2010 Winners
Pedro Santos, (CEO of OsComp), Mike Travis (Travis & Co. and contest co-program moderator), Carl Berke, PhD (judge, Angel Healthcare Investors LLC), Bill Frezza (judge, Adams Capital Management), Eric Schultz (judge, Ascent Venture Partners), Peter Glick (judge, Ampersand), Emmanuel Magani (OsComp team), David Thibodeau, Esq. (contest co-program moderator, Hamilton Brook Smith Reynolds)
Business Plan Contest - November 9, 2010
OsComp Wins 2010 Business Plan Contest
by Andrew Goloboy, CPA
A packed room awaited the 17th Annual Business Plan Contest on November 9. Deirdre Sanders, WPI Venture Forum Chair, opened the evening, together with the two business plan contest coordinators, David Thibodeau and Mike Travis. Close to 200 attendees included students, fellow entrepreneurs and other members of the WPI Venture Forum community.
Forty-three businesses submitted their applications to compete in this year's competition for more than $30,000: $18,500 in cash and another $12,000 in in-kind services. Leading up to the main event, the judges held a Saturday presentation day in October for 25 entrants, narrowing down their selections to six semifinalists. These six were mentored over the next few weeks to improve their pitch and presentation. Then, the six semifinalists presented to a panel of judges through an online service. Emerging were three finalists: OsComp Solutions, a natural gas distribution equipment company; Neuron Robotics, a robotics hardware and software company; and Axena Technologies, a medical device coating company.
The moderators outlined the business plan presentation format. Each company would present their business plan, after which a panel of experts -- Carl Berke of Partners Innovation Fund, Bill Frezza of Adams Capital Management, Peter Glick of Ampersand Ventures, and Eric Schultz of HubCast -- would offer questions, comments, and advice. After the presentations, the judges would meet in private to select the winner. After the deliberation, the judges would come back and explain their selections to the audience.
The 2010 award went to OsComp Systems, the company the judges deemed to be the most "investable." Riding the strength of its presentation, practiced from many prior business plan competitions, OsComp won the hearts, minds, and perhaps the pocketbooks of the judges. Details on each of the three finalists follow.
The first presenter was Pedro Santos, a co-founder of OsComp Systems, which has developed a new compression technology that reduces initial and operating costs for natural gas producers. The company has developed a new type of gas compressor useful for “marginal” natural gas wells, meaning those wells where the gas comes out of the ground at such low pressure that producers must compress it for delivery into gas pipelines. Compressors based on 100-year-old technology are less efficient and many marginal wells have been abandoned. So, OsComp's equipment will bring some of these wells lying fallow back on-line.
OsComp is designing equipment that is much easier to maintain than the current installed compressors. They will extend the preventative maintenance from three months to 18 months, using easier-to-swap parts that can be maintained by general technicians, as opposed to specialists. Their much-lighter equipment will reduce operating and capital costs by 30%. They are addressing a $7 billion market with what they consider breakthrough technology and a very strong, industry-experienced team. OsComp is in the process of raising a $3 million A round, having already raised $450,000 from founder, friends and family.
The judges thought that the OsComp presentation was very strong. They discussed the ownership of the technology, which is 100 percent OsComp as MIT has no rights to technology developed by MBAs and undergraduates in non-MIT facilities. They appreciated the fact that OsComp has some lead customers, is three months to manufacturing, and its product enjoys quick, easy maintenance. A winner!
The second presenters, Joseph Ramos, Technology Development, and An Son Leong, Business Development, from Axena Technologies, discussed their company's antibacterial coating for medical tubing, saving costs and saving lives. Their coating helps to prevent healthcare-associated infections (HAI). Each year, two million people are infected with a HAI, adding over $30 billion in unnecessary hospital costs. Axena's coated tubes reduce and eliminate bacterial growth on the medical tubing, allowing fewer bacteria to grow and potentially infect hospital patients.
Their technology has been exclusively licensed from Brown University, which has a pending process patent on the nanotechnology. They feel that their competitors are not cost-effective nor do they have as effective a technology platform. The Axena coating is made from two inexpensive, physician-friendly chemicals. They believe that they can save thousands of lives, billions of dollars, all with a patient and physician-friendly technology. Axena is seeking $1 million to bring the technology to market.
The judges saw some areas for improvement for Axena. Axena could price low and grab market share, though some prior advisors had suggesting lining up pricing with a competitor and jointly enjoying the price umbrella. They questioned whether $1 million was enough cash and whether more-extensive clinical trials would enhance Axena's marketability. They felt that Axena may need more data to partner with a major medical device company. Also, Axena should focus its research by quantifying improved outcomes, not just less bacteria on the tubing.
The third presenter, Bob Breznak, President of Neuron Robotics, has developed a robotic control system, combining hardware and software to create modular building blocks. These modules enable designers to create new robots more quickly. Neuron Robotics' plug-and-play technology is currently used in the classroom and by robot development hobbyists. The company is expanding into the bioindustrial space, with many prospects in the greater Worcester region.
Neuron Robotics has made building robots simple and portable. They are addressing a significant unmet need for standardization, though setting standards as a start-up company is a difficult task. They are positioning their modules between low-cost and hard-to-scale products and very-expensive, industrial strength robotic modules. They are seeking $1 million to roll-out production, expand staff, and develop go-to-market partnerships.
The judges felt there was still a lot of work ahead to bring the product from an academically- supported and home user base to commercialization. They question the convenient, yet limited, bioindustrial market. The judges suggested lining up potential markets and examining them for potential success, not just geographic proximity. Neuron Robotics should work towards a strong, defensible market position and differentiation.
Andrew Goloboy, CPA, is founder and managing partner of Goloboy CPA LLC, not your typical accounting firm. He enjoys working entrepreneur-to-entrepreneur to build strong business foundations and can be reached at andrew.goloboy@g-cpa.com.
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