Two startups awarded state money for growth

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Updated: February 9, 2012 10:50AM

Two technology start-up companies that are boosting job growth won state support Tuesday when Gov. Pat Quinn announced the state’s $575,000 investment in them.

Buzz Referrals, which started in May 2010 to help businesses expand through social media and friends-of-friends marketing, received $75,000 of the total and has raised another $535,000 in other recent angel investments. Buzz’s other investors, all based in Chicago, are Polsky Holdings, New World Ventures and Scott Kluth of Coupon Cabin.

Buzz Referrals employs four people, is recruiting for two positions in sales and marketing, and expects to hire 16 more in the next year-and-a-half, said Jordan Linville, 30, co-founder with Jonathan Kelley, 29. The company is growing because businesses are seeking help in using social media and tracking their marketing spending, Linville said.

The second company, AuraSense Therapeutics, an Evanston-based biopharmaceutical nanotechnology firm started early last year, expects to use the investment to create “dozens” of new jobs in the next three years and boost development of technologies that manipulate genetic information inside cells to cure disease. The company, which employs 12, is one of more than 20 companies that have emerged from the International Institute for Nanotechnology at Northwestern University. Those companies employ hundreds and have raised more than $600 million in total in private investment in the past decade, said Van Crocker, vice president of AuraSense.

The state invests money from its own investment portfolio, called the Invest Illinois Venture Fund, into innovative companies in Illinois that show high growth potential. The fund takes no more than a 25 percent equity in any one company.

Quinn announced the investments at Excelerate Labs, a Chicago-based boot camp for start-up companies that provices seed investment, free office space, mentoring and other support. Excelerate has graduated two classes, each with 10 start-up companies. Those 20 companies have collectively raised more than $12 million in private funding and together employ more than 100 people, said Troy Henikoff, CEO and co-founder of Excelerate Labs.

“It is great for the illinois economy and great for getting a return on the state’s money, so it’s a double bonus,” he said.

Applications for a new class at Excelerate Labs open Wednesday at exceleratelabs.com.