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Executive Summary
Organization. Tamiami Angel Fund Industry. Venture capital, angel capital Key. Four companies vied for investor attention at a recent event.
Financial adviser Tim Cartwright included some truth-in-labeling Nov. 10 in his kick off of Tamiami Angel Fund's Q2 VenturePitch SWFL.
Angel fund members can gain huge returns on their investments, he says, but more often they encounter great ideas that fizzle once in the market. It's the highest risk endeavor around, Cartwright says. He offered that advice in his opening remarks to a capacity gathering in the auditorium of the Conservancy of Southwest Florida in Naples.
The evidence is in a tracking of 2016 financials for angel funds: Seven out of 10 investors either did not make money or lost money, Cartwright says. “You've got to get all your returns in that 30%. That's why you're looking for home runs,” says Cartwright, chairman of the Tamiami Angel Fund, a regional group that is in its third round of investments.
Four companies made pitches for investments at the event.
Naples
The Prayer Deck
Roy Clark
Chief Executive
The Pitch: An app to serve an increasing number of people who want to pray for each other.
“More than half the people in America pray every day,” says Roy Clark, a former minister and founder of The Prayer Deck.
Clark's venture has raised $130,000. He expects to break even in three years and gain $60 million in sales and a profit of $17 million in five years. Year five is also when the company expects to put itself up for acquisition by any of the large players in the faith-based market.
Clark's presentation won the “Investor Award” in judging by a five-member panel at VenturePitch.
The venture is based on something everyone grew up with — playing cards. These, though, are virtual.
Perhaps you have a family member or friend you want to connect with either spiritually or emotionally. With a $1 monthly subscription, you can send that person a virtual “card” that will have your picture on the front and a prayer request on the back. Or the sender can send a prayer or inspirational message. The receiver becomes part of the sender's prayer deck by uploading a photo of himself onto the card and sending it back.
The sender has the option of having the message disappear within a few seconds of the receiver uploading it.
“When someone has uploaded the prayer, the app will let you know,” says Clark, whose venture is in beta and will be integrated into social media.
The sender can select a prepared prayer or inspiration, or write his own.
The Prayer Deck's initial market is the nation's 227 million Christians. The app, though, will be scalable to other faiths, Clark says.
Clark estimates the company will spend $1.50 to acquire each of its customers.
The Prayer Deck team has spent recent months recruiting big-time partners in America's faith community.
These include Biblica, online publisher of the New International Version of the Bible, and its 5 million customer email addresses; International Prayer Day organizers and their 1 million emails addresses; Man in the Mirror ministry and its 1,000 support churches; and the Young Life ministry and its 60,000 volunteers.
The idea behind The Prayer Deck is for subscribers to reach out to family and friends, Clark says.
“This is highly relational,” he adds. “If you have 24 cards in your prayer deck, you're going to do great.”
Naples
Local Greens Co.
Oskari Kariste
Chief Executive
The Pitch: A patented method for indoor, hydroponic growing of lettuces and herbs year round in Florida and other regions with hot and humid climates. In addition to high yields from rapid growth, the produce will have the added appeal as locally grown.
Major selling points: Local Greens Co. cites: 95% less water, 25 times less land and 10 to 20 times more produce.
Lakeland-based Publix, with annual sales of $32 billion and 772 stores in Florida, has handed Local Greens a letter of intent, founder Oskari Kariste says.
“They want to see the product,” before committing further, he adds.
He sees a coming agricultural revolution akin to the one that industrialized the nations of the world. His part in it will be Local Greens, holder of a patented cooling system that provides a 12-month growing season and higher yields.
“Two billion people live in a region where you can't grow year round,” says Kariste, whose Local Greens won first place Nov. 10 in audience voting at Tamiami Angel Fund's Q2 VenturePitch in Naples.
Florida's hot, humid summers limit its growing season to around eight months, even for indoor growing. In turn, Floridians must rely on imports, a circumstance Kariste says he can change with his patented method of using droplet curtains inside fully enclosed greenhouses. This, he says, cools the air and creates the high carbon dioxide levels necessary for rapid production.
Local Greens bought 15 acres in Collier County for greenhouses that will be in full production by July, according to Kariste.
As Local Greens expands to be closer to multiple markets, the production will mostly be in greenhouses covering 2.5 acres, says Kariste, who plans to franchise the company's technology.
He projects each greenhouse can generate $16 million in annual sales that carry a profit of around $5 million.
A key is fast growth created by abundant carbon dioxide, a byproduct of the water flow and the fully enclosed growing structure. Even the humidity inside the greenhouse contributes by helping create the continuous water flow, Kariste notes.
Kariste says partners in his native Finland have used the technology for the past 40 years and have helped cut in half the Scandinavian country's imports of lettuce and other greens.
His pitch to venture forum came two days after Florida voters approved a medical marijuana amendment. Will he add that plant to his crop list?
“We'll see,” he says.
Fort Myers
ecomedes
Paul Shahriari
Chief Executive
The Pitch: A digital procurement platform that connects buyers with manufacturers of quality sustainable building products. Procurement executives also get the benefit of a simplified way to analyze the economic and environmental return-on-investment for products designed to meet sustainability standards.
“We have created an algorithm that allows the user to find the products based on the requirements of their projects,” says Gary DeMond, ecomedes' chief operations officer.
The global market for such products is approaching $200 billion annually. And ecomedes just became a player in it with a contract to help the U.S. government meet a congressional mandate to increase the share of “green” materials in federal construction projects.
Federal agencies, excluding the Department of Defense, spend $450 billion each year for building parts and services. “Ninety-five percent of what the Government Services Agency buys must meet some federal sustainability standard,” DeMond notes.
With the GSA contract that started on Oct. 1, ecomedes' platform became a go-to resource for 100,000 federal procurement officers. “They benefit by significantly reducing the time required to select, map, document, report, and analyze product acquisition required to operate their 360,000 buildings,” DeMond says of federal procurement officials.
The platform is offered to manufacturers through subscriptions with pricing based on the amount of analytics and other things clients require, the COO adds.
“We have built the largest and most powerful platform in the market place,” he says.
At inception, the company signed up Japan's Toto Ltd., the world's largest manufacturer of plumbing products.
The startup has raised $150,000 of its angel-round goal of $250,000, according to DeMond.
Ecomedes does not anticipate entertaining acquisition offers for at least another four years, DeMond says.
In January, the company will launch a “public” platform to help people involved in sustainable construction and furnishing to find the products they need, DeMond adds.
Fort Myers
Endlink
Rob White
Chief Executive
The Pitch: A platform that allows organizations to engage with members using whatever communication method the member prefers, be it email, text, voice mail or snail mail.
Homeowner groups and commercial-property management associations are primary customer targets, but faith-based organizations are high on Endlink's list as well.
CEO Rob White cites his homeowner association as an example of a potential customer. “They do an exceptional job, but I wish they could do a little more,” he says, citing messages such as reminders about events and projects within the residential community.
Endlink's platform evolved from one of its development team's earlier enterprises, PeopleLYNK, a communications platform for medical professionals and their patients.
White and his partners embarked on the Endlink project after selling PeopleLYNK in 2014 to Vista Equity Partners.
“We realized other industries could use something very similar,” White says.
Endlink plans to make its money through subscriptions and services to partners such as HOAs and churches. “It's much better to have partnerships” than seeking out individual customers, White notes.
Endlink has enlisted 24 partner businesses and organizations for a several-month testing phase that is underway. Its largest faith-based partner is Christ Fellowship, a Miami mega church with several locations around the city, he says.
Though subscription rates have yet to be determined for the various categories of customers, White says the company projects revenue of $250,000 in 2017, with 15% of that going to cover the cost of acquiring and servicing customers.
Returns could be especially attractive if Endlink acquires a sizable portion of the 350,000 homeowners associations in the United States. With a hypothetical membership rate of $200 per month per HOA, $800 million in revenue would be generated yearly, he says.
Revenue projections are for $3.4 million in 2018 and $11.4 million in 2019.
This story was updated to reflect that Publix sent a letter of intent to Local Greens and that Local Greens uses 95% less water in its process.
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