Cherrystone invests in two startup firms

Providence-based Cherrystone Angel Group announced Monday that it has invested in two early-stage technology companies, bringing to five the number of similar investments it has completed since last fall. Cherrystone invested $210,000, as part of a larger investment round, in Providence-based Creative Circle Advertising Solutions Inc., which provides a Web-entry classified advertising system for media companies that helps users write ads. Also investing in the round were The Slater Technology Fund and Walnut Ventures Associates.

Creative Circle will use the new funding to provide additional working capital to support company growth. Fred Engel, a Cherrystone member, said Creative Circle “found a unique approach to delivering ad content and entry from a Web environment. Their ability to attract attention from newspapers and TV is a good indication of their ability to spearhead classified advertising on the local level."

Cherrystone also invested $190,000 in SmartCells Inc., an early-stage biotechnology company based in Beverly, Mass., that is developing a once-a-day, self-regulating, injectable insulin formulation for treating diabetes. The SmartCells investment was part of a larger B round of funding that included other Boston-area angel investment groups, including the Keiretsu Forum, Angel Healthcare Investors, and the Beacon Street Angels.

SmartCells will use the B round funding to support pre-clinical (non-human) testing and manufacturing development.

“What we liked about SmartCells was its innovative approach to a major disease class, the quality of its science and people, and the business model it has developed,” said Robert J. Manning, president of Gray’s Point Investments LLC and a member of Cherrystone.

The two recent investments were the fourth and fifth that Cherrystone has made since last fall. When the group was formed in early 2004, it expected to make approximately two investments a year. Recently, the group decided to look for additional investment opportunities in response to members’ interest and ability to make more investments.

Creative Circle is based at the Center for Design and Business in Providence and was borne out of a joint venture between Creative Circle Media Consulting, which provides consulting, design and training services to newspapers and Sprintout, a Web content management company.

SmartCells is developing SmartInsulin, the first glucose-responsive, injectable insulin formulation. It addresses diabetes therapy in achieving tight blood glucose control to reduce the incidence of serious and costly medical complications. SmartInsulin can provide this control since it releases insulin in response to high blood glucose levels and stops releasing when those levels return to normal.

Founded in 2004, Cherrystone provides early-stage capital to startup companies. Since its founding, Cherrystone has invested in six companies: Advanced Image Enhancement Inc.; Creative Circle; Finale Dessert Co.; Ion Signature Technology Inc.; Narragansett Brewing Co.; and SmartCells.

Cherrystone is comprised of about 50 members from the Rhode Island community and invests in companies that possess a business plan and leadership to satisfy a well-defined market opportunity, the group said.

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