fuel, by any combination of air and land, the agency says. The vehicle must be able to take off and land vertically—meaning it will fly like a cross between a helicopter and a plane (see drawing above). And, oh yeah, it has to be piloted by an average Marine Corps soldier without any flight experience. In other words, it needs to fly mostly by itself.

If it works—a big if, indeed—such a vehicle could swoop over obstacles or tough terrain, and potentially could help troops avoid ambushes and improvised explosive devices in roads. It could also be used for evacuation or rescue missions where it would be very useful to scan the situation from the air and then drop in at the right spot—in urban combat operations, say—while maintaining some mobility on the ground after landing. (You can read more details and speculation in this Popular Mechanics article.)

A key participant in the DARPA program is Woburn, MA-based Terrafugia. You might know it as the “flying car” company, though the firm much prefers the drier term “roadable aircraft.” Terrafugia was founded in 2006 by five MIT-educated pilots, and has been developing a light sport plane, called the Transition, that can be driven on roads and is slated for testing and production next year. The company declined to comment on its involvement in the DARPA program beyond the information in its press release this week. But it’s clear that Terrafugia’s expertise in combining flying and driving vehicles is valuable here.

Indeed, Terrafugia is “one of the few companies that has experience blending the disparate ground vehicle and aircraft requirements into a single functional concept,” says Stephen Waller, the program manager for the DARPA project, in an e-mail. “This is the primary challenge to successfully develop the Transformer vehicle.”

Terrafugia is one of several companies participating in the program—and a few have connections to the Boston area. Virginia-based aerospace firm Aurora Flight Sciences, which has a research and development office in Cambridge, MA, and technical consulting firm Metis Design, based in Cambridge, both have received small-business research grants to work on the project. For its part, Terrafugia is the largest subcontractor to AAI, a Maryland-based aerospace and defense company owned by Textron, a multi-industry conglomerate headquartered in Rhode Island. AAI is one of the two main contractors on the DARPA project; defense tech giant Lockheed Martin is the other (see drawing on left for Lockheed’s competing design concept).

Meanwhile, Carnegie Mellon University in Pittsburgh has been awarded $988,000 to develop an autonomous control system for the vehicle. Sanjiv Singh, a professor in CMU’s Robotics Institute, is leading that effort. And rocket engine company Pratt & Whitney Rocketdyne is working on the engine and propulsion technology for the … Next Page »

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Wilmington, MA-based Electrolytic Ozone, a developer of novel ozone generator technology as a safe alternative to chemical and thermal sanitizers, announced today that it has completed its Series A financing. The company, which is a spinout of the global supermaterials company Element Six, did not reveal the financial details of the first-round funding, but an SEC filing from earlier this year shows that the company raised $4 million of a planned $6 million equity offering, from one unnamed investor. Electrolytic Ozone, which previously operated out of the Cambridge Innovation Center, recently opened its facility in Wilmington, as its corporate headquarters, research and development facility, and manufacturing site. The new funding will go to marketing the company’s technology to original equipment manufacturers for use in appliances like dishwashers, ice faucets, and washing machines.

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Timing is everything—especially in the tech world. If you follow trends in technology, science, or business for long enough, you realize there are very few new ideas. Instead, the combination of the right idea with the right timing and execution is usually the key to success in any field.

Look at all the snazzy tech products that have sprung up around us in recent years—iPhones and iPads, Kindle e-book readers, mobile and gaming apps, GPS and mapping technologies. And some services are so ubiquitous that we don’t even notice them anymore, like Internet banking or online shopping.

It made me think back a decade to 1999-2000, the height of the tech bubble, and consider which of these ideas were already around back then, but either didn’t quite pan out or failed. (Of course, you could go back much further than that, but 10 years feels like an eternity in tech these days.) If you paged through Red Herring, Fast Company, or Technology Review in the late ‘90s, I suspect you’d find many ideas that look a lot like the current tech landscape.

So I informally surveyed a few techies and venture capitalists on both coasts, and have compiled a list of 10 old ideas from the dot-com era that have finally arrived. In some cases, the old product was not positioned correctly, or the technology of the day didn’t support it well. But in most cases, the main issue was the timing of the market—the offering just wasn’t compelling enough at its price point or it cost too much to produce back then. Now times have changed.

This list is by no means comprehensive. If you’ve got a company or idea that I missed—or if you have a different take on the reasons for the turnaround—please leave a comment below.

Without further ado, here are 10 oldies that are new again:

1. Group-buying sites (Mercata vs. Groupon)

This is the quintessential old idea whose time has come. Mercata, the Paul Allen-backed dot-com that withdrew its IPO in early 2001 and closed down, struggled to gain traction in part because it competed for consumer-product deals with e-retailers and big portals like Yahoo and AOL. In the past couple of years, Groupon solved this problem by focusing on one deal per day, but across very different kinds of stores. A down economy, mainstream use of the Web, and lack of competitors didn’t hurt. Now there are more than 100 group-buying sites around the world—mostly blatant knockoffs of Groupon, which is … Next Page »

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“Micro VC” and “super angel” funds are all the rage these days. These terms refer to the emerging segment of venture capital and angel capital in which a growing number of investors are putting small amounts of seed money into very early-stage startups—mainly in Internet software.

How are traditional venture firms reacting to this movement? Many already make seed-stage investments, and others are starting to do more. I recently sat down with Izhar Armony, a partner at Charles River Ventures, which has offices in Waltham, MA, and Silicon Valley, to talk about many things—among them, how he views the micro-VC landscape. Charles River Ventures has had its own formal seed-stage funding program, called QuickStart, since 2006. In this program, the firm invests $250,000 in the form of a loan to each startup, and it has backed more than 30 of them to date. “For a certain kind of investment, it’s good,” Armony says.

Armony’s expertise runs the gamut from mobile software, open source, and software-as-a-service, to intellectual property and alternative energy. He was a veteran of Onyx Interactive, a computer-based training company in Israel, before joining Charles River Ventures in 1997. His startup exits have included Virtusa, iPhrase, ThinQ, Yantra, Guardent, and Oberon. He is currently involved with a number of companies we report on regularly at Xconomy, including Intellectual Ventures, RPX, TerraPower, 24M Technologies (the new spinout from A123Systems), and Vlingo. [Disclosure: The author’s brother-in-law, Mike Phillips, is a co-founder of Vlingo---Eds.]

Here are some excerpts from our chat, about micro-VC strategy and some misconceptions that first-time entrepreneurs may have about building companies. I thought it was particularly interesting to hear these things coming from a well-established tech VC in town:

Xconomy: What do you think about the evolution of micro VC?

Izhar Armony: In general, I think it’s a positive phenomenon for the entrepreneur to have a more approachable source of capital that can write very small checks to begin with. Specifically, for certain kinds of startups—consumer Internet startups, less so [software-as-a-service] companies, but maybe, where within weeks you’re up and running, and the cost to launch is in the tens of thousands, or hundreds of thousands of dollars, but not millions—it’s very good. As Chairman Mao said, “Let a thousand flowers bloom.” From the entrepreneur perspective, it’s a good thing.

But there are two problems. One is that innovation is much broader than Web 2.0. … Next Page »

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A123Systems’ $370 million IPO last September was the shot heard around the world—at least the alternative-energy world. I can personally attest to the fact that energy storage and electric vehicle companies from coast to coast were following the Watertown, MA-based battery maker’s performance very closely. Now they have some new things to chew on.

Late yesterday, A123 (NASDAQ: AONE) reported its second-quarter financial results, and they were a bit disappointing—revenues rose 14 percent to $22.6 million but the firm’s net loss increased to $34.2 million, up from $21.9 million in the same period last year.

The company says it is scaling up its lithium ion battery production for big customers like power utilities, and automakers who want to expand their hybrid and electric vehicle offerings. A123 also plans to open a new manufacturing facility in Michigan, where it has a growing presence.

More interesting, perhaps, is the news that A123 has spun off a separate company, called 24M Technologies, which is being supported by A123 and unspecified venture capitalists, to develop a hybrid energy-storage system (tested in part at MIT) that combines aspects of lithium-ion and flow battery technologies. The news was reported by CNET, Earth2Tech, Mass High Tech, and other media outlets.

And lastly, A123 said it has dropped out of Chrysler’s electric vehicle development program (which had been announced last year), because of a competing bid from an unnamed technology vendor. To balance that news, the company said it has been chosen by an unnamed major automaker to be the sole development partner for an expanded hybrid-electric vehicle line.

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There has been plenty of tech-business news in the past week to put Seattle on the national radar. But it takes years to understand the innovation community here; I’ve only scratched the surface so far. So, in honor of my colleague Thea’s first week on the job, I thought it would be useful to look back at some of the more interesting stories I wrote (if I do say so myself) in Xconomy’s first six months in Seattle, back in 2008—and to think about what they mean now.

The stories span software and IT, advanced materials, energy and cleantech—and coffee. Many of you didn’t see them the first time around, but perhaps they’ve become more interesting with a couple years of hindsight. Here they are in chronological order:

1. Modumetal Grows Nanotech Metals for Military, Aiming to Make Parts for Your Car

This Seattle company has burst onto the scene in the past couple of years, with a method to produce a new kind of metal that could potentially disrupt the steel industry. Modumetal continues to grow, accumulate new customers and partners, and just closed a second round of venture funding this month.

2. With Intellectual Ventures, Nathan Myhrvold Out to Create “Invention Capital” Industry—and Reinvent Invention in the Process (Part 1)

My first sit-down with Nathan Myhrvold for Xconomy was an eventful one. He laid out his plans for Intellectual Ventures in great depth, showed me the company’s new lab, and talked about everything from the physics of ping-pong and quantum cosmology to “invention capital,” global expansion, and a nuclear power project (what would become TerraPower). In part two of the interview, he spoke for the first time about his team’s far-out approach to stopping hurricanes—and about new kinds of malaria intervention, and geo-engineering to combat global warming.

3. Tableau Raises $10M in Second Venture Round, Wants To Be the Adobe of Data

This is one of the fastest-growing and most successful startups that people around town need to know about. Tableau makes data visualization and analytics software for companies, organizations, and consumers, so they can make sense of increasing amounts of data and pull out useful trends and patterns. CEO Christian Chabot told me the story of the company and where it’s headed. So far, he’s been pretty much on target.

4. Second Avenue Partners’ Keith Grinstein Dies at Age 48

Obviously this was not one of our favorite stories. Nevertheless, this tragedy is part of the fabric of the innovation community, and we need to report this kind of news with urgency and sensitivity. Nick Hanauer and Michael Butler wrote in with their thoughts on Keith Grinstein’s passing.

5. Founder’s Co-op Gets Warm Reception, Wants Startups That Will Survive Cold Recession

An increasing amount of early-stage tech startup activity these days is centered around Seattle-based Founder’s Co-op, started by Andy Sack and Chris DeVore. In 2008, Sack told me about the goals of the group, and its plans to invest in small companies and provide mentorship to … Next Page »

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Things might be starting to turn around in the Seattle-area economy, but that doesn’t mean startups are raking in the dough. It’s becoming clear that, with the exception of maybe one or two big deals a month, venture funding for young companies in the Northwest has stabilized to a much lower level than we were seeing two or three years ago.

Last month, companies in Washington state raised a total of $36 million in seven venture financing deals. That’s the official tally from our partner CB Insights, a New York-based private company intelligence platform and information services firm. The stats don’t include financing deals worth less than $1 million, which are becoming increasingly prevalent, especially for seed-stage software startups (more on that below).

The May numbers are fairly consistent with the $30 million raised by seven companies in April (not counting the $315 million Liberty Dialysis deal), and are up a little over the $21 million raised by three companies in March. Four of the seven financings in May were Series A rounds, and the deals were fairly evenly distributed between Internet software, mobile, and healthcare companies.

The biggest deal of the month was a $12 million Series D funding round for Spring Wireless, a Brazilian telecommunications company that set up its North American headquarters in Seattle early last year. Other notable financings included healthcare startup Coronado Biosciences raising a $7 million Series A round, and advanced materials firm MicroGreen Polymers getting $6.9 million in Series B funding to accelerate its entry into the consumer market, where it will introduce products like recyclable coffee cups and packaging materials that use less plastic than conventional items.

Meanwhile, a couple of early-stage Internet startups exemplified the trend we’re seeing of software companies doing more with less money upfront. Off & Away, a hotel-auction travel site incubated by Madrona Venture Group, and SeniorHomes.com, a healthcare resource site for seniors led by CEO Chris Rodde, each raised a little over $1 million in first-round funding. And a number of companies raised smaller rounds that didn’t show up in the current stats (more on that in a separate story).

That, in fact, is becoming the modus operandi for most young software and tech companies: bootstrap or raise a small angel round, get some market traction and revenues, and try to raise more money after that. The angel and VC community has already been adjusting to this dynamic.

Here is the list of venture financings for Washington state companies in May:

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Michigan State University spinout InPore Technologies makes a particle that, when mixed with other materials, makes plastic stronger, lighter, cheaper, and more flame-retardant. Yeah. I know. Doesn’t sound all that sexy. It really is, but we’ll get to that in a moment.

First, the reason the East Lansing, MI-based company recently earned a $100,000 paycheck from the Great Lakes Entrepreneur’s Quest business plan competition is not only because it has great technology to sell, but because it has people who know how to clearly describe, in the words of CEO Gerry Roston, “the story.”

The reviewers for the competition who singled InPore out of the pack said the company knew what it was doing and why they were doing it. In turn, what attracted Roston to the company about 18 months ago was its founding scientist, MSU chemistry professor Thomas Pinnavaia.

“This is the single most critical thing for any startup,” Roston says. “It’s not the technology, it’s not the money, it’s the people.”

Nothing against academics in general, Roston says, but, for a professor, Pinnavaia “is an extremely personable, extremely approachable person. He’s passionate about what he does, he’s open to learning from others, he wants to learn from others, he wants to make this happen. And that enthusiasm is the other thing which really drew me to the business.”

So, according to Roston, who has made a career out of mentoring early-stage companies, the key to tech startup success is to have a plan and people you can believe in. Then, of course, there’s the technology itself. It’s a small thing, really—on the nanoscale, actually. But, warns Roston, don’t call InPore a nanotechnology company. That “nano” prefix is the “kiss of death” in the marketplace these days, he says.

The company’s proprietary particle goes by the brand name Silapore. Most of the plastics you interact with everyday—from your car to the phone or computer you’re reading this story on—contain fillers that do different jobs. They make the product stiffer or add color, for example. But the fillers, themselves, can also make the plastics weaker. Silapore particles, according to InPore, have such a unique morphology—or, arrangement, texture, or topography—that it makes products stiffer, stronger, lighter, and even flame-retardant and scratch-resistant.

The scratch-resistance and lighter weight make the material attractive to the automotive … Next Page »

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Just because I’m not going to be Seattle editor anymore doesn’t mean I won’t miss these roundups. In the past week, we’ve seen some very interesting deals news from Northwest companies in the fields of energy, materials, and software. Here were a few of the top highlights.

—Nuclear-power startup TerraPower, based in Bellevue, WA, raised a whopping $35 million in venture funding from Charles River Ventures and Khosla Ventures. OK, $35 million might be chump change to Bill Gates and Nathan Myhrvold, who are also invested in TerraPower, but it could make a big difference in the company’s ability to develop a working prototype of its traveling wave reactor, which promises cleaner, cheaper, safer, and more plentiful nuclear power. Don’t expect that to happen before 2020 though.

—Polaris Venture Partners, which is based in the Boston area and has a Seattle office, closed on $233.8 million of a planned new $400 million fund, as Ryan reported. Polaris is known for its investments in companies like Alnylam Pharmaceuticals, Akamai Technologies, and GlycoFi, as well as for starting Dogpatch Labs, a community program to support entrepreneurs in San Francisco, New York, and Cambridge, MA.

—Luke previewed Bellevue, WA-based mobile software firm Motricity’s impending initial public offering this week. The IPO could net more than $85 million, according to investment bank Renaissance Capital. Motricity’s biggest stockholders are Advanced Equities, billionaire investor Carl Icahn, Technology Crossover Ventures, and New Enterprise Associates. The company was founded in 2001 in Oklahoma and moved to the Seattle area in late 2007, when it acquired the mobile division of Infospace for $135 million.

—Has there ever been a less-talked-about $1.4 billion deal in Seattle? That’s what … Next Page »

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The past couple of weeks have been slow-going for company financings and acquisitions in the Northwest. We’ve seen some high-profile personnel moves at Microsoft, as well as at Accel Partners and Founder’s Co-op (see below), but little in the way of money changing hands. Nevertheless, there was some action in the worlds of software, advanced materials, and medical devices. Here were the most notable deals:

—Arlington, WA-based MicroGreen Polymers raised $6.9 million in Series B funding, from new strategic investor Waste Management (NYSE: WM), based in Houston, TX, and existing backers WRF Capital, Northwest Energy Angels, and other private investors. MicroGreen is a spinout from the University of Washington that makes advanced plastics that use less material than conventional plastics, such as a special kind of thermally insulated, recyclable coffee cup. The company will use the new money to accelerate its move into the consumer market for food-service applications.

—Bothell, WA-based SonoSite is acquiring Visualsonics, based in Toronto, for $71 million, as Luke reported. SonoSite (NASDAQ: SONO) makes portable ultrasound machines. The company is looking to use Visualsonics’ ultra high frequency ultrasound technology to image microscopic details like the inside of blood vessels, all with a miniaturized, portable device.

—RF Surgical Systems, a Bellevue, WA-based developer of medical device technologies, raised $2.5 million in equity financing out of a $5 million round from existing investors. The company was founded in 2004 and has raised more than $20 million since its inception. It makes an FDA-approved system for detecting and preventing retained surgical sponges in patients undergoing surgery.

—Not a deal per se, but a trio of notable dealmakers are on the move. Rob Glaser, the founder and former CEO of Seattle-based RealNetworks (NASDAQ: RNWK) has joined Accel Partners, the Silicon Valley-based VC firm, as a part-time venture partner. Glaser will remain in Seattle, and is looking to help connect Accel with Seattle-area entrepreneurs working in digital media, social media, and mobile technologies.

Not to be outdone, Geoff Entress, the prolific and popular angel investor (and VC with Voyager Capital), has joined Seattle-based Founder’s Co-op as a managing partner, where he will help ramp up the firm’s seed-stage tech investments. And Ron Wiener, the founder and former CEO of Earth Class Mail, has formed a new group, Seattle-based Venture Mechanics, which is looking to reshape the process of starting tech companies from the ground up—beginning with three new startups he introduced last week, in the areas of mobile, business software, and Internet.

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Score one for materials science. Arlington, WA-based MicroGreen Polymers said today it has raised $6.9 million in Series B funding, including a new strategic investment from Waste Management (NYSE: WM), based in Houston, TX. Existing investors WRF Capital, Northwest Energy Angels, and other private investors also participated. MicroGreen says the money will be used to hire more engineering, sales, and marketing staff, and to expand the company’s commercial production capabilities for consumer products.

MicroGreen Polymers spun out of the University of Washington in 2002, the brainchild of graduate students Greg Branch and Krishna Nadella. The idea was to use high-pressure liquid carbon dioxide to generate tiny microbubbles in plastics to expand the material and allow manufacturers to maintain most properties of regular plastic, while using a lot less of it. The MicroGreen technique also creates an insulating layer of air inside the plastic, which can protect people from burning themselves while holding their morning coffee, among other applications.

The company raised $1.6 million last July. But the new money means MicroGreen can accelerate its entry into the consumer market. Later this year, the company says, it will begin selling sheets of its material for food-service applications like packaging. It will also sell a thermally insulated beverage cup that is recyclable and made from recycled material.

“We’re excited to accelerate our growth plans for the commercialization of our technology and products,” said Tom Malone, CEO of MicroGreen, in a statement. He cited the potential of MicroGreen’s technology to “dramatically reduce the environmental footprint of plastics, help our customers reduce raw material costs and transition to more post-consumer recycled materials, and generate value for our company.”

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1. Focus on areas of competitive advantage such as Michigan’s global leadership in the automotive industry where innovation in transportation, energy, software and materials can take advantage of existing technologies, market know-how, industry talent and potential investment synergies.

2. Establish a local venture and/or angel fund community in Michigan to scout the local deal flow and attract co-investors from other markets. Providing state funding support for new Michigan-based venture firms could help jump-start fund formation in Michigan. At the same time, take advantage of the regional proximity to venture communities in Chicago, Madison WI, Minnesota and Toronto. There are many national groups that host events (Xconomy, National Venture Capital Association, TechStars, others) at technology centers around the country — make Michigan a “can’t miss” destination on their calendar!

3. Promote the University of Michigan and Michigan State University as growing hubs for thought leaders, entrepreneurial culture and progressive business climate. Then deliver on these claims by making university technology available for license on competitive terms.

4. Invest in an “ecosystem” to serve the startup community. Experienced lawyers, bankers, advisors, and regulatory and intellectual property experts are all part of the ecosystem that increase the chances of success for a startup. Understanding the “industry standard” can make deals easier to negotiate and foster further capital infusions into the region. Whether through a trade association, a university or an existing technology or angel investor forum, offering this ecosystem a venue for networking and access to startups is also an important step.

5. Get the state government more involved. This is something Michigan already has quite a bit of experience with, and should build on its existing momentum. The Smart Zones effort has evolved into successful government/private sector partnerships and incubators, like TechTown, Automation Alley and Ann Arbor SPARK. Consider an early-stage funding source from the state (such as Washington’s Life Sciences Discovery Fund). Technology zones that offer free space, incubation services or tax credits, or a trade association that specifically promotes an area of industry development are an effective way to stimulate startup creation. Implement tax incentives to accelerate investment in certain industries or regions of the state. Government support for the startup business climate is critical.

[Editor's note: To help launch Xconomy Detroit, we've queried our network of Xconomists and other innovation leaders around the country for their list of the most important things that entrepreneurs and innovators in Michigan can do to reinvigorate their regional economy.]

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