Editor’s note: Software company Elsinore Technologies, one of the numerous ventures launched by serial entrepreneur Ray Allen, is one of 23 companies preparing for presentations at Venture 2003, the Council for Entrepreneurial Development’s 20th annual venture capital event.
As it did a year ago, Local Tech Wire is featuring in-depth profiles of presenting firms built around a Q&A with a company executive as well as a Fact Box of important information. One profile will appear each day.
LTW put together a Q&A designed to not only produce facts about the presenters but also to give each a chance to state the case for venture capitalists to invest.
Third in the series is from Dan Soper, president and chief operating officer of Elsinore Technologies.
Venture 2003 is set for April 22-23 in Chapel Hill.
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?”
Real customers, real revenues, real profits.
In addition, Elsinore has a proven executive team with nearly 100 years of collective business and managerial experience. With a track record of building businesses and creating shareholder value, Elsinore’s executive team has proven itself to be extremely resourceful by growing revenues and profits in a down economy. Add to this the established and customer-validated Visual Intercept software products that have been sold to thousands of users worldwide; a strong relationship with Microsoft and products tailored to their industry-leading development environments and office products; and a flexible new development framework upon which we can quickly customize productivity solutions for “enterprise issue management.”
Since Elsinore’s new enterprise issue management solutions help increase productivity using existing human resources, the company is well positioned to make money even in the face of continued economic stagnation. According to Forrester’s annual Business Technographics Benchmark survey of 900 business and IT decision makers, companies selling products that deliver efficiency gains, help retain customers or address integration issues will perform best in 2003, when budgets are estimated to increase only 1.9 percent over 2002.
What is the “pain point” (or points) you address for your customers?
For years, businesses have been searching for a truly effective method of keeping all employees and other members of the extended enterprise informed, connected and aware of their tasks and responsibilities. In the absence of an effective, user-friendly collaborative communication solution, planning is often ineffective, tasks constantly fall through the cracks and miscommunication abounds…all of which decreases productivity, quality and profits.
An automated “enterprise issue management solution” such as Elsinore’s allows all users in an organization to identify, prioritize, manage and communicate issues (planned tasks and unplanned events) associated with work in real time over a common platform. By increasing work efficiency and enabling issues to be resolved more quickly through real-time collaboration, enterprise issue management increases productivity, provides a quicker path to profits and enables timely decision-making.
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.
Although our technology isn’t unique, our product architecture and approach to the “pain point” is. Since inception, Elsinore has been driven by a clear vision, one that supports a customer’s existing applications and processes where they exist while providing significant features and functionality in the areas that aren’t supported or are supported inadequately. Our solutions leverage our customers’ existing investments in the tools and applications they already own, use and have integrated into their work. We provide the structured framework that focuses and prioritizes their work on concrete activities that affect the company’s tactical and strategic tasks. We don’t require long implementation cycles, steep learning curves or replacing the other tools and applications from which our customers are deriving value.
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?
Elsinore’s enterprise issue management solution is a unique approach to solving the universal business problem of lack of communication and collaboration among all users throughout the enterprise. By doing this in the least obtrusive manner possible for each user…on the desktop, over the web or embedded directly into their application of choice, such as Microsoft Outlook…we maximize the likelihood of complete acceptance.
Elsinore’s current Visual Intercept product suite offers several unique features, including: enterprise-level capabilities and extensibility; a highly intuitive user interface organized in a familiar project hierarchy format; Microsoft-centric solution; and advanced capabilities like incident-to-incident mapping, which allows users to track simple to complex relationships between incidents and across projects to identify recurring problems and patterns. Using our new development platform, we will also be able to quickly and cost-effectively develop and deploy enterprise issue management solutions for multiple markets from a single platform, and to customize them quickly to address the needs of each user.
A number of competitors in software development lifecycle management, our primary target market at present, could potentially migrate to enterprise issue management, from companies like Rational to companies like Seapine. Each of these organizations offers solutions that are somewhat similar to Elsinore’s; however, we have differentiated ourselves on several levels, depending on the competitor, from product architecture to how we sell.
Does your company already generate revenue? If so, how much? Are you cash flow positive?
Elsinore has a proven history of fiscal responsibility, and our cash flow has remained positive since inception. We have never taken outside funding and we started the company with loans, which were paid back years ago. Elsinore’s customer install base has increased six consecutive years, with revenues and profits growing for five of the past six years. In 2002, Elsinore’s revenue increased by 200 percent to $3 million, while the number of licensed seats sold increased by 190 percent. Eight of the ten largest deals in Elsinore’s history were closed in 2002.
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?
Elsinore is developing enterprise issue management solutions targeted for specific applications within the IT enterprise, including software development lifecycle management, project management and compliance management. While diverse application solution providers exist in each segment, few solutions address enterprise issue management, and none with the depth that customer needs require, evidenced by the recent trend toward the centralization of IT.
As recently as January of 2003 in a meeting with Forrester, Elsinore tried to quantify the demand for enterprise issue management solutions in targeted market segments. To date, we have been unable to obtain specific figures but will continue to seek this information.
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?
In order to properly execute our core strategy of developing and marketing solutions for enterprise IT issue management applications, funds will be used to create and implement marketing and business development programs for targeted markets, expand the sales, business development, marketing and customer support teams and accelerate the development of Elsinore’s new development platform and solutions built on this platform.
What do you want from an investor other than money?
Elsinore is looking for partners who will be active participants in helping to grow the business. Partners who will create opportunities by helping us open doors to new channels, new business segments and new customers are essential elements to our future success. Elsinore has proven there is a market for our product and demonstrated our ability to sell against our competition. Our primary challenge has been creating more awareness of who we are and what we do with limited marketing resources. Working with partners who are engaged with Elsinore both financially and on a business development level can help us overcome this challenge.
Why will investors be impressed with your management team?
With nearly 100 years of collective managerial and business experience in enterprise software and other industries, Elsinore’s team of seasoned business executives is highly qualified to lead the company to its next level. A sampling of the team’s experience:
Chairman of the Board and CEO Ray Allen has co-founded and launched five software development companies in the North Carolina Research Triangle; I have held executive-level positions in numerous areas…including CEO, president, strategic planning, marketing, sales, finance and operations…for several companies, large established companies as well as start ups and restarts with success in selling or merging those same companies; Jim Goldfinger has nearly 20 years of experience in enterprise software sales and consulting and is one of the pioneers in the Customer Relationship Management (CRM) industry; and Mark Uland, who co-founded Elsinore with Ray Allen, has created successful shrink-wrap software companies and consulting firms targeting markets of varying types and sizes.
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?
First and foremost, we are committed to the execution of our mission of developing software solutions that will enable the level of collaboration and communication needed for efficient, reliable issue management throughout the enterprise. This commitment will continue to drive us to succeed in building a company capable of long-term sustainability. Market conditions will dictate what exit strategies are available at the right time. Our objective is to execute and create real value so that several opportunities will be available to all interested parties.
Facts about Elsinore: www.localtechwire.com/article.cfm?u=3786