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Lighting Beeman's Fire
Business-system specialist Nelson Martin is poised to take Beeman Holdings LLC from a good idea to a viable, profitable company.
By Sean Roth
Real Estate Editor
You have a great idea that is going to revolutionize an industry. It'll be cheaper than the competitors' products and more convenient for the consumer. But the area between a great idea and a profitable-company is littered with great-idea companies that went up in smoke. How do you transform that idea into money?
For Sarasota-based Beeman Holdings LLC, the answer is Nelson Martin and investor financing.
Beeman Holdings, whose main product runs under the Beeman Lights moniker, is the brainchild of Randy Beeman. Martin says Beeman, the former operations director for WPI Inc. and production manager for Superior Electronics, was strolling the beach when inspiration hit.
Beeman had been working in wire products with WPI, developing a new type of light that uses Chip-on-Board Light-Emitting Diode (COB/LED) technology, a process that creates a light system capable of changing colors via a computer system. Beeman's idea was for a COB/LED system that projects a color, which humans can see but that does not disrupt hatching sea turtles.
Seeing red
Beeman eventually discovered a 650-nanometer red wavelength light that did not attract or disrupt sea turtles. Aside from the color, the COB/LED system would offer lower power consumption and a longer working life than other turtle-friendly landscaping on the market.
Beeman brought the concept to his employer, WPI, as a line of commercial landscape lighting called Beeman Lights. WPI, a defense industry and commercial cable and connecter supplier, was advised by its bankers not to go into a full-scale market launch of the line because of the added costs.
In December, Beeman signed a contract to purchase the inventory and intellectual property of the line from WPI through a long-term debt repayment plan. The new Beeman Holdings company needed capital quickly to make the debt repayment schedule and to pay for the molds needed to produce the product.
Meanwhile, Martin, who made a name running various technology companies, including Irex Medical Systems, Tempra Technology Inc. and International Biotechnologies Inc., had semi-retired. Too bored to give up his business life completely, Martin had turned his attention to consulting startups, such as the Internet companies: W.I.P.S. and BigEye.com.
It was Barney Guarino, a member of the Beeman Holding board and founder, president, CEO and director of Tempra Technology, who thought to involve Martin.
"He introduced me to Randy," Martin says. "I liked the technology and the business opportunities. The obvious problem with consulting was you never stuck around long enough to see if you made a difference."
Startup financing
Martin became chairman and CEO of Beeman Holdings and the man in charge of financing for the startup.
Beeman, president, COO and director of his company, oversees the day-to-day operations. Beeman remains the largest shareholder.
"Randy's background is operational and manufacturing," Martin says. "My background is more in marketing and finance. For the moment, we are predominantly a marketing company."
So Martin sat down with Beeman, and they developed a business plan. Within a few months, Martin began the search for investor funding.
In the first tranche, Martin looked for strategic funding from friends and relatives of company management.
Notable among them, Martin brought in William Hone, senior partner with the New York City-based intellectual property law firm Fish & Richardson PC, to add not only additional capital, but also the help of a corporate attorney to enforce the company's patents. Fish & Richardson has a rich history dating back to the end of the 19th Century, with trial wins involving Alexander Graham Bell's patents.
During the initial fundraising phase, Martin collected about $600,000.
Martin is now on second-phase fundraising and is looking to bring in about $2 million from investors in the Sarasota-Manatee market.
Martin says several of the initial investors include major beachfront property owners.
Overall, the business model is fairly fluid by design.
"We are currently structured as an LLC," Martin says, "but if the investors decided they wanted to take it public, we could go that way. We do what looks to offer the most opportunities for shareholders and management."
Sales pitch
A third option under consideration is for Beeman Holdings to license or sell its patented ideas to other companies.
"There would be a sale price followed by royalties," Martin says, "but that would provide revenue in perpetuity. It could take the form of a license."
Asked about his sales pitch for potential investors, Martin says he focuses on the business basics: a better technology and a large market for turtle-friendly lighting and landscape lighting - estimated to be about $384 million in Florida and more than $4 billion nationwide.
"What I look for is a unique position in the market, preferably a trade secret or patented product," Martin says. "Especially if there is a bar to entry. This is the most desirable alternative (application) on the market."
Martin is trying to sell state organizations and environmental groups on the idea. Earlier this month, the company hosted a seminar with local and state officials and environmental watchdog groups.
"We were very well received," Martin says. "The way the Florida statute is written each county is left to interpret the ordinance as they see fit. Our goal ultimately is to be a model for local ordinances and to be deemed as the best available technology for beachfront lighting."
Finite window
Beeman Holdings officials are also looking at other more-established lighting manufacturers and retailers for partnerships or other distribution arrangements.
"This is about getting more feet on the street," Martin says. "We have a finite window of opportunity. We have to get this to the market as soon as possible."
Martin's ace-in-the-hole for Beeman Holdings' success is its namesake and his inventiveness.
"He is absolutely a creative genius," says Martin. "He has a unique way of looking at things as both a design engineer and production engineer, which allows him to think a project from concept to product. He is able to think in terms of his ability to produce. We have prototypes of other applications, namely a plant-grow light and a medical healing light. He also has an application for a light that would replace neon in signage. He just thinks of these ideas daily, and we patent and protect those ideas utilizing Fish & Richardson."
As for investment, Martin hopes to have $2 million locked up by year's end. That should be enough, he says, to carry Beeman Holdings through profitability, primarily allowing the company to add sales and marketing personnel and to hire a national branding firm. The company is projected to be profitable in its second year.
"We anticipate having another income stream coming in close toward the end of the year," Martin says. "We are finalizing the contract as we speak. I would prefer for now to keep the deal confidential. Right now, we are focusing on turning all the beaches into red-light districts."
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