Ann Arbor, MI

ERT Systems provides a portable and rapidly deployable system for tracking personnel and equipment at incident sites. In this elevator pitch, we learn the following from Dennis Carmichael, ERT's co-founder and president:

• The ERT tracking system uses RFID technology with hardened drop readers and small form factor tags that are placed in clothing and equipment.
• The company estimates that its addressable market is $1.3B and that it will achieve 10% market penetration in five years.
• The company has a $6 MM pipeline in sales and is in the process of signing up three resellers.
•  To help maintain a high growth rate, ERT is seeking one million dollars in additional equity funding. 

Like many entrepreneurs, Sharon McRill, President of the Betty Brigade, did not want outside investment when she started her business. She did not want to owe people, in addition to the disappointment, if her business failed. Now, having achieved the five year mark, she is actively seeking to finance her business after reading Michael Gerber's E-Myth Revisited.

How is she packaging her business to speak with banks and other sources of funding:

• With some success, her business case is now more solid. Perhaps as important, she has a higher level of confidence than she did initially.
• She is looking for funding before it becomes a problem. That gives her some breathing room to evaluate options, and also allows her to present a better picture of ongoing operations.
• She has done a demographic study of her business and discovered that 60% of it is repeat, thereby helping strengthen the case for her receivables as collateral.
• She is willing to show her house as an asset, demonstrating that she has confidence in her case.

RentLinx makes its money by connecting people to information about available rental properties in their market.  You might think this information would be easy to obtain. After all, don't papers have classified listings? Don't rental agencies have web sites? Well, as Jeremy Schneider, founder of RentLinx, explains in this segment, that's exactly the problem. Rental information is in too many places making it hard to locate.

Three years ago, Jeremy decided to solve this problem by allowing rental agencies to list their information for free and tenants to search the listing for free on the RentLinx web site. Landlords have one place to list, and tenants have one place to search. RentLinx makes its money by selling value-added services on top of this asset. Although RentLinx is still under $1 Million in revenue, it has demonstrated some impressive results:

• It currently lists over 400,000 available rental units. For a point of comparison, the state of Michigan has a total rental units inventory of 500,000, and the US an inventory of 30 Million.
• 15% of agencies listing rental properties purchase value added services. These services include giving the agency the ability to update its own web site from the RentLinx database and using the agency's own systems to automatically update its RentLinx listings.

The free services RentLinx offers might seem so attractive that agencies would just flock to list on the site on their own, but that's not how it happened. In Jeremy's next segment, he will describe how he used already existing professional associations to market RentLinx.

Catherine Juon, co-founder of Pure Visibility, continues our series on Financing Innovation by describing her search to obtain bank financing using Pure Visibility's receivables as collateral. In our previous segment with Catherine, she explained her need to finance the float between when Pure Visbility renders services and actually receives payment.

At the time of the interview, it appeared that Catherine was about to succeed in obtaining bank financing, and we have word that she indeed has. This segment was very informative for how a start up owner perceives banks' decision criteria and how that perception influences their decision making. Highlights include:

• Banks may essentially use the same surface criteria such as funding up to 80% of receivables, but how they perceive businesses depends significantly on their in-house expertise. For instance, Bank of Ann Arbor has a technology industry group making it easier for them to understand technolgy businesses.
• Pure Visbility has sought bank financing since their inception three years ago and spoke with a dozen banks.
• At the outset, Pure Visibility considered whether to go for venture or bank financing.
• Pure Visibility chose to retain control of their firm and grow to the point of becoming bank fundable.