by Rosalie Murphy
Three local startups walked away with $15,000 investments from The Bit Factory, Akron’s software startup accelerator, at a “Shark Tank”-style competition on Thursday night.
And for the first time in the competition’s history, a fourth startup decided to walk away.
FUEL Akron 2018, The Bit Factory’s third annual pitch competition for entrepreneurs, offers four local companies the chance to negotiate for investment. This year’s finalists were:
- The Event Discovery Company, whose product Evitt aims to simplify online calendar management
- LinearLabs, which uses AI and big data to perform advanced consumer research
- Quanterra Software, which analyzes drone images to count cattle for ranchers and farmers
- ReqPrep, whose digital platform streamlines the ordering of diagnostic tests
The Event Discovery Company, founded by three recent college graduates and based in Youngstown, has onboard 35 organizations to its platform since launching their beta in August. One of those customers is paying the subscription fee of $50 per month. They aim to onboard 100 more organizations in the next three months, including one national partner.
The “sharks” — Bounce Innovation Hub CEO Doug Weintraub, Paradigm Equity Strategies CEO Bill Manby, and Fiducius chairman and CEO Jim Zedella — offered the company a $15,000 investment. They negotiated with the co-founders on the conversion discount, initially asking for 25 percent, then dropping to 10 percent if the founders successfully raised $250,000.
LinearLabs, based in Cleveland, has built an AI product that analyzes “unsolicited conversational data” for market research. They charge their customers — sellers of consumer packaged goods, advertising agencies, and CRMs — $20,000 per year per user for access to the service.
The investors of the self-described “Silicon Tundra” were impressed with LinearLabs and quickly reached a deal that ensured The Bit Factory could continue to invest in the company as long as it surrendered its shareholder votes to the co-founders.
ReqPrep’s primary customers are diagnosis labs, which gave the investors pause. They believe the independent lab market is shrinking as large companies like Quest Diagnostics purchase these facilities. Still, after a back-and-forth about the company’s valuation, they invested $15,000.
Quanterra Software wouldn’t negotiate, however. After a pun-filled presentation on the company’s tool, the COWculator, co-founder Mayer Ginsburg said he believed the company was worth $3.75 million. The investors felt it should be half that. “$1.9 (million)?” Mayer asked, aghast, before simply walking offstage.
He was the first in three years to turn down investment, organizers said.
The three companies who received investments will be admitted to The Bit Factory’s Product Development Accelerator in January, where they will work with local advisers to create or iterate their minimum viable products. Quanterra Software may still be part of the product development accelerator, and the door remains open to future investment, organizers said.
The Bit Factory operates out of Bounce Innovation Hub, the city-owned business incubator formerly known as the Akron Global Business Accelerator.
Rosalie Murphy is Editor-in-Chief of The Devil Strip.