In May 2016, I flew out to Los Angeles to film the CNBC primetime show, Make Me A Millionaire Inventor, which follows inventors on their journey to bring their products to fruition. Each episode ends with a pitch to potential investors who offer the promise of helping the inventors take their business to the next level. As an angel investor who actively invests in and mentors startups, I thought it would be fun to participate as a "shark."

Before filming the show, I was able to perform some preliminary research on the inventors; however, they did not know anything about me beforehand. The founders who pitched to me were Adrian Lievano and Matt Lisle, two mechanical engineers who recently graduated from the University of Pennsylvania (with high honors) and received a $200,000 grant from the University to start the company while in school. They pitched a water filtration business, and (spoiler alert!) I invested $20,000 on the show for 1 percent of the company known as Everwaters.

Starting the relationship immediately after filming

After filming the negotiation on set, we returned to our respective hotels with a tentative deal in hand, although I was told that any deals consummated on the show were non-binding and subject to further investor diligence, given that the filming on set is the first time the two parties actually meet. Additionally, if we kept the deal, we would have to keep it a secret until the episode aired later in November 2016.

With the above understanding, Adrian and Matt sent me an email to kick off the relationship. As we exchanged information back and forth into the evening, I sensed that there would be no doubt the deal would stick. While there was much to be worked out, we dove right in. Soon thereafter, they sent me their pitch deck so we could begin working on their story to other investors, and I sent them names of people (e.g. entrepreneurs who had gone on a similar journey, investors, etc.) to whom I could potentially introduce them. We set a time to meet in NYC in person in what would become one of many multiple-hour meetings over the course of the next year where we talked through their goals and strategic needs.

Raising capital and finalizing the product offering

After working with them on their pitch deck and seeing them practice the pitch, I led their investment round through the New York Angels. Adrian and Matt convinced other angel investors with their vision and secured ~$200,000 in funding from several prominent investors and the NY Angels Entrepreneurial Catalyst Fund. As part of the financing, I joined their Board, and we formalized the legal documentation around the investment.

With funding in hand, Adrian and Matt had the resources to create multiple prototypes of their water filter. They completed the design and had a third party laboratory test it to NSF (National Sanitation Foundation) standards. Their product now reduces 70+ contaminants, including lead, arsenic, bacteria and more. They also began work on the next generation of products and have pursued a patent on the use of the moringa (a "super food") as an anti-bacterial coating on their plant-based water filters.

Joining an accelerator and recruiting an advisory board

While funding can be a huge determinant in the success of a business, having the right investors and advisors is also extremely important. We discussed the Parallel 18 accelerator in Puerto Rico where I serve as a mentor, and Adrian and Matt applied and were accepted. They received another $40,000 in non-dilutive funding from P18, and they streamlined their development plan and market focus while in the program.

We also discussed the formation of an advisory board, and they honed in on all the areas where extra help was needed. I performed some outreach through my networks for candidates, and Adrian and Matt recruited two executives to their advisory board from the consumer (e.g. Unilever and Clorox) and government (e.g. White House water campaign) sectors. They continue to think strategically about their advisory board and are looking to add more leaders with experience in consumer-facing technologies, ecommerce, mobile platforms, and UX/UI design.

Verifying product market fit and targeting emerging markets

While in Parallel 18, Adrian and Matt completed a successful Kickstarter campaign in which they generated their first $25,000+ in revenues and sold their product to consumers in 10 different countries. One of their crucial insights from this campaign was to focus on the market opportunity in East Africa where their product was most needed and in demand.

They conducted market research and user testing in Africa, and they finished a pilot with an East African distributor to confirm pricing and overall product-market fit. They completed a mass manufacturing order of the product and are shipping their first batch of inventory to Kenya. The promise of a fast-growing and highly attractive African market awaits.

Focusing on revenues and direct mobile commerce in Africa

Adrian and Matt have come a long way from the pitch on TV last May to launching in Kenya, but there is still much more to be done. Their goal is to build a scalable, ecommerce platform in East Africa that integrates mobile banking technology and a fulfillment network to deliver water filters directly to consumers in emerging markets.

Going forward, they will need to generate revenues and prove the business is sustainable before expanding to other emerging markets globally. They'll also need to recruit developers and seek more grants around their moringa research. Finally, they'll need to convince strategic investors/venture capitalists with experience in Africa to provide funding through the next stage of growth.

Working hard towards a future with clean water for all

When I initially invested in Adrian and Matt, I was betting less on their prototype on set and more on their long-term potential. I saw two individuals whom I believed were incredibly smart and hard working. I believed they would use their technical backgrounds to innovate in product research and design to provide life-changing, clean water products to families around the world.

We've since been in touch almost daily since that first day on set. We've exchanged articles on industry news, events for entrepreneurs, and potential investors. We've discussed market strategy, insurance, investor updates, fundraising structures, and media exposure. I've introduced them to angels, venture capitalists, advisors, entrepreneurs, and personal friends who have provided perspective and advice.

I've watched the Everwaters founders go through all the ups and downs of a business over the course of the past year, and they've been coachable every step of the way. No matter the outcome, if the past year is any indication, I believe they have a great chance of success. I know I will enjoy being there with them on the journey.

Published on: Apr 18, 2017