story Josh Souza
jsouza@thecitywire.com
There are five entrepreneurial teams putting the final touches on their startup ventures as they wrap up the first five weeks of the “Summer 2014 ARK Challenge.” The teams are gearing up for the Demo Day event slated for Thursday (Sept. 4) at Crystal Bridges Museum of American Art in Bentonville.
The team founders hail from as far away as the Philippines, but four of the participants from the five teams are on their home court in Northwest Arkansas.
Program director Jeannette Balleza said this summer program has been different than the two prior ARK Challenge competitions. She said the $250,000 investment was split evenly among five teams. It was all invested on the front-end, as an accelerator as opposed to saving the bulk of the money as a grand prize at the end of the competition.
“We recruited more experienced founder teams and invested $50,000 of seed funding in each of the five selected startups. We received well over 70 applications from across the world for this summer program,” Balleza said.
The teams relinquished a 6% equity stake in their company for the $50,000 investment and entrance into the ARK Challenge program, which also provides mentoring from a group of community-based and national experts. Participants also have access to the program space located in East Square Plaza on the square in downtown Fayetteville.
Balleza said the Demo Day event was moved to the midway point in the 12-week competition to give all five teams their best chance for securing added capital and expertise needed to grow their ventures.
Unlike the prior two competitions, the teams are not vying for one pot of money to be handed out by the ARK Challenge Partners, but they are playing to a broad crowd of investors with still five weeks to continue working on their product and service offerings.
She said the teams are eager to present their best pitches in hopes of securing more capital before investor groups on Demo Day. The program requirements stipulate that the startups must provide some type of solutions for the retail, transportation/logistics and food industries, the core business sectors in Northwest Arkansas.
Following are the five companies in the challenge.
• HIPAA Risk Management (HRM) from Fayetteville, Austin, and California
Founders are Anna Drachenberg, Catherine Ganahl, Katie Lay and Elizabeth Green.
HRM's cloud technology is hailed as a cost-effective online data security tool used by healthcare organizations to protect electronic health information. In this era of heightened security breach, security application tools are trending well, according to financial analysts.
The startup has a team of nine, including cofounders, and they are working with nearly 100 customers and close to closing on $500,000 in investments.
• Kernel from Springdale, and Aurora, Colo.
Founders are Justin Farmer and Travis Fischer
Kernel Inc. has been in business more than two years specializing in network security with clients throughout the world in hostile environments. Its founding members have a combined 18 years of background experience and found a need that wasn’t being satisfied in today’s market. The security realm is expensive and often unaffordable to the small business market which in turn is often overlooked.
Kernel’s business solution, dubbed “Neo,” brings network security into an affordable automated platform utilized by various businesses from the small home office to large corporate networks.
“At this stage, we have half of our product package complete, the physical portion which gets shipped to customers, while continuing active development on the other parts of the Neo system,” Farmer said.
He said the company obtained its first pre-order this week. The company is seeking $300,000 in capital for a 30% stake in their business as they plan to continue development, add staff and mass produce their Neo product.
• Skosay from Fayetteville
Founders are Justin Urso and Jason Kohrig
Skosay’s solution is aimed at providing privacy for consumers who share their feedback with companies. Skosay provides a private 2-way feedback channel for customers and business that digitizes traditional comment card process and can help managers gather customer feedback from across multiple channels.
“The ARK has provided great mentorship opportunities where we have received so much great feedback, but we are also working hard on holding steady on our vision,” Urso said.
He said the Skosay team is pleased with its progress over the past five weeks and is still a few days away from having a prototype ready.
“By November, we plan to conduct our first beta test. We are planning to close a seed round of investment in the next two months that will allow us to add additional talent to our great team and increase our customer acquisition efforts,” Urso said.
• HumanLink from Rogers, and Dallas
Founders are Venkatesh Vadlamani, Murali Kota and Taylor Johnson
HumanLink is an online community that matches families and elders with qualified home caregivers. Led by Murali Kota and Venkatesh Vadlamani (both coders), HumanLink provides social proof for the in-home eldercare market.
Both founders have previous business experience, and Venkatesh has managed his own hedge fund focused on emerging markets, and also managed a startup offering technology solutions to farmers in Iowa.
This threesome hope to capitalize on the $50 billion elder healthcare market in the U.S., which includes daycare and in-home care.
• 5 CrowdToGo, from Seattle, Wash., and the Philippines
Founders are Jet Castro, Greg Hermo, and Nevs Custodio
The CrowdToGo team includes two technical gurus and one businessman who have worked together on multiple projects over the past three years. Jet Castro, a former application architect at J.B. Hunt Transport, said he understood the problem of last-mile delivery. CrowdToGo plans to offer solutions that replicate Uber for last-mile delivery for things like groceries, prescriptions and takeout.
The founder team has aligned with a development team in the Philippines to allow for expanded bandwidth when necessary and to accommodate scaling and quick development. The team has built at least six other projects together.