The Pitch: "When firefighters enter a burning building, they need an air supply. In a high-rise, they must lug air canisters up and down many flights of stairs, because a bottle lasts as little as 17 minutes. The Rescue Air system solves this problem. Outside the building, firefighters connect the trucks they use to refill air tanks to our system. Inside the building, our system delivers air to stations where firefighters can fill their breathing apparatuses. Fifteen states now require systems like ours in new buildings that are 75 feet or higher. There's great interest in our technology overseas. We want capital to expand globally, starting in the Middle East."
Founder: Anthony Turiello
Location: San Carlos, California
2008 Revenue: $6.5 million
2009 Projected Revenue: $8.5 million
Price: $250,000 to $300,000 for the average installation
Profit Margin: 35 percent
Systems Installed To Date: Nearly 300, mostly in new buildings
Funding Sought: $7 million to $10 million
The Experts Weigh In
Regulations are key
I've spoken with a few fire chiefs and EMTs, and they all agree that moving equipment is labor intensive. The product looks promising. Unfortunately, the company's growth is tied to new construction. New buildings are being built, but the industry has slowed, and the sales cycle for a product like this tends to be long. The regulations are the X-factor that will move the product a little faster. Turiello really should highlight the support that the Rescue Air system has received from firefighters and make it clear to investors that his product is compliant with safety standards.
I think this is a very viable product. Having $6.5 million in revenue is very impressive with only seven employees. There is a lot more growth in new construction in emerging markets, like the Middle East. That's a good rationale for going international sooner. At the same time, with only seven employees, the company may not have the operations in position to scale. Right now, an investor would probably make a smaller investment, in the $3 million to $5 million range. Turiello should focus on domestic growth and pick a few high-priority customers to show initial traction overseas.
Focus on retrofits
In tough economic times, developers may choose to forgo this system if it isn't a requirement. But installing systems in existing buildings could be a big market for Rescue Air. As new projects slow down, more attention will be spent on renovating and updating existing buildings, so the retrofit market might be more fruitful for a period of time. If Rescue Air focuses on selling retrofits for now, it will build its customer base and reputation, so that the company will be in a good position when the economy improves and real estate developers start spending on new projects again.
The Halo Funds
Palo Alto, California