Editor’s note: Local Tech Wire conducted Q&As with many of the companies presenting at the Council for Entrepreneurial Development’s Venture 2002. Eighteen responded. Other Q&As will be published later as part of LTW’s “Top 25 Companies” list.Launched by three former engineers at Mitsubishi, Advanced Integrated Manufacturing Solutions, or AIMS, is carving an ever-increasing share out of a big — if not glamorous – marketplace.
Shop-floor software.
Manufacturers, such as AIMS client BMW, have been looking for ways to incorporate Web-enabled software into manufacturing processes. They want to accelerate production, streamline procedures, communicate more effectively with operations in multiple global locations, reduce paperwork, and pad the bottom line. AIMS is providing solutions with a product suite that links corporate enterprise networks with the shop floor and provides real-time tracking, inspections and equipment status.
In making its case for $1 million to $2 million in venture funding at the Venture 2002 conference, AIMS also can bill itself as much more than a startup. Self-funded to this point, it has product, high-profile customers and revenue. Founded in 1997, AIMS already is profitable with revenues nearing $1 million and a team of 14 employees.
“AIMS has a great set of products already proven with prominent clients like BMW, JDS Uniphase, and Abbott Laboratories,” says Perry Smith, president and chief executive officer. “The latest versions of our products have been meeting with enthusiasm at major automotive manufacturers, whose technology spending priorities focus on providing productivity gains with an average payback of three to six months.”
In reciting the company’s strengths, Smith stresses the easy Web interface AIMS has developed as well as the experience he and his partners have in the field. AIMS says it knows what manufacturers need — and listens closely to what they will need.
Smith, one of the founders and now president and chief executive officer, has specialized in advanced manufacturing information control systems for 18 years. His colleague and co-founder, Robert Mullen who holds a Masters in integrated manufacturing systems from NC State, has 13 years in the business. And Masoud Monazah, the chief financial officer and the other co-founder, has 15 years in that field.
The three believe that AIMS could win three percent of the growing ($800 million) fields known as enterprise quality management and manufacturing execution. And they also have their eyes set on supply chain management and customer relationship management.
Q&A with AIMS:
Answers provided by Perry Smith
Times are tough. If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”
AIMS has a great set of products already proven with prominent clients like BMW, JDS Uniphase, and Abbott Laboratories. The latest versions of our products have been meeting with enthusiasm at major automotive manufacturers, whose technology spending priorities focus on providing productivity gains with an average payback of three to six months. Investment in AIMS will accelerate penetration of our product into a proven market with minimal risk.
What makes your company unique? Do you have a proprietary and/or a patented technology? Please explain why it is unique and what the status is of any patent filings.
AIMS founders have fifty years combined expertise in the manufacturing software domain. This is reflected in a rich suite of products that uniquely target and leverage the intersection of product design, e-business-driven customer ordering, supply chain and the shop floor, providing best-of-breed manufacturing quality and production functionality that integrate seamlessly with the enterprise.
This kind of collaborative capability, presented with a highly visual and intuitive web-based interface, is unique in the industry, providing true make-to-order quality management capability, a missing component of current enterprise offerings. Deployed through the web, these tools enable globally distributed manufacturers to manage the production quality of a virtual enterprise.
Copyright protection is in place and patent potential exists and is being actively explored.
What makes your product(s) and/or services unique vs. your competition? (Who is your competition, and what do they offer?) If you have no competition, why not?
Most often our competition is legacy systems existing as manual checksheets and spreadsheets, sometimes homegrown Access databases, and on rare-occasion, a homegrown application. Our products provide order-of-magnitude productivity gains over these legacy processes, many of which have been in place for decades, as well as unprecedented connectivity with the enterprise. Other packaged products exist with related functionality, but serving different target markets and providing much less in the way of graphically rich or analytically capable features.
Does your company already generate revenue? If so, how much? Are you cash flow positive?
AIMS has been cash flow positive every year since our first full year of operation in 1998. We are on track for our year 2002 revenue target of $2.2 million, representing 120 percent profitable growth over our prior year revenues.
What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?
The Enterprise Quality Management (EQM) and Manufacturing Execution (MES) markets are currently around $800 million, projected to grow to between $1.3 billion and $2.5 billion by 2006. AIMS technology platform may also be deployed as a component of Product Lifecycle Management (PLM), Supply Chain Management (SCM) and Customer Relationship Management solutions, each of which represents a $15 billion market.
With the current planned investment, AIMS expects to capture approximately three percent of the EQM / MES market by 2006 with sales of $36 million.
What will you do with the invested funds? What is the timeline for product delivery? If you have existing products and services, how will additional funding help you expand your company, if that is the intention, or will you develop new products?
Our plan for invested funds is to accelerate market penetration with our existing products through expansion of sales, marketing, and customer support, expanded business development and partnership activities, targeted product enhancement, as well as enablement of action on opportunities to achieve global reach.
What do you want from an investor other than money?
Visibility into manufacturing and enterprise application networks is an attractive feature to us, as well as the depth to participate in possible future financing.
Why will investors be impressed with your management team?
Our proven ability to stretch invested dollars to the highest possible value – evident through four and a half years of profitable operation, self-funded product development, as well as our capability to deliver in a demanding domain. The fact that our founders have worked together as a team for the past twelve years also lends a unique chemistry that translates into solid customer engagements.
What is the exit strategy for the investor from your company? Are there potential strategic alliances with larger companies? Do you wish to take the company public? Or do you wish to grow the company and either sell it or acquire other companies?
Our primary strategy, and our goal in the past and now, is to grow the company as rapidly and to extend our leadership into this large and emerging market space. We consider all liquidity options open – from acquisition through merger to IPO.
We have established strategic alliances with major players in the manufacturing software infrastructure domain, and, in service of our general philosophy of rapid growth, have recently added senior business development leadership to explore and expand opportunities for partnership. Discussions with major enterprise players for collaboration are ongoing, any of which may result in eventual acquisition or merger opportunities.
What do you want to see in a term sheet? What would you consider “fair”?
Maximized return on investment for all stakeholders would seem to be the fairest thing to me.
How do you really feel about venture capitalists and bankers?
I’ve been struck with how friendly folks are, with a genuine interest in providing the resources necessary to help us extend our leadership in the emerging collaborative manufacturing software market. And it’s not all about money – it’s about contacts, good advice, the whole gamut.
Advanced Integrated Manufacturing Solutions, Co. FACT BOX:
TYPE OF COMPANY: Software
ADDRESS: 2635 Meridian Parkway, Suite 145B Durham, NC 27713
PHONE NUMBER: (919) 806-8000
WEB SITE: www.aimsco.com
MANAGEMENT TEAM MEMBERS:
Perry Smith – President and CEO
Masoud Monazah – Director, Consulting
Bobby Mullen – Director, Product Development
Charles Joyce – Controller
BOARD MEMBERS:
Reid Conrad, Commerciality, Inc.
Advisor: Lee Buck, Commerciality, Inc.
COMPANY MISSION STATEMENT: AIMS’ enables customer-driven manufacturing through best-of-breed shop floor solutions integrated seamlessly with the global enterprise.
REVENUES: $917,000 – trailing 12 months, profitable
YEAR ESTABLISHED: 1997
NUMBER OF EMPLOYEES: 14
