Editor’s note: This is the fourth in a series of selected companies that are scheduled to present at the Council for Entrepreneurial Development’s venture capital conference on May 2-3 in Pinehurst.
________________________________________________________________________________________If Optotrack proves to be successful, plastic chips could be mentioned in the same breath as silicon chips.

Optotrack, a chip firm launched in 2002 by executives who are bootstrapping it with private savings, believes its plastics-based technology will help grow the emerging “lab-on-a-chip” industry.

“Our technology is based on plastics, not glass, silicon, or ceramics as our competitors,” Optotrack management told WRAL Local Tech Wire in a Q&A. “We can carry out the tasks from conception to volume production in six weeks, which is much shorter than three to five months by our competitors. We also have in-house techniques to treat the surface of our microfluidic chips to eliminate the interaction between chip materials and chemical reagents which has been a problem faced by many users in the industry.”

The Q&A:

The momentum has picked up over the past year in many segments of venture capital. Are you finding more interest among potential investors?

Opportunities are often created by proactive means. Since we treat our potential investors as our customers and we deliver value to meet their expectations, we can always keep the momentum going to achieve our goals.

Even in a better investment climate, VCs are more demanding than ever in terms of due diligence. Why should investors be interested in your firm?

Our technology and product address emerging market opportunities in the global marketplace and we have already had customers.

What’s your “elevator pitch”?

We are making high-value plastic wafers with precision-embossed microstructures designed for application-specific functionality in the markets of healthcare, optoelectronics, and homeland security. Our products include microfluidic chips and optical devices. We start with providing foundry services and will establish our own brand name by 2008. Our team members have many years industry experience and know what we try to achieve. Our approaches offer competitive advantages such as design flexibility, rapid prototyping, user’s cost saving, and custom surface treatment protocol to better cope with market dynamics and technology platform transforming.

What is the “pain point” (or points) you address for your customers

Our plastic microfluidic chips are the key component of so-called lab-on-a-chip systems that can manipulate samples and reagents to perform multiple biological and chemical reactions and analyses for automatic operation, fast validation, and real-time monitoring, which are otherwise usually done with larger volumes in well-equipped laboratories. It helps our customers reduce cost, increase productivity, and improve outcome.

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.

We have developed a proprietary rapid-prototyping process suitable for multiple technology platforms, which allows us to optimize designs, develop prototypes, conduct volume production, and implement quality management in multiple market segments efficiently and cost-effectively. We are now closely examining our intellectual property to reach an action plan for our IP strategies and tactics.

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?

Our technology is based on plastics, not glass, silicon, or ceramics as our competitors. We can carry out the tasks from conception to volume production in 6 weeks, which is much shorter than 3 to 5 months by our competitors. We also have in-house techniques to treat the surface of our microfluidic chips to eliminate the interaction between chip materials and chemical reagents which has been a problem faced by many users in the industry.

Does your company already generate revenue? If so, how much? Are you cash flow positive?

Our company has generated revenues and we expect our cash flow to be positive in 2008.

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?

Our markets include healthcare, optoelectronics, and homeland security. We will achieve our targeted sales revenues around $28 million with 20 employees by 2010.

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?

We’ll use the invested funds to grow our foundry services and for new product development efforts. We will introduce an integrated microfluidic system to the biotech industry in 2008 and launch a smart drug delivery technology platform in 2009. We want to be the best for what we do in the global marketplace.

What do you want from an investor other than money?

We want their money, experience, advice, industry partnership, and global view. We will match with our momentum, commitment, and strong desire to deliver and to succeed.

Why will investors be impressed with your management team? Include a brief background about key executives.

Our management team is very experienced and committed.

P. Craig Kung is the President and Founder of Optotrack, Inc. He held various positions at Tatung Company, R.O.C. Air Force, Industrial Technology Research Institute, Los Alamos National Laboratory, AFR, Inc., InfiMed, Inc., JDS Uniphase, GlaxoSmithKline, and UConn Medical Center. He holds a Ph.D. in Materials Science and Engineering from Carnegie Mellon University and an MBA from University of Connecticut.

David Holcombe is Engineering Manager and has a B.S. in Electrical Engineering from North Carolina State University and an M.S. in Electrical Engineering from the University of Santa Barbara. He worked at Motorola, Cree, Cronos, JDS Uniphase, and MEMS CAP in various positions ranging from process engineering to device engineering and integration engineering.

Y.L. Kung, a Ph.D. candidate in Geological Sciences of Binghamton University, is Information Technology Manager. In addition to working as Assistant Researcher at Institute of Earth Sciences Academia Sinica for three years, he has worked for Science Applications International Corporation to support software development and maintain the SMDC Monitoring Research Program web servers and web sites.

Shani Barrax Moore is Marketing and Communication Manager and has an MBA from Strayer University and a bachelor’s degree in Journalism and Mass Communication from the University of North Carolina at Chapel Hill. She has served as director of communications, program director, market research call center manager, and academic assistant in various organizations. Her experience in cultivating relationships through outside and inside sales and marketing strategies has resulted in increased product awareness to targeted clients and customers as well as the development of new customers.

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?

We are looking for merge, acquisition, or IPO opportunities in 2010. Our sales revenues will reach $28 million by that time. We will partner with analytical instrument and spectroscopy manufacturers to build general-purpose microfluidics-based systems, and work closely with pharmaceutical and biotechnology companies as well as federal government agencies to develop applications-specific units.
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FACT BOX: Optotrack, Inc.

MISSION STATEMENT: Our mission is to deliver innovative products and services of exceptional quality to the industries of healthcare, optoelectronics, and homeland security, and become a visionary company in the global marketplace.

ADDRESS: P.O. Box 1242, Cary, NC 27512

PHONE NUMBER: (919) 434-5006

WEB SITE: www.optotrack.com

MANAGEMENT TEAM MEMBERS:

Craig Kung, Founder and President, R&D, consulting, product development, technical marketing, and strategic alliance.

David Holcombe, Engineering Manager, process and product development.

Shani Moore, Sales and Marketing Manager, business communications, marketing and public relations, and customer service.

Y.L. Kung, IT Manager, simulation, computer programming, and database management.

BOARD MEMBERS: P. Craig Kung, M.S. Liu, and Y.L. Kung

INVESTORS: Private savings

REVENUES: $150,000 (projected for 2006)

YEAR ESTABLISHED: 2002

NUMBER OF EMPLOYEES: 5