Hopeful Entrepreneurs Make ‘Pitch’ to Investor Panel

Brian Maddocks of Quartz Hill wants to help Americans — people around the world — get fit, but he needs about $400,000 to do it. Maddocks has developed the FT-101, an exercise bar that attaches to a door frame and gives the user a full-body and cardiovascular workout. He has put together a business plan, identified a market and built a prototype. What’s missing is the money to produce the FT-101 and the ability to get the product into the hands of fitness buffs. That is why Maddocks participated in the “Winning Pitch” program, hosted by the city of Lancaster, which aims to put entrepreneurs in front of private investors who are willing to fund start-up companies. The program was conceived by Woodland Hills real estate developer Scott Ehrlich, who borrowed the idea from the ABC reality series, “The Shark Tank.” The Small Business Development Center at College of the Canyons rounded up the investors and the city, with a grant from Wells Fargo Bank, and promoted the program to find interested entrepreneurs. The pitches were heard at Bex Restaurant in downtown Lancaster on June 14. Angel investors and venture capitalists can fill the funding gap for entrepreneurs such as Maddocks. These individuals and groups spend billions annually to assist fledgling entrepreneurs, and help convert their ideas into a viable business. “When you are an entrepreneur, whenever you can get in front of investors who can write checks, that is a plus,” Maddocks said. The city, which also helped facilitate the program, said it received more than 30 applications. Staff members selected 13 to go before the program’s investor panel. The finalists showed diversity in their products and their backgrounds. Maddocks is on active duty with the U.S. Air Force at Edwards Air Force Base. Theresa Pink, a former stuntwoman and part-time actress, developed Kidz Lidz, a spill-proof lid for fast-food cups. Other pitches included specialty harnesses for the aerospace industry, online rental of luxury gowns, a vintage clothing retailer, a board game developer and a gourmet burger and shake restaurant. Distributors have shown interest in Kids Lidz and are willing to ship it to retailers once the product gets manufactured, Pink said. Additional funding will help her get to that point. “The biggest advantage is that the product sells itself,” said Pink, a Palmdale resident. “It is going to be an international product.” All the presenters came prepared to make their pitch, even if some had ideas that were not far removed from just a concept on a piece of paper, said Stan Tomsic, one of the panelists and a member of Pasadena Angels, an investment group. Tomsic said Velma Searcy, of the harness maker Aerowire Technical Services, has a potential multi-million dollar business on her hands, while Maddocks proved to be an excellent spokesman for the FT-101. “He did exercise moves I thought only a contortionist could do,” Tomsic added. Investors say they typically want a return of five to 10 times on the original investment amount and want specific information from those seeking their assistance. Additionally, they look for a concise explanation of the business idea, the market for the product or service, a high-growth industry, and a clear picture of the cost for manufacturing, sales and marketing, and employees. One of the companies taking part in the program fell short of those expectations, because the owner underestimated the sales and marketing expense required to sell the 200,000 units needed to make a profit, Tomsic said. “It didn’t mean they weren’t on target. They just weren’t solid in the financials,” Tomsic said. Investors are also looking for what Ehrlich calls the “it” factor: certain qualities in a person making them able to implement their idea. It is an understanding that makes them work 24 hours a day, 7 days a week on their business, Ehrlich said. “It is dedication, tenacity, the ability to work alone and to solve problems,” Ehrlich said. Maddocks, Pink and the other entrepreneurs now must wait to hear the decision from investors about who receives money from Ehrlich and Tomsic. The Small Business Development Center said it is ready to assist by strengthening the proposals and working out financial information. Pink would not disclose how much money she would like to receive from investors, though she said getting Kids Lidz off the ground would not cost millions. Keeping the operations local would be a plus, as well, she said. “It would surpass my wildest dreams if we could manufacture here in Lancaster,” Pink said. “It would be another win for the city.”