Tuesday, January 2, 2007

Dec. Start-Up Report - Promising New Companies

The yearend Start-Up Pitching event took place at NYU – our first iEvening in a number of years. Congratulations to the winner,Brian Smiga of PreClick, who will go on to attend Private Equity 2007 at the Yale Club. In the meantime, he has earned himself several follow-up meeting with the investors.


Since we are at the end of a season and preparing to introduce a new ePublication, we are delivering our first report and online critique of the pitches. You are all welcome to disagree and email us or post directly to our blog.


Summary and Critique of the Pitches
As a service, Alitoria hopes to introduce the concept of a Wiki, a collaborative knowledge database for specific professional industries,starting off with the BioScience industry. This is a promising concept since Wiki’s are hot. But to be investible they have to show there is a big, paying audience for this with sufficient need that they would quickly adopt it. Like many early stage companies, Alitoria tended to assume that if they built it people would come: in this case, at about$10,000 a seat per annum. They may be right, even though some judges doubted that the highly secretive pharma companies would be willing to share data. But in order to get a check, Alitoria would need to show that.


Brian Smiga won with Pre-Click mostly because he has a relationship with Wal-Mart. Piggy-backing on a major partners is the no. 1 way to win credibility and raise money with investors. And that was certainly the case here. Brian is also a seasoned entrepreneur who knows how to pitch a compelling case. Naturally, there were concerns about why a Wal-Mart relationship requires more funding and whatthe brand name, Pre-Click actually means. Also,there is a debate about whether photo-retouching is best done online or on the desktop with downloaded software. Our advice: don’t start a debate, work with public perception which is its own reality that is also very expensive to overcome. So in this case,do both be Software as a Service as well as downloaded!


Good Health Advertising is an anomaly in our pitching history – a sales organization in search of technology. Usually, we have technologists in search of sales. The idea makes sense: focus on the ad needs of industry’s biggest spenders who have barely made inroads on Internet advertising. For an investor however, it is hard to figure out what the investible property is. After all, investors are about money and an entity they can cash out with.Hard to figure out how to IPO or sell out little more than a network of sharp salespeople.


ID Rank Security represents a number of patents applied-for on security technologies. However, it is not clear how they are actually employed, what adoption plan is and how exactly they would be monetized. In order to be investible this really has to be spelled out. Companies don't pay up license ees because they feel generous, it usually has to be squeezed out of them. Investors generally don’t want to pay for the privilege of being the squeezer. Also, the pitcher floated some usage possibilities of the technology. Investors want as sure a thing as possible, so this trial balloon approach tends to undermine credibility. Know what you’ve got, who wants to buy or use it, what you need the money for and your prospects with investors will improve.


Mindjot is an idea in search of a vehicle and a market – saving your thoughts to a digitally retrievable database using entry codes. There may well be something to this if it were simpler, but as it stands, it appears to require one or two steps too many, and it doesn’t resonate in our instant fix, intuitive culture. Also, the adoption plan alls for partnering with the trade show industry, a ontracting sector that is not known as a big spender.


Valt.X Technologies Inc. is a Canadian company that offers a hardware solution to restore a computer to its previous or pre-crash state. The prospects are indeed intriguing and it addresses a huge problem with the prospect of great numbers. However, it is not precisely clear how this works or what the user tradeoffs are. It is rare that technology comes without tradeoffs, so by ignoring this point, it is hard to get investors truly interested. The bigger the promise the more you want to back that up.


PPT was the second runner up with a professional pitch about offering what is essentially the YouTubefor PowerPoints, an aspect of the market that is simply not covered. And there are an estimated 30million Powerpoints created daily. However, it is not clear that they are ready to make this accessible to every businessperson, so the cost of sales could be high. Plus, there is the all-important "what your relationship with Microsoft" question.


Toothprints is a new way to capture DNA and more from the public. While this is an unusual pitch and an unusual product exuberantly pitched, it also turned out be a surprise hit. However, it was less about the pitch or the creative marketing plans, it was a lot more about the margin. A nickel’s worth of plastic that can command upwards of $3 at the dentist’s office has a way of getting investors’attention.


To paraphrase an old saying, when it comes to VCs,Margin is the Mother of Investment.
Alitora Systems Marc Hadfield, CEO917-991-9685marc@alitora.com
Alitora Systems is developing an online service, Memomics.com. Memomics.com is a web community that allows professionals to access a unique collection of high-value subscription databases blended with Internet data. It also allows these professional to comment, collaborate and evolve the data. The entire community is powered by our proprietary Semantic Database technology, kHarmony. Given current revenue for premium subscription databases and search technologies, and the untapped market in data integration, the market is estimated at roughly$8 Billion, worldwide.


2. Preclick Corporation Brian Smiga , CEO & Chairman 800-450-wiki Fax: 732-291-1007 brian@preclick.com
Preclick is the established leader providing photo social networking services and photo desktop software to Wal-Mart, HP, 3M, Sandisk, Costco &others. Preclick generates $1.7 million in revenue during 2006 and has $1.5 million pre-booked for2007. The company is projected to break even at $4million in revenue in 2007. Starting in December2006, Wal-Mart will prompt many of its 136 million consumers to use Preclick-co-branded photo software and sharing services. Preclick is paid a minimum amount per year from its clients, and the company can up-sell freemium and premium services to consumers that are reached through our large distribution partnerships. Preclick is the MusicMatch of the photo space, which exited for$160M to Yahoo! Preclick is well on its way to building an installed base of freemium users worth$10-20 each and premium, paying users worth $50-60each. The company was founded in 2002 by 20-year software vets with Silicon Valley experience.Investors include SJF Ventures (Alan Kelley, dir)and NYAngels, MAG Fund, Tri-State, LORE & other angel groups.


3. Good Health Advertising Robert Kadar. CEO & President201- 927-8473 Fax: 201-608-6904rob@goodhealthadvertising.com
Good Health Advertising -http://www.goodhealthadvertising.com/ - is anext-generation, vertically-focused Internet advertising network and advertising sales representation firm concentrating in the health and pharmaceutical advertising category. The Company s objective is to become the leading online health-focused advertising network in the industry and as a result be positioned as must-buy for virtually every pharmaceutical and health-focused advertising campaign running online. Currently there exists no clear health-focused online advertising network leader and Good Health Advertising is prepared to take on this role. We employ the latest in ad targeting and ad serving technologies and offer our advertisers a wide variety of advertising programs from which they can select.


4. ID Rank Security Gary Guttman, Board Member888-448-7265 Fax: 888-448-7265gguttman@katungroup.com
ID Rank Security, Inc. (IDRS) developsa uthentication & security products for secure communications & access in the rapidly growing VOIP telecom industry. With four patents pending, our secure telephony technology products make data,voice, and multimedia more secure by requiring multiple types of authentication & encryption with the additional option of real-time tracking &alerting. We have developed an IP mobile phone thatwill encrypt all transmissions and allow for authentication of all participants in the phone conversation with biometic sensors.


5. Mindjot Inc Sam Frentzel-Beyme, CEO212-988-1388 Fax: 212-504-7936sam@mindjot.com
Mindjot is a software-as-service technology company that has developed a patent-pending, marketing portal that runs seamlessly and simultaneously across cell phones, PDA s and PCs. The MindjotPortal gives consumers control of their marketing and advertising environment by allowing them to record experiences at the point of interest. At the same time, the system gives companies the ability to create, manage, deliver, and track focused campaigns in any language based on demographics, country,city, time, and other factors. By combining short,easy-to-enter, numeric codes and quick-view mobileweb pages, Mindjot converts real-world experiences into digital-world memories that can be accessedfrom any net-connected device. Revenue is generated hrough licensing fees paid by companies who deliver those messages and manage the consumer interactions through the Mindjot portal.


6. Valt.X Technologies Inc.Dennis Meharchand, CEO416-746-6669 Fax: 1-416-746-2774dennis@valtx.com
Valt.X is a fabless semiconductor manufacturer developing computer security semiconductors to protect and with absolute certainty instantlyrecover computers from malicious electronic attacks.The Valt.X Instant Recovery semiconductor solution has been test marketed at $75 per computer to Education sector clients and at $125-$150 per computer to Businesses. The target market is to implementing the Valt.X Serial ATA based Security Semiconductor under development. The company has 14issued patents and 54 patent applications. We estimate that the market for our Security Semiconductor alone may exceed $2 billion annually.


7. PPTshare James Ontra, CEO(212) 213-1710 Fax: (212) 937-5257james@pptshare.com
PPTshare is a pioneer in Presentation Management software; a newly recognized business communications and ECM category that fosters better, faster,compliant presentations within an organization. PowerPoint s evolution into the premier medium for delivering valuable business communications,combined with the explosion of digital media, has created the need to organize and automate the creation and distribution of presentation content.PPTshare offers a variety of products that address Presentation Management needs from single users with one PowerPoint file, to large enterprises that require compliance and high quality media for hundreds of users.


8. Toothprints International, Inc.David Smith, Partner201-264-6256 Fax: 201-995-1033davidjjs@aol.com

TOOTHPRINTS* Intellectual Property (IP) component is comprehensive, current and in good order. * TOOTHPRINTS is a better biometric tool that contains three (3) key elements: 1). Dental bite impression 2). DNA bio-marker 3). Saliva provides scent-tracing capabiliites* DNA never lies, DNA never dies and DNA will never fade away.* A unique and innovative ID product with no competition.* Over 350,000+ children have been "toothprinted"just in the USA.* Excellent ROI and high profit margin.
TOOTHPRINTS International, Inc. is poised for rapid growth as it's a unique and proven product with no competition. A new DVD has been produced which i scompelling and highlights the benefits and benefit of TOOTHPRINTS (potential market is the entire world. In addition to the below information, I also have volumes of information that highlight TOOTHPRINTSand it's outstanding and proven benefits that can benefit the entire world. TOOTHPRINTS bite impressions have a patent,copyright and a federal registered trademark soall-intellectual property elements are covered. TOOTHPRINTS is a thermoplastic wafer that each childbites into that leaves a dental impression or toothprint (appropriately named). No two toothprints are the same and even leave different bite impressions with identical twins. TOOTHPRINTS is the world's most comprehensive identification product and the Department of Homeland Security in Washington, DC is currently evaluating its unique aspects and properties.

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