Winners of the 2012 Global Venture Labs Investment Competition NuMat Technologies. Photo by Steve Moakley.

NuMat Technology Wins 2012 Global Venture Labs Investment Competition

May 7, 2012

Austin, Texas — NuMat Technologies from Northwestern University beat out 37 teams from top MBA programs around the world to claim the grand prize at the 29th annual Global Venture Labs Investment Competition held at The University of Texas at Austin on Saturday, May 5. NuMat Technologies designs and creates high-performance materials to store clean fuels and produce them on a large scale for industry.

NuMat Technologies was awarded the top prize after the two-day competition that featured 15 international MBA teams and 22 teams from the leading MBA programs around the U.S. Finals-round judges were William Glasgow, Prime IX Investments; Phil Speros, Halsa Pharmaceuticals; Mike Dodd, Austin Ventures, and Thomas Pickens III, Astrotech Corporation.

NuMat Technologies’ COO Tabrez Ebrahim received his B.S. in Mechanical Engineering from the Cockrell School of Engineering at The University of Texas at Austin. “It feels really good to be an alum—Austin’s my favorite place.” Ebrahim also worked with cleantech startups at the Austin Technology Incubator, which has helped 200-plus startups raise over $1 billion in investor capital.

The NuMat team won a $135,000 package including Austin Technology Incubator office space, mentoring and consulting services; a full-page ad in Inc. magazine; consulting with the McCombs entrepreneurship faculty worth $25,000; and cash. The winning team will also close the NASDAQ Stock Market on July 27th.

A team from Thammasat University in Thailand won the first-ever $10,000 Wells Fargo Clean Energy prize. Their startup Paramaxx has a proprietary technology that can extract valuable natural minerals such as magnesium, nitrogen and phosphorus from industrial waste.

NuMat Technologies was one of two teams that reached the Saturday-afternoon finals round of four teams via the Wild Card Challenge. The other was Ischiban from the University of Cincinnati, a medical device startup company that develops comprehensive diagnostic and monitoring systems for emergency, mobile and long-term applications to aid in the assessment of neurological status for conditions like stroke.

Athena Laboratories, which was first runner-up, is the first team from McCombs’ Masters of Science in Technology (MSTC) program to make it to the Global Venture Labs finals. Athena CEO Ravine Woods said, “We’re super excited and very proud to be in the finals.” Athena Laboratories is a medical device company whose FemtoSmooth™ laser technology can treat cellulite in a minimally invasive, less painful manner.

Rounding out the finals was Sustainable Agriculture Solutions (SAS) from Universidad de Los Andes in Colombia. SAS will produce an enhanced-efficiency fertilizer incorporating a patented nanotechnology called CDS® that protects crop nutrients, saving in fertilizer cost, increasing productivity and safeguarding the environment.

The Global Investment Venture Labs Competition simulates the real-world process of raising venture capital. It is a unique partnership that brings together graduate students and business leaders. The judges function as an investment group seeking to reach consensus on the business venture they would most likely fund. The quality of the idea, the strength of the management team and the clarity and persuasiveness of the written plan and oral presentation all influence the judges’ decisions.

Begun at the University of Texas at Austin by MBA students in 1984, the Venture Labs Investment Competition is the oldest new venture competition in the world, and it provides MBA student teams with a chance to simulate the real world process of raising venture capital.

The competition was sponsored by Jon Brumley Texas Venture Labs. An interdisciplinary education and research initiative, Venture Labs promotes new venture creation at The University of Texas at Austin through education and mentoring, market and business plan validation, team-building and networking and direct links to resources and funding.

2012 Global Venture Labs Investment Competition

Finals

Saturday, May 5

Room 204

2:30 PM      Sustainable Agriculture

                     Universidad de Los Andes

3:25 PM      NuMat Technologies

                   Northwestern University

4:20 PM      Athena Laboratories

                   University of Texas at Austin

5:15 PM      Ischiban

                   University of Cincinnati

2012 Global Venture Labs Investment Competition
Saturday, May 5

th

Craig Nemec Achievement Challenges

Austin Ventures
Room 101

9:30 AMeyeQ
10:05 AMFlue-tubes
10:40 AMKentucky Chia
11:15 AMReceBuy

BBVA Compass
Room 102

9:30 AMBoston Mountain
10:05 AMSolvert
10:40 AMPartie Poche

NASDAQ OMX
Room 103

9:30 AMFlexLeg
10:05 AMFoodtrucks
10:40 AMSensorius
11:15 AMRobertson Academy

Palo Alto Software
Room 104

9:30 AMPer’Fit
10:05 AMNovoView Diagnostics
10:40 AMCarbon Zero
Prime IX Investments
Room 107

9:30 AMCorrosion Solutions
10:05 AMiSpies
10:40 AM EpiQi Sciences

ProQuest
Room 108

9:30 AMBio-fiend
10:05 AMLeiCMOS
10:40 AMTimamu Food Solutions

Semifinals

Division I – Room 202

9:00 AMHavtek
9:35 AMSustainable Agriculture
10:10 AMQualaris Healthcare
10:45 AMInnovostics
11:20 AM NuMat Technologies

Division II – Room 203

9:00 AMParamaxx
9:35 AMFashion Forward Maternity
10:10 AMLEMM Technologies
10:45 AM Athena Laboratories
11:20 AM Ischiban

Allen Gilmer                        

Drilling Info

Ashley Grosh                     

Wells Fargo Environmental Affairs

Doug Hackney                   

Enterprise Group

Rebecca Klein                    

Klein Energy

Doug Mangum                   

Wells Fargo Bank

Division I                                          

Ed Ellett                               

Vyopta

Ron Kessler                        

Ron Kessler Group

Robert Reeves                   

Datical

Mike Shultz                         

Infoglide Software Corporation

Division II

Jim Cox                                

CPA

Mike Turner                        

Waveset Technologies

Mike Frost                           

Siemens

Bill Hopkins                        

The Knowledge Capital Group

I want to invite you to two exciting events coming up the first week of May and sponsored by Texas Venture Labs.

The first is our semi-annual Venture Expo, where we showcase both companies that are based in Central Texas and are currently Texas Venture Labs portfolio companies, as well as investment opportunities from around the campus including the Austin Technology Incubator and the Office of Technology commercialization.  This event is on Thursday, May 3, from 1:00-7:30 PM at the AT&T Center on the UT Campus. The event costs $50, which includes the company presentations, a t-shirt, and cocktails and appetizers at a trade show event shared with the Global Investment Competition which will feature more than 50 startup companies from around Central Texas and the world ready for financing. This event sells out quickly; registration and details are here.

The second event is our annual Global Venture Labs Investment Competition, which features start-up businesses from graduate students from around the world that are raising money to launch their companies as they graduate this spring. This is a truly exciting event that is judged by many Texas entrepreneurs and investors. It runs May 3, 4 and 5, with the Venture Showcase on May 3 run in conjunction with the Venture Expo above. All of these judging events are open to the public and the details are here.

I look forward to catching up in person at these events and please forward this on to anyone who might be interested.

Sincerely,

Rob Adams

by: Clint Ellenberg - Principal, Texas Venture Labs

Spring 2012 brought me the opportunity to work with three separate companies as a Principal in Texas Venture Labs.  One of the companies, VecturaLux, aims to increase broadband capacity over existing network infrastructure.  The exciting technology was developed as a PhD project at the University of Texas; it is an inexpensive chip that can be installed on network switches to increase bandwidth by 15X over multimode fiber at longer than traditional ranges.  Multimode fiber is the traditional fiber optic cable widely used in home and office networks, and it is often referred to as Ethernet cable. Because they can use their existing multimode fiber, the increased bandwidth resulting from VecturaLux’s product can help a variety of customers cope with increased data needs without the need for expensive infrastructure upgrades.  Without VecturaLux, aging data networks that are looking to boost capacity would have to spend significant amounts of time and money pulling out existing fibers to install new ones. 

Challenges and Opportunities

As VecturaLux is still in development mode, the sky is the limit with regard to target markets.  When considering such a promising product, the first question is: “Where should we focus our sales efforts?”  My team is answering just this question by researching a variety of markets in which VecturaLux could be sold.  Ideal markets are growing quickly, have significant data needs, and have an aging infrastructure.  Some examples include data centers, university campuses, and office buildings.  Knowing the target customer can help with design specifications and feature content, and it can help develop the future sales approach.  We are conducting our research using a variety of methods: we are calling potential customers, working with the IT departments at several university campuses, utilizing the UT alumni network for knowledge, and searching through library sources. 

Our work with VecturaLux is counter to “traditional” market validation, wherein a company identifies a pain point and develops a product to solve that pain.  VecturaLux has a great product in mind—they are focused more on finding the best place to sell it.  This approach frequently occurs with technologies from academic research, as a breakthrough then leads to a search for the best application. 

The competitive landscape is also critical to both young and seasoned companies.  My team is working to understand the competition VecturaLux will face, and how these competitors will hold up against this new entrant.  It is clear that VecturaLux will offer speed and distance that can’t be matched by existing offerings—just where to position the product within the competition is something we aim to help with. When looking at competition, we must also consider substitutes.   There are competing technologies available, but they all require extremely expensive hardware or the aforementioned major infrastructure upgrades.  There are no products at the VecturaLux price point that offer similar bandwidth increases without upgrading wiring, cables, or electronics. 

As the company turns toward production decisions, financial projections will be very important.  My team is estimating likely revenues, costs, and funding in order to generate near-term financial projections in the form of a flexible financial model.  This model will be used for staffing and production decision making, and can help when considering funding requirements. 

Next Steps

As the semester unfolds, my team continues its efforts in market validation, competitive analysis, and financial modeling.  This involves interviews with prospective customers, significant research from a variety of data sources, and a healthy dose of teamwork. 

Our goal is to provide VecturaLux with a robust set of recommendations and research that can be applied throughout the product development and funding stages.  VecturaLux has success in its future, and we are excited to play a part! 

____________________________________________

Clint Ellenberg is a second-year MBA student at The University of Texas concentrating in entrepreneurship and finance.  A graduate of Vanderbilt University, he worked for five years as a healthcare consultant, specializing in implementation and product management.  

Austin, Texas — Graduate students working on green start-up business ideas should take note of a new opportunity at this year’s Global Venture Labs Investment Competition (VLIC) at the University of Texas at Austin McCombs School of Business. 2012 will be the first year the Wells Fargo Clean Energy Prize of $10,000 will be awarded to the best start-up focused on improving energy efficiency, innovating energy delivery and offering energy from alternative fuels for both residential and commercial energy sectors.

“This partnership with Wells Fargo is ideal due to its commitment to renewable energy and entrepreneurial endeavors in this rapidly growing sector,” said Rob Adams, VLIC director.  “Wells Fargo is a leader in Clean Energy and their reach and abilities are of real value to the companies raising money through the Venture Labs process.”

Graduate students from universities around the globe come to Austin each May to present their business ideas at VLIC. From among myriad offerings, panels of investors select the best new-venture opportunity. With aspiring entrepreneurs soliciting start-up funds from experienced investors, the competition simulates the real-world process of raising venture capital.

Teams have until the first week of April to apply. Interested students should contact Ann Whitt, and visit the VLIC website for more information.

By: Sid Allen – Principal, Texas Venture Labs

Last summer I passed up an internship to participate in a great program called SEAL (Student Entrepreneur Acceleration and Launch) at the Austin Technology Incubator (ATI ). SEAL replicates the conditions of a start-up – no pay, no phone line, no sympathy. The program “provides a structured problem solving and business building environment for student entrepreneurs who want to take their business ideas to the next level.”  It also allowed my co-founders and me to focus all of our time on our company, Pheir Healthcare. Pheir was going to solve the problem of medication administration errors in nursing homes. Currently half of all errors of this type occur in nursing homes, mainly because they rely on pen and paper to do this laborious task, leaving lots of room for human error. Pheir was going to offer software to automate the process on a mobile device through the software-as-a-service model, making it affordable to even the poorest nursing homes. Over the summer, we learned some very valuable lessons. These lessons aren’t revolutionary, but I guess I was snoozing when they were taught in business school.

First, domain knowledge is paramount. This is often taught in business school, but is often dismissed and countered with numerous examples of successful entrepreneurs with no prior domain knowledge. I don’t believe it’s required, but it definitely makes the job easier. My team had domain knowledge in the industry, but not with our target market. Luckily, we had two great advisors (courtesy of participation in SEAL), Steve Andrade and Kyle Cox, who had enough knowledge in their fingertips to save us hours of time and frustration. The point is that if domain knowledge doesn’t exist in the co-founding team, it should find a few advisors to fill this gap. A few hours of time with these advisors could save an entrepreneur weeks of effort.

Second, competitor analysis should be one of the first steps of market validation and it should be taken very seriously. Books have been written about market validation, which is an extremely complicated process. Competitor analysis is part of this and we diligently scrubbed hundreds of companies from Hoover’s and other databases. After this and some time spent doing Google searches, we found 4-5 minor competitors and quickly moved on to the real “hard core” part of market validation – primary research through talking to customers, measuring and defining pain and fancy surveys. After deciding that there was in fact a need in the market place for our product, we turned back to looking closer at competitors. Over the course of several weeks, we discovered more than 30 competitors making a similar product! They weren’t all huge, but that knowledge would have saved us months of research trying to figure out if there was any substantial market demand for our product. A detailed study of competitors also gave us incredible insight into other aspects of the market, such as price points, channel partnerships, product features and marketing strategies. It turns out that what we thought was a low price point (from earlier competitor analysis) was actually a high price point – our revenue models were laughable!

Finally, I learned the importance of measuring opportunity cost when starting a new venture. We believe we can make a product better than 29 of our competitors, we believe we can sell it and we believe we can do this with a fair investment of seed money. However, we also realized it would take us several years to reach critical mass, several more years to return to our current salary levels and maybe a decade to have a business we were proud of.  We knew no investor would consider investing in a company like this and in the end, we felt the same way about our own time and money.

So we killed it. RIP Pheir.

Sid Allen is a native of Round Rock, Texas. After graduating from West Point and serving in the U.S. Army for 10 years, he decided to come back home to pursue his dream of starting a company. He recently founded Escapaide.com, a website offering personalized travel itineraries for international business travelers.