Madison startup raising pre-seed round
Madison-based renewable chemical startup Pyran LLC has received a $120,000 investment from new angel investor group Wisconsin River Business Angels.
Established a couple of years ago and based in Plover, WRBA is a subsidiary of Midwest Wealth Ventures LLC. This is its second startup investment, having last year invested in Madison personal finance software firm CountAbout. It also recently invested in gener8tor Fund VII, said Leon Ostrowski, chairman of MWV.
Pyran makes a compound that can be used to make environmentally-friendly paint and plastic chemicals. The technology, which uses catalytic engineering to convert a feedstock derived from corncobs, was developed by University of Wisconsin student Kevin Barnett and his professor, George Huber, with a three-year, $3.3 million U.S. Department of Energy grant that concluded in April 2018. The company was formally established in 2017 as part of gener8tor’s gBETA program, said Barnett, president. It has also received a total of $675,000 in funding from the Wisconsin Economic Development Corp. and the SBIR program since inception.
Pyran is planning to close this pre-seed round at $250,000 next week, and begin working on a seed round. It plans to use the pre-seed funding to hire an experienced chief executive officer, and has set a goal to open a large-scale production plant by 2024.
“We’re a renewable chemical company and I think (investors) really saw the value of what we’re trying to do, which is replace oil-based chemicals with renewable chemicals,” Barnett said.
“What was unique about it that got our attention was No. 1, the ability to have a sustainable source for product that was coming from petroleum,” Ostrowski said. “A lot of the companies that make paint resins and things like this are looking for ways over the next several years or decades to convert to green products, so I think this gives them a unique avenue to do that.”
Ostrowski in 2003 founded Central Wisconsin Business Angels, which has had a 20 to 25% return on its investments. He is also vice chairman of WiSys Technology Foundation and chairman of the Wisconsin Institute of Sustainable Technology. MWV president Jeff Ebel is adjunct instructor of entrepreneurship at the University of Wisconsin-Stevens Point and Fox Valley Technical College, and owner of Ebel Consulting.
WRBA’s goal is to bring more attention and investment to startups in the middle of Wisconsin.
“We’re looking and trying to get more things going in central Wisconsin,” Ostrowski said. “We know from my previous group that there’s opportunities there but they’ve got to become aware that we exist and maybe there’s something we can help them with.”