Alveolus, which makes high tech stents used to keep closed gastric or pulmonary passages open, won the $5,000 Capital Access Business Plan competition on Wednesday.
A panel of six regional venture capitalists judged presentations by five finalists for the award. The panelists also critiqued each presentation. They included: Andrew Lindner, Frontier Capital; Greg Johnson, Academy Funds; Brent Kulman, Charlotte Angel Partners; Richard Brown, Aurora Funds; Mike Elliott, The Wakefield Group, and John Camblier, MCNC Research and Development Institute’s new ventures.
Winner Alveolus seeks $5 million to $10 million to fund its market launch and provide working capital. Founded in 2001, the company has eight employees but would like to build an international sales force of up to 50 people.
The company says it plans to extend its stent marketing to those used to open passages clogged by cancerous tumors. While this may not extend the lives of cancer sufferers, it may provide significant pain relief and comfort, the company says.
Arcus Medical, which makes innovative, non-invasive systems to control incontinence and ostomy markets won the approval of the audience, with advertising company Elevator Channel a close second in response measured by clapping.
Arcus seeks $1 million and says it expects to reach $40 million in net sales within five years. It makes an incontinence system that provides advantages in comfort, convenience, confidence and cost over other systems currently available.
The judges, however, found the Alveolus presentation most compelling with Arcus a very close second.
The two software companies, TreoSystems, which sells software to provide on-the-spot product location and price information to shoppers and store employees in “Big Box” retail stores such as Target, and End ii End Communications, which makes intelligent network security software, drew more skeptical questioning from the panelists.
EndiiEnd (pronounced End to End), had $1 million in revenue in 2002 and $484,000 in 2003. It projects $3.8 million revenue for 2004. The company seeks $5 million in venture backing. John Dwyer Jr., chief executive officer told the panelists its broadband network software “gives customers ten times the bandwidth for half the cost of other systems.”
Ads on Elevators
Humor slipped into several presentations. Since the information technology jargon used to describe End ii End’s product can be daunting, Dwyer says one of his executives suggests telling the panel, “It slices, it dices, it walks the dog.”
The Elevator Channel, which sells advertising on screens in office building elevators, drew “I like this company” responses and high marks from two members of the panel, but its total vote lagged behind the medical device company scores.
The Elevator Channel had $133,941 in revenue in 2003 selling ads on screens in Charlotte building elevators. It projects revenue of $2.65 million this year and seeks a second round of $3 million. The company received $1.8 million in outside investment and additional backing from its founders.
The company says its messages are targeted to the specific audiences they expect to ride the elevators and riders showed a 43 percent recall rate when tested, much higher than the 15 percent average for TV advertising.
One venture capitalist questioned whether the company will actually be able to get the ad rate it says it plans to charge, but the company already has growing revenue and a contract with Bank of America, which the CEO notes, does considerable due diligence.
The screens are serving ads in a number of Charlotte building elevators already and the company plans to grow in the Charlotte market before moving into others.
Alveolus: www.alvelous.com
Arcus Medical: www.arcusmedical.com
Elevator Channel: www.elavatorchannel.com
EndiiEnd: www,eiiecomm.com
Treo Systems: www.treosys.com
