Earlier today I posted about two events that took place this evening.
The first was a networking event at a rooftop bar/restaurant.
I was a bit uneasy about going to this event even though it was a stone's throw away from my office because I didn't know anyone going and I don't really like beer. Also, I am not certified to give advice on Israeli law yet and I am low on the foodchain. I thought about buying a drink to loosen up a bit but decided it wasn't worth the 20 NIS. I did see one fellow sitting alone and we chatted and it turns out he is a software developer with an idea (surprise.) While I didn't give him any legal counsel, we did talk business and exchanged contact info. So perhaps for that it was already worth it.
Then, Dov Moran, who apparently invented the USB drive, spoke to the crowd. The first thing he did, which was interesting, was to flip the talk around and ask anyone if they had any questions about entrepreneurship/startups before he gave a talk. He also told the listeners not to turn off their phones; "If an investor is calling, it's probably more important than what I am saying," he quipped. Someone asked him how you can get people you work with to give projects the effort that you know you would give to them. Dov answered that if you have that concern then you shouldn't be involved with that person. You should only get involved with people your trust. If you want guaranteed trust, go talk to the bank- that's their whole business. But when you are dealing with people, your team is only as good as the trust you have in them. He also mentioned that sometimes you might meet some entrepreneurs who have a product that does not impress you so much, but if the people impress you then it may be worth investing in them rather than the particular product. The product may change or the company may change focus, but sometimes the people are more important than the product. I think that idea is in the book From Good to Great. Jim Collins writes that its more important to have the right people on the bus than to know exactly where the bus is going. The final thing I heard Dov say before I left for the other event was in response to a question about how to enter a market that already has many players. He said that you don't necessarily need to be the first in the industry (e.g. Facebook v. MySpace) but you do need to be first in some area that only you do and no one else does. You need to bring some new angle to the existing products or do it better.
I then headed over to the Leonardo Plaza, a few minutes walk away for the crowd funding pitch for Sky Saver. I was late but I must say it was very interesting, although not for the reasons you might think.
First, one would be forgiven for thinking he was at the siyum hashas (see here too) instead of an investment pitch; it was an almost totally chareidi audience.
Then, the CEO was introduced and, lo and behold, he himself just finished shas and was going to make a siyum right then and there followed by a 5 or 15 minute break (depending on who you believed) for cake and ice cream to celebrate. Some people took the opportunity to pray the evening services.
Then as people tried to get ice cream and the organizers tried to herd everyone back into their seats one of the event coordinators was shouting "Please sit down, you are disturbing the presenter. He is trying to speak." Well, what did you expect after giving people a break in the middle (or beginning) of the presentation for cake and ice cream? Third, despite being advertised as an English event with Hebrew simulcasting, much of the speeches I heard were in Hebrew and no one complained.
Fourth, the CEO said that although one can invest in the company and can make or lose money, everyone knows that it is all dependent on Divine Assistance. He said this numerous times and it's also on their literature. I'm not judging- just saying that such a statement is atypical at such an event. Fifth, the CEO then explained that he is basically a salesman and the company has other items besides for fire rescue products that he is selling in order to bring in cash. One product was what appeared to be just a portable spray canister for perfume or aftershave (I wasn't the only one who didn't understand.) The second product was a combination scanner/translator that enables you to scan lines of text directly into your document. I thought that already existed (here and here). And the third was a product to enable you to serve pickles or olives without the juice or brine they come in and then put them back in the juice when you want to store them. Probably a bit unorthodox to be selling other random products not in the company's main field. One woman kept asking how much those products retail for and the CEO was a bit rough on her at one point, saying "I already said it, I can't keep repeating myself. You can look on the website." (I looked and couldn't find those products there.) Then when one fellow tried to take his picture, the CEO shouted "Don't take my picture. Don't take my picture!... It's distracting." Then, 10 seconds later, the company VP for Marketing came down from the dais and started snapping pictures of the CEO- with a flash. Sixth, I didn't see any slides with financial projections or money raised to date etc. Not typical of other slide shows I've seen. Maybe I left too early or came to late for that. Apparently, that type of information is contained in their business plan which you can receive after signing a non-disclosure agreement.
Anyway, about the company/product...
They are in the final stages of development for some of their products apparently. I thought I heard them say the iScape system weighs 80 kilos for 100 meters of cable. But that is too much, their marketing materials say the projected weight per unit is 6 kilos so I'm not sure. There are two different types of systems, hydraulic and mechanical, each with pros and cons.
The company estimates that at a cost of $600 per unit, the market may be worth between $30-$40 billion in the US alone and the first to enter the market will win at least .5% of the market and $50 million in profits on $200 million in sales and $5 billion in revenues by 2025 giving investors a 1500% return on their investment. They say that shares purchased a year ago for $100 are now worth $204. The company says there is a 4% chance that an investor will lose his whole investment. Ernst & Young has reviewed Sky Saver's books and projections and has a 4% equity stake. Sky Saver is selling 11 shares for $2,045 and 60 shares for $10,225 as well as other levels in between. There are 100,000 shares of the company, giving it a valuation of approximately $20,450,000. (Truth be told, I'm not sure how they can do this yet. Although Congress passed the JOBS Act allowing such crowd funding, the SEC has not yet issued the rules that will govern such processes. More on crowd funding in a future post.) They have chosen to use crowd funding because of the problems they think can occur with large investors, namely running out of funds and being unable to encourage other large investors to commit when the original investors decide to sit out on a funding round.
The PR firm they hired is Edelman and they are displaying the product at trade shows and working with regulators and the US Department of Homeland Security and other law enforcement agencies. They have tested their products from their offices on the 28th floor of the Trump Building in NY in Mr. Trump's presence.
The product sounds good and if its true that they already have a backlog of orders that is promising too. Personally, I am always wary of companies that do not display a highly professional face, so I would be hesitant here. I'll update you if I hear of any developments.
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