Why Partner with IVI? Reason #1:
Create Long-Term Investment Value
The State of Michigan, corporations, and private investors capitalized the Michigan Product Development Fund with US$4.3 million. IVI transacted royalty and equity investments in early stage SMEs with high growth and liquidity potential, and those with limited divestiture such as medium growth and family owned firms. Investments included:
- US$700,000 investment in Applied Intelligent Systems Inc
- US$700,000 investment in Neogen Corp
- US$200,000 investment in Personal Bibliographic Software
- US$700,000 investment in Gateway Systems Inc
- US$330,000 investment in Face Technologies
The remainder of capital was invested in follow-on financings to the portfolio. Details on three investments in the portfolio are provided below:
Applied Intelligent Systems, Inc. designs and manufactures advanced-imaging processing computers for the vision, image processing and artificial intelligence markets. The US$700,000 investment financed the completion of AISIs third product line, and its marketing introduction in the US, Europe and Asia. In 1998, AISI was acquired by
Electro-Scientific Industries to compliment its line of products used in the manufacturing of semiconductors, passive components, and IC and PCB packaging.
This early stage transaction returned US$500,000 in cash and 10x equity gains just three years after investment.
Personal Bibliographic Software, Inc. develops and markets specialized computer programs for accessing and managing bibliographic data from on-line databases. Corporate researchers, librarians, teachers and students use these products to simplify search efforts and reduce cost. The US$200,000 investment financed the conversion of Pro-Search from the IBM to Apple computer platform, and the sales launch of its products to US & European customers with royalties structured in perpetuity. In June 1996, PBS was acquired by the
Institute for Scientific Information, a subsidiary of the Thomson Corporation with PBS products being developed, supported and sold by
ISI Researchsoft of Berkeley and Carlsbad, California.
Neogen develops and markets immunoassay diagnostic kits and electronic instruments for the animal and plant health care industries. The Fund participated in a US$2,800,000 financing to finance product enhancements and working capital needs.
Neogen went public on NASDAQ fifteen months after investment and yielded a valuation increase from US$10MM to US$22MM. Since investment, Neogen has grown from 40 to over 200 employees, sales increased from US$7,000,000 to US$46,000,000 (end of fiscal yr. 2003),profits rose from an a operating loss to a net income of +US$4,600,000 with payment of federal, state and city taxes of US$2,400,000. For the 2nd consecutive year, Neogen was named to Fortune Magazine's Fortune Small Business list of the 100 fastest growing, publicly held small companies in the USA.
The key to successful investing is a shared interest with management in seeing the company and its products prosper. Its IVIs belief that superior investments involve strong management teams with constructive investors rather than weak managers controlled by investors.
The investment helped PBS in a variety of ways other than providing just capital. Fund managers provided PBS with management assistance and advice in the market positioning of our products, refined our market definition and counseled us in accounting and financial reporting. PBS benefits from this coaching as it grows from a small to a medium size business. Managing rapid growth is often the most difficult part of business development, and the Funds expertise was invaluable to us in maintaining a sense of balance in the growth process.
Victor Rosenberg, Ph.D., President
Personal Bibliographic Software, Inc.
In addition to providing counsel to AISI at the Board level, IVI helped us access new customers for our products and technologies, and ensured that key decision makers were present during our sales presentations. On other occasions they attended sales calls with key accounts and communicated its reason for investing in AISI. This provided the company with a greater measure of creditability and staying power than could be attained by our own words or actions.
James Anderson, President
Applied Intelligent Systems, Inc.
Product development financing can be particularly helpful to technology-based companies. I was particularly impressed with their thorough and constructive approach to one company on whose board I serve.
Robert Pavey, General Partner
A true test of an advisors skill is the financial results that it achieves in fund management and SMEs development impact on the local economy. These investments demonstrate IVIs ability to accomplish both of these objectives for our investors.
Consider IVI as your investment advisor and partner in planning and executing quasi-equity schemes. We can help you avoid the learning curve costs that even skilled investors inadvertently incur when executing new investment programs.
Contact IVI to discuss your needs.