Local start-ups pitch investors at ESIF 2002

Flytrap, a local Tacoma area start-up, pitched over 100 investors at ESIF 2002 this week at Seattle’s Sheraton Hotel. This was the third annual Early Stage Investment Forum hosted by the Tacoma Tech Consortium of the Tacoma Chamber of Commerce and Northwest Entrepreneur Network. Flytrap competed with over 170 other companies to become one of only twenty that were allowed to present at the ESIF event. Venture capitalists and individual “angel” investors paid $345 each to be allowed to listen to these 15 minute pre-screened Power Point pitches for their investment capital.

Flytrap is a computer network security company that insists your company’s password protected local area network is vulnerable to attack by someone with only minimal computer skills. “A disgruntled employee could destroy your server, or anyone of its nodes without much effort,” stated Flytrap President Vaughan Emery. “Most companies with perimeter firewalls are under a false sense of security that they are protecting their computer systems from attack.”

“Eighty percent of all network attacks occur from within the network and, therefore, perimeter firewalls are helpless against internal attacks. We have a design concept that can defeat these and other hacker attacks,” Emery insisted.

Flytrap is seeking $500,000 and expects post-investment sales to grow to $3.4 million within two years. Past ESIF presenters have received anywhere from $65,000 to $16,500,000 in investment capital.

Cold Fusion, another ESIF presenter, has successfully launched protein and vitamin enriched frozen juice bars as an alternative to PowerBars, and “are the health food junkies answer to Popsicles,” said founder Collin Madden.

Cold Fusion is already in 600 stores including Safeway, QFC, Costco, and GNC. Madden, whose own family is part of the Vitamilk Co. dynasty seeks $5 million. Vice president of marketing Lara Jackle is the former vice president of marketing at BalanceBar which grew sales from $10 million to $120 million within three years.

An impressive management team and a distribution agreement with Nestle/ Haagen-Dazs made Cold Fusion one of the winners of ESIF’s unique “Venture Bucks” contest. Each of the 100 plus attendees was given a million “Venture Bucks” to invest Thursday and Friday in a minimum of three presenting companies. This made for a “mini-Oscar” event at the end of this years annual Early Stage Investment Forum as the contest winners were announced.

“Today’s venture capitalists, in a world recovering from the dot com crash, Enron book magic, and the 911 catastrophe, are extremely wary and much slower to commit hard dollars than in the prior decade,” offered Marilyn Holt, CEO of Holt Capital which brokers debt, equity and mergers and acquisitions.

Which of ESIF’s twenty presenters will be blessed with real cash won’t be known for days, weeks, and even months as the venture capitalists pursue their first impressions with time consuming in-depth analysis.

David King Keller, President of Isotek, co-founder of the Social Entrepreneurs of Washington, and author of “How To Invest In Commercial Real Estate,” can be reached at dkeller@isotek.net, or 206/937-5655.