Encore to benefit from foundation funding, wisdom. Telegraph Journal Dave MacLean reports…
Innovation: Encore Interactive Inc. fits right in the sweet spot of the New Brunswick Innovation Foundation's mandate, executive saysDave MacLean, Telegraph Journal | link to orinigal article on telegraphjournal.com
The New Brunswick Innovation Foundation has made a significant venture capital investment in a Saint John-based software company that is set to market an innovative program to telecoms and others similar service providers.The foundation made a $500,000 investment in Encore Interactive Inc., a Port City start-up that has developed cutting-edge software that will allow consumers to watch, record and share their favourite TV programs, music, photos or movies using their TV remote-control, computer or mobile phone.
“We are focused on early-stage start-up companies like Encore,” said NBIF president and CEO Calvin Milbury. “We seed these start-up growth companies with equity in the hopes of helping them grow. In addition to giving them money, we try to support them by setting up a board of directors and recruiting people onto the board who can provide value and contacts. We work with them to grow the business and we help the company raise more money, if that's needed, to support growth in the future.”
Milbury said Encore fits the stereotype of companies that are prime candidates for NBIF assistance.
“Encore fits right in the sweet spot of our mandate, so to speak,” he said. “It's a company that has developed a new and innovative product and is now venturing out to sell that product to the marketplace. It's too early and risky for bank financing, so that's where we come in and invest equity and they can take the equity and leverage it to grow their business and go ahead with their product launch and start to secure customers.
“Our goal through this investment is to support their marketing and sales efforts and the goal of bringing on the first couple of customers. In this business model, a sales contract could represent quite a large sum of money, so from there they would be building on that to expand their markets. Presumably, if all goes well over the course of the next year or two, we'd be looking at raising more money to support the ongoing growth of the company.”
Milbury said Encore's team has been hard at work developing its product and the foundation's main goal is to come in and provide whatever help it can and then get out of the picture.
“They've been at it for a couple of years and they've invested some of their own time and money and they've moved the product to the point where it's now ready to be sold and they need some capital to help support that effort,” he said.
“We believe they have the wherewithal to take this product to market and we'll be augmenting the team as we go forward with some businesspeople who can assist them in the sales process.
“It gives us a great deal of comfort to have a team of seasoned entrepreneurs and technical experts to work with.
“In the long run, our goal is to exit from the company and return money to NBIF that we can then use to support our mandate going forward.”
The key players on Encore's team are co-founders Sean Higgins, who serves as CEO, Derek Billingsley, who is the vice-president of business development, and chief technology officer Jeff Furlong.
Higgins said the NBIF assistance helps the team focus on its areas of expertise.
“It gives us a measure of financial stability and it allows us to move our focus away from professional services and allows us to really focus on our core product business,” Higgins said. “The financial stability helps us in a number of different ways. The expertise and resources and contacts that NBIF brings will help take us from a start-up mentality to the next level, including things such as corporate structure.
“We've been working with and talking to potential customers for three years and we've basically been in an R&D cycle for three years. This really helps us to bring it to the market “¦ to bring a real focus to sales, marketing and delivery to customers.
Encore will sell its software to service providers such as telephone companies, cable companies and Internet service providers.
“For instance, it will allow you to access and manage all your recorded TV shows, or your photos, your movies or music through your mobile phone, your PC and your television. Those are the consumer features in the first release and the software lays the foundation for additional features that will help manage your home energy from those same vehicles – the mobile phone, PC and TV.”
The goal, said Higgins, is to sell the software to a major service provider that could turn around and make it available to consumers as part of a bundle of features.
The end customer could be sitting at the office and would be able to control recording devices in the home by sending commands to the home through a mobile phone, for example.
Encore has a staff of 12 employees mostly focused on the R&D side, said Higgins, which makes the NBIF help even more valuable.
“They become a partner in the company and we work closely with NBIF to achieve the goals we'll lay out together. They will bring us help in getting to the next level. Their contacts and experience will be very important to us as well.”