BNC Venture Capital – Summer 2011, #4

John Jonelis

Business Network ChicagoOut of three interesting offerings, the hit of the evening, Ventech, made almost a clean sweep of the voting and appeared to capture the interest of some investors.

As I heard it –

Ventech – Jeremy J. Sanger, CEO

Vantech brings to the table a disruptive technology that is purely mechanical—no smart phone required. (Now, that’s a change of pace.) They’ve invented and perfected the Liquid Heat Generator or LHG, a highly efficient heating source based on the friction of fluid molecules. It can heat a home, heat a power sprayer and could replace an almost limitless array of other heat sources. They’ve taken the well-known physics of the dynamometer and turned it on its head to create an almost instantaneous heating system for vehicles. The device uses only one moving part. The result is 98% efficient—twice that of a wind turbine.

Their first application will be school buses for which a strong need exists. Government regulation mandates the pre-heating of cabins to a specific temperature before the kiddies can board. Imagine the air pollution, the cost of fuel, mechanical degradation, and labor costs as drivers spend upwards of an hour, twice a day, warming their buses. The LHG can do it in 15 minutes—about the time needed to scrape ice off the windows.

It’s impressive to see a nimble response to the economic crisis. Ventech switched their launch from automobiles to a niche market. Of course, cars and trucks are the obvious next step. Those of us in cold climates idle our engines to heat our vehicles. Heating is a particular problem for efficient modern engines designed to create less waste heat. It’s a critical problem for hybrids. LHG can heat a passenger car 70 degrees in 70 seconds. The competition is the old fuel-fired heater, which uses an open flame. Ventech’s LHG uses no flame and heats the cabin 75% faster at half the price. They hold 35 global patents on the technology and a contract with Daimler.

Sangar is an engineer who makes his product tangible. His story is readily understood by all. He even brought along a unit we could see and touch. Add-in his financial savvy and rich British accent and you have a dynamic presentation. He was kind enough to allow me to view his video after the presentation—a well-produced video that made the technology quickly understood—I wish he’d put it on You Tube. I gave his presentation an 8 out of 10, but is the technology real? A quick Google search found the following sources that touch on the subject:

University of Colorado (This is set up like a cartoon strip) http://www.colorado.edu/physics/2000/microwaves/water_rotates4.html

University of Illinois  http://van.physics.illinois.edu/qa/listing.php?id=2180

The Engineering Toolbox  http://www.engineeringtoolbox.com/hazen-williams-water-d_797.html

Wikipedia http://en.wikipedia.org/wiki/Friction

BizConnectNow – Tom Meyer

As I heard it: Baby boomers are retiring and don’t know how to value and sell their businesses. Others are looking to buy but don’t have the information they need to make an informed decision. Think of BizConnectNow as the E-Harmony for buyers and sellers of established small businesses. Both sides of the transaction are pre-qualified on a website using the metrics of character, competence, collateral, and cash flow. That establishes credibility on both sides. The result is to match the right buyers and sellers, provide better outcomes, and shorten transaction time.

The interesting opportunity is the abundance of buyers and the increasing availability of sellers. 10 billion baby boomers need to sell their businesses in the next few years. The current listing sites provide no value-added and seem to make their money on advertising. BizConnectNow earns revenue through subscription from brokers, sellers, buyers, and strategic partners—that’s four revenue streams. Their operational cost are going down each year.

I gave them an 8. Good presentation, but can Tom entice buyers to go through the pre-qualification process?

SmartFab Homes – Tom Hollinden

As I heard it: This is a niche marketing service that markets smart homes to smart buyers. It’s a startup that wants to market high-end pre-fabricated, energy-efficient homes by pre-qualifying homebuyers and sellers on a website. Their buyers are the same people who would buy a Toyota Prius and live predominantly on the coasts and big cities. SmartFab performs marketing, education, and pre-sales, and unlike other pre-fab sellers, they work through traditional brokers. They provide an efficient website and service via telephone. Their clients are predominantly architects. Architects generally know how to provide a service but not how to sell a product. SmartFab fills that gap. The management team comes from commercial real estate with Fortune 100 companies. They’re looking for startup and operational experience on their team and their ideal investor will act as a coach. That last statement might be of interest to professional investors who expect to sit on the board. I gave them a 3.  They need to define their business model more articulately and refine their presentation before we can judge them fairly.  Is it a diamond in the rough?

That’s what I heard. What did you hear? Your comments are welcome.

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Go to – A CONTRARIAN VC MODEL

Back to – BNC SUMMER #3

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Find Chicago Venture Magazine at
www.ChicagoVentureMagazine.com
Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

Copyright © 2011 John Jonelis – All Rights Reserved.

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4 Comments

Filed under BNC Venture Capital

4 responses to “BNC Venture Capital – Summer 2011, #4

  1. Bill Blaire

    BizConnectNow’s model sounds a lot like SmartFab to me.

  2. Jim Kren

    That’s like saying a Lincoln is similar to a Ford. Look at the opportunities for BizConnect and the incredible growth. We all know it’s happening.

  3. Ann Brice

    Listen boys, don’t discount pre-fab homes, especially the high-end green market. But for my money, Ventech sounds like the mature product, ready to launch big. I like the possibilities. I think John’s crack about smart phones was funny but also true. That’s almost all we hear about lately and I for one am bored with it. Here’s something revolutionary and yet simple and mechanical. I’d have to see the technology proven and learn the downside, but if it’s real, wow. Wish I’d been there.

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