Lexington, KY - For years, surveys have shown that the number one fear people have in life is public speaking. Number two on the list – death. The finals of the third annual Five Across pitch contest wasn’t a matter of life or death, but for the local entrepreneurial contestants, it was pretty important.
Mike Sullivan, vice president for operations for Alliance Virtual Offices, won the grand prize in the 5 Across finals. Sullivan’s pitch for AVO beat four other contenders at the event, sponsored by the Bluegrass Business Development Partnership, and Awesome Inc., where the contest was staged.
Five Across derives its name from its bi-monthly format: 5 start-up companies pitch their ideas to judges for 5 minutes using no more than 5 PowerPoint slides for a prize of $500. Only in the finals, the grand prize was $4,000; second place was worth $1,000.
“I think it’s great. I’m ecstatic about it,” said Sullivan. “One of the benefits of doing this was to show the pitch. I have been making pitches to a lot of investors. The pitches we’ve used haven’t been near (as good) as this one was. We polished it,” added Sullivan, who earned a Bachelor of Science degree from Centre College and an MBA from the University of Kentucky.
In his pitch to a panel of four judges, Sullivan described his budding company as a virtual office and meeting room wholesaling system. He says Alliance Virtual Offices combines the three components necessary to service mobile and work-from-home professionals, namely people (staff on site), place (offices you can visit and use) and technology (tools to do the job).
“One of our philosophies is that it’s better to own a client than to own or lease office space,” Sullivan told the crowd. “We have 650 global locations. They are our partners. We don’t own them, but they allow us to use their address and use their people to help service our clients.
In his pitch, Sullivan explained that Alliance Virtual Offices gives clients a business address they can put on their business cards. It can be as impressive as a Manhattan or Beverly Hills address or one in a high rise or a suburban office park in any number of cities nationally and worldwide. Live receptionists answer phones in your company’s name. There are automated telecom systems and on-demand meeting and conference rooms.
Sullivan claims his virtual office business has all the benefits of rental income, such as stability and returning revenue, but none of the risks involved in owning or leasing property.
The company’s pro forma says 14,000 customers are needed in order to earn a strong return on investment in three years. AVO now has about 500 clients, up 43 percent from six months ago. “There will be 1.3 billion mobile workers by 2015,” said Sullivan, citing a report by International Data Corporation (IDC). “The opportunity for us, and other companies like us, is unlimited to reach workers who need virtual office services.”
AVO seeks $4 million to shift out of its beta platform into a full blown effort. Sullivan says the company would pour the $4 million into sales, advertising, marketing, technology and other operations. Interestingly, Sullivan claims the company will double in size by mid-2013, even without any capital infusion.
By nature, business pitches are optimistic. But judges in this competition, like Randall Stevens, owner of local software companies Archvision and Punndit, look for more.
“We look at the concept, its uniqueness and viability. Do they have a team in place that can execute that? Are they in the right market segment,” asks Stevens. “I saw it in some of the things I looked at today. Can you make money over time or will it be a market segment that declines? Some markets are open and unlimited with potential growth,” he advised.
Brian Raney is a co-founder of Awesome, Inc., which opened to help establish and grow high tech, creative, and entrepreneurial companies and communities. He’s pleased at the progress the 5 Across competition has made in three years.
“Prize money more than doubled over last year and almost tripled from the first year.” As for the future of the contest, Raney is confident about the entrepreneurial atmosphere in Lexington. “We hope the overall quality of the pitches will increase. We’ve noticed that the pitches this year have been of a much higher quality and were ‘well baked’”.
Sullivan’s team has been actively seeking money for six or eight months. “We haven’t gotten the right partner yet,” he admits. “But we know exactly what we’ll do with the money. We could take less, but it would change our business plan.”
Finishing second in the pitch competition was Brian Adams of Earthineer, the name combining earth and engineering, said Adams. His company’s network is designed exclusively for homesteading and sustainable living. It allows people to socialize, find experts and trade commodities. It’s useful for people who love to garden, can, preserve, make beer or wine or keep livestock.