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Pitching your company to investors used to be a private affair.
To keep from running afoul of securities regulations, angel and venture capital investing was restricted to so-called “accredited investors.” That was a velvet rope of sorts that kept out anyone with less than $1 million in liquid assets.
But with less stringent regulatory hurdles and the popularity of television shows like “Shark Tank,” investment groups have opened the doors to the public.
The Naples-based Tamiami Angel Fund, for example, held the first such public event in Southwest Florida March 11, called VenturePitch SWFL. About 125 people gathered at the Silverspot Cinema in Naples to hear four young companies pitch investors for capital to grow.
Each company made an eight-minute presentation and responded to questions from a panel of four investors. The investors included: Shayne Faerber, the California-based founder of Mall Maps; David Diamond, founder and president of Naples-based DeAngelis Diamond Construction and Venture X; Richard Molloy, founder and managing partner of Naples-based Gulfshore Capital; and Bud Stoddard, board member of Naples-based Tamiami Angel Fund II and chairman of NextVault.
The panel picked InsulinNG as the winning presentation. The audience also had an opportunity to vote via text messages on their cell phones, and they picked Bun. The winners earned recognition as the “most investible.”
Here's a glance at the four companies that made presentations at VenturePitch SWFL.
At a glance
VenturePitch SWFL
Next event: Fort Myers
Location: Florida Repertory Theatre, 2268 Bay St.
Date: May 21, 5:30 p.m.
Registration and information: venturepitchswfl.com
PikMobile
Headquarters: Naples
Website: pikmobile.com
Chief executive: Scott Relf
The Ask: $1 million
The Pitch: Scott Relf says organizing and sharing photos today should be easier than it is. Consider this: “Where are the pictures you took last Christmas?” he asks.
Relf cites data showing people upload 1.8 billion photos a day to social media sites like Snapchat, Facebook and Instagram. PikMobile will help users create albums, organize pictures efficiently and let users decide who views them and on which social media platform.
“We will ask folks for subscription revenues once they reach a number of photos,” Relf says. The company has found users upload hundreds of photos to albums they create, far more than he anticipated.
Relf estimates PikMobile can attract 100,000 users by the end of this year, growing exponentially to 25 million by 2017. He estimates $6 of annual revenue per user, which would make PikMobile a $150 million company in less than two years. The core user of this service is younger people between the ages of 16 and 26, and advertising might also provide additional revenues.
Relf and his partners have invested $500,000 in the venture over the last 18 months. They seek $1 million in additional capital.
InsulinNG
Headquarters: Naples
Website: insulin-ng.com
Chief executive: Rolf-Peter Milczarek
The Ask: $1.5 million
The Pitch: The forecast of the staggering numbers of people with diabetes is well known, but there has never been an effective test to determine who's most at risk.
InsulinNG developed a self-administered blood test that will help patients, doctors and insurance providers identify people with a higher risk of developing Type 2 diabetes. Rolf-Peter Milczarek, president of the company, says he and his partners have invested $2 million in the business and seek another $1.5 million.
Detecting the risk of developing this type of diabetes early is useful because people can change their diet and lifestyle to prevent the irreversible disease before it strikes. Besides health care providers, Milczarek says the company plans to market the product to insurance companies that ultimately pay most of the costs associated with the disease.
The potential market is huge. Milczarek says the number of diabetics in the United States is expected to hit 44 million people by 2034 and another 128 million people will be at risk. Health care spending to care for diabetic patients will triple to $336 billion in the next 20 years.
Milczarek estimates the company's revenues this year will reach $4.1 million and grow exponentially to $59 million in 2016, $330 million in 2017 and $496 million in 2018.
Bun
Headquarters: Naples
Website: mybun.co
Chief executive: Farouk Al-Shorafa
The Ask: $500,000
The Pitch: Bun is an application that's currently under development and is designed to help parents of young children share photos of their kids in a secure way.
“We're really talking about moms,” says Farouk Al-Shorafa, the founder of Bun. “They're the No. 1 users of social media.”
Bun lets multiple users post photos on a timeline. The parent can share and control who sees the photos. “We're going to help them share it securely,” Al-Shorafa says.
Al-Shorafa says the application will be available to download in April. “We're putting money into it ourselves,” he says. “We want to show that the tool works.”
The app itself will be free, but Bun plans to make money by letting users click on photos that link to the Amazon store. For example, a parent might have a photo of their child riding a
Radio Flyer tricycle. Viewers will be able to click on the tricycle and link to the item on Amazon. Both Bun and the parent will get a percentage of sales and Al-Shorafa estimates that commission could amount to $20 to $40 per user annually.
Al-Shorafa says once the product is available the company will need to publicize it. “We'll need money to market,” he says.
The Interior Designer Store
Headquarters: Naples
Website: theinteriordesignerstore.com
Chief executive: Nick Shepherd
The Ask: $500,000
The Pitch: Interior designers often have to sort through unwieldy catalogs and price sheets to pick and choose the products they sell to customers. Many times they have to fax their purchase orders to any of the hundreds of suppliers.
The Interior Designer Store promises to do away with that antiquated system to help interior designers buy products from a single website. The store negotiated favorable pricing from 200 suppliers to offer 300,000 products.
Because interior designers buy products at a discount and earn money by reselling at retail prices, the site is not available to the public. Only registered interior designers have access to these deeply discounted products, says CEO Nick Shepherd.
Shepherd seeks $500,000 to redesign the website, provide customer service for its growing number of interior designers and boost marketing to encourage interior designers to buy more.
The company posted revenues of $392,000 in the last fiscal year and it posted a 60% growth in orders in the fourth quarter. “This is a proven business model,” Shepherd says.
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