The Pitch: "We sell cool, fun equipment for skateboarding and snow sports. Designers bring us original products: We buy the patents and handle manufacturing and distribution. Our products are known for their advanced design. The Flowboard, our top seller, has a greater range of movement than a regular skateboard. The demand for our products has been so high that we haven't been able to keep up. During the last two holiday seasons, we sold out of almost everything. We're in the process of acquiring three new products to launch in the fall. We're looking to raise capital to finance inventory, ramp up marketing, and develop new products."


Owners: Michael Kern and Scott Rickett

Location: Long Beach, California

Employees: 10

2008 Revenue: $3 million

2009 Projected Revenue: $10 million

Products: Flowboard, a 14-wheeled skateboard; Snowskate, a skateboard that works on snow; and Snowchuck, a snowball launcher

Profit Margin: About 60 percent

Retailers: Some 800 stores, including Wal-Mart, Target, and Toys "R" Us

Funding Sought: $3 million


The Experts Weigh In

May Need More Capital

Sport Technology certainly has a hot product line. I couldn't find a negative review online, and the products, particularly the Flowboard, seem to have breakthrough designs. The company has an interesting product acquisition model, and I like that it owns the patents. I'm concerned about the revenue projections, though. Any time a company says it can triple revenue in a year, you have to wonder about its ability to scale. The $3 million may be sufficient for inventory and operations, but it seems that the company might need more for sales and marketing support.

Fran Seegull
Managing director
Funk Ventures
Santa Monica, California

Continue to Bootstrap

This company has definite traction in the market, and it has lined up strong retailers. It could benefit in this economy, because its products are relatively inexpensive in comparison with many other products in the skating and snow-sports categories. The question is whether these products will be novelty items or gain lasting, widespread appeal. The margins are very good, so Sport Technology should be able to achieve more growth internally. It would serve the owners well to bootstrap a little longer and avoid diluting their stake in the company.

Dan Googel
Principal
Easton Capital Investment Group
New York City

Keep the Patents Coming

Sport Technology really isn't in the business of selling skateboarding products. It's in the business of finding and buying patents. But what gives this company a competitive advantage in finding the next hot product? Investors will need confidence that this team can replicate those results over and over again. Sport Technology should also focus on defending the proprietary nature of its products. The patents offer some protection, but there aren't tremendous barriers to entry. Overall, though, the pitch is intriguing.

John Burns
General partner
Highland Consumer Fund Highland Capital Partners
Lexington, Massachusetts