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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. 

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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.

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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.

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Through the generous opportunity arranged by Eastern Michigan and Google, I was thrilled to have Google's Pay-per-Click advertising incorporated into my curriculum last semester. Our class was broken down into 5 groups with each group given a different account to manage.  I was assigned to manage the Arab American National Museums adwords account.  Initially, the account presented itself as a challenge to our group. We knew nothing about Adwords or the Arab American National Museum.

Success came after a stellar tour of the museum and a meeting with several different employees.  Once we understood more about the museum, it was easier to write ads to match their needs.  It might sound obvious, but the first step towards success is having open communication channels with your non-profit organization.

After understanding the company, it was time to make sense out of Adwords.  In an upcoming segment, I'll go into detail about the strategies I used to optimize campaign performance.

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Services companies like Menawat & Co. grow by adding people. Selection is a key component of this process. Menawat needs holistic thinkers who can see the path from operational details to business results. This attitude is required to help overcome inter-group division within companies and help them unite to win.

Recruits start first by working closely with Anil and Adam. Over time, they move toward becoming partners. During this period, training is geared toward acquainting new recruits with Menawat's tools.

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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.

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For Ruth and Gideon Eden, BioLumix is their second startup. They began their careers as employees. As they found their jobs buffeted by corporate takeovers, they decided to launch their own businesses in industrial biology. The first business succeeded well helping them establish a track record in the venture community.

In this segment, we continue our Financing Innovation series by focusing on how they used angel investments to fund their current startup. Angel investors are individuals who typically contribute less than $1M to a company's capital. Highlights include:

• An important motivation for Gideon and Ruth was maintaining control of their company. Because angel investors put up less capital, they are willing to accept a smaller ownership stake.
• Angels also look for less risky investments than venture capitalists who can spread risk over a larger investment portfolio. As a result, angels are less likely to push a company take business risks that might lead to very high payoffs but also carry a significant chance of failure.
• In Gideon and Ruth's perception, angels value the following items when considering whether to invest: a compelling story, a good track record for the management team, commitment from the management team often signaled by the team investing their own money first.
• BioLumix has signaled to its investors that it expects to sell itself in five years to a larger company.

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We continue our series on BioLumix with Ruth Eden, BioLumix's co-founder, Ruth Eden, providing a demonstration of the device. The demonstration illustrates how BioLumix lowers the cost of microbiological testing in industrial products by a factor of 2 to 4 (from $20 a test to possiby $5 a test). A few highlights:

• Testing is accomplished by putting the material in a specialized vial that ranges in price between $2 to $3 depending on the test. Labor time is approximately 2 minutes, and no skill is required.
• The BioLumix software automatically produces the required reports.
• Traditional testing requires a trained microbiologist who grows cultures in petri dishes and then counts them.
• The traditional report must be produced by hand.

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We continue our Network Businesses series with Vinay Gupta, CEO of Janeeva. Much like 9thX.com, the first company we interviewed in this series, Janeeva makes its business by connecting customers and sellers. In this case, the customers have outsourced some of their business activities to the sellers, and Janeeva is helping the sellers communicate back operational measurement data to the customers.

Some highlights in this segment:

• Janeeva works primarily with Global 2000 companies. These companies outsource in excess of $100 Million per year to 3 – 12 service providers.
• Customers outsource to achieve best of breed services. Measurement is critical to monitoring the success of the enterprise.
• Janeeva takes measurement data from multiple service providers, normalizes it so it is comparable, and presents it in a portal for customers to access.
• Customers already have rights to the data, so Janeeva does not have to negotiate its own deals with service providers.

We provide additional background information on Janeeva here.

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Michael Cole, VP of the Technology Innovation Group at Bank of Ann Arbor provides our first overview of bank financing in our series on Financing Innovation. In considering banks, it is important to remember that each one is unique. They specialize in different types of business and therefore are more likely to make loans to some businesses than others. That said, bank financing is a more risk averse form of financing, focusing on assuring adequate collateral to cover a loan in case of default. Highlights include:

• Bank of Ann Arbor provides loans to early stage companies and also has products for equity financing targeted and angel investors and venture capitalists.
• Bank of Ann Arbor finances working capital at the rate of 80% of a company's receivables. In case of default, a receivable is much harder to recover than an asset like a building or a piece of machinery.
• In all loans, the bank's primary concern is how it will be repaid. It looks first to the strength of the cash flows and the business. Next it looks to assets that the company holds. Finally it looks

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9thX.com kicks off our Network Businesses series. For our purposes, Network Businesses are those that exploit unique features of the Internet in their business model. Often these businesses have a unique information asset that they are able to charge for. Further, they then exploit the network to make that asset even more valuable. This model lies at the heart of major upheaval in many industries.

As explained by John Bonaccorso, 9thX.com's CEO, the 9thX.com allows people to buy and sell digital media. They are an "end-to-end" solution that allows content producers and distributors to sell their content and receive royalty payments each time the content is resold. Some highlights from this conversation:

• 9thX.com allows content producers to be paid directly for their work. Most niche content producers have too small a market for an advertising revenue model to work.
• 9thX.com spends no money on marketing. All marketing is done by word of mouth through the web site and distributors.
• 9thX.com makes its money by controlling the digital rights management system that makes royalty-based payments possible. Each time an asset is purchased or resold, 9thX.com gets 5%.
• 9thX.com's computing infrastructure is supplied by Amazon's EC2 and S3 services.

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This weekend will mark the inaugural running of the Detroit-Windsor International Film Festival. As with many non-profit undertakings, organizing the festival has been an exercise in building a network of participants and contributors. Scott Dunham, the festival manager, provides the highlights of getting this year's festival together:

• From the beginning, the commitment was to develop the festival with "Detroit style" using resources from Michigan and Windsor. The organizing committee specifically ruled out using one of the canned approaches available for purchase so as to maximize the contribution from local Michigan groups.
• Significant contributions have come from two academic institutions whose missions coincide with the goals of the festival: Wayne State University and the College for Creative Studies.
• Windsor has provided an important link into the Canadian film industry and into the Toronto Film Festival, a major North American festival.
• While the festival has been a coalition effort, John Kelly's leadership as festival director has been the glue that holds it together.

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We continue our series on financing your innovation in this interview with Sharon McRill, founder of The Betty Brigade. The Betty Brigade is a full service concierge service that will come to you to help you with everday chores and organizing tasks. It has been in existence for five years and is growing at a rate of 40%.

Many might wonder where people get the money to start a business. The financial barrier to entry in service businesses can be quite low. The Betty Brigade is one such business, and Sharon lays out the challenges she faced and how she overcame them:

• Sharon had not planned to start a business, but inspired by an episode of Oprah, she decided to invest a recent $10,000 severance package in her business.
• Needless to say, the Betty Brigade, like many services start ups, did not require much initial investment. Sharon bought a computer, a copier, and a phone.
• Working capital, the amount of money you need to keep your day to day operations running, can be a significant issue when a business first starts. Sharon received payment immediately upon rendering service, reducing the need for working capital. She now manages working capital by taking money up front for large jobs.
• Another issue is financing growth. In the early years, Sharon eschewed outside financing because she wanted to maintain control. One way she financed growth was to presell business for a year. Customers made a large up front payment that Sharon could use to finance necessary purchases for growth.

Sharon is no longer seeking to finance growth purely from internal cash flows and is currently pursuing external financing. In future segments, we will discuss her efforts and progress on this front.

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This interview with Catherine Juon, Co-Founder and Catalyst at Pure Visibility, marks the first in our series on "Financing Your Innovation". The series was sparked by the observation across multiple interview participants that they faced common problems in financing their innovative businesses.

Catherine introduces us to the issues faced in financing a services business. As we have covered previously, Pure Visibility is a three year old Internet marketing firm that helps its clients grow their businesses online. Like many services businesses, Pure Visibility has grown through bootstrapping. In their particular case, this has meant:

• They started with immediate cash flow from clients they had garnered in previous ventures so could forego bank financing.
• In addition to contract work, they established monthly recurring revenue streams that guaranteed a source of revenue.
• Working capital, the difference between payables and receivables, has been an issue as the company has grown. Pure Visbility is currently seeking bank financing to help with working capital but has also financed it through credit cards and loans from friends and family.

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Often business problems present with one set of symptoms but have an entirely different cause. Further, in the larger analysis, the symptoms may not even be worth treating. In this segment, Anil Menawat and Adam Garfein of Menawat & Company discuss how they use techniques from Profit Mapping to help their clients discern problems' root causes and what if anything they might do. A few highlights:

• Discerning the root cause of the problem is really about defining the true prolem the company faces.
• Like Root Learning, Menawat takes a holistic, collaborative approach to problem definition.
• Once the problem is defined, future scenarios can be explored to determine its potential impact on the business.
• Anil and Adam provide two concrete examples from the automobile industry and manufacturing to illustrate their points.