Augment Therapy Wins $200K Investment at Shark Tank
POLAND, Ohio — Standing under the spotlight in front of more than 350 in attendance Friday evening at the Shark Tank event at The Lake Club, Lindsay Watson said her legs started to shake and she didn’t hear “a whole lot of what was happening” as Eugene Calabria, CEO of GBS Corp., spoke to her from the pool of “Sharks” sitting in front of the stage
“I will tell you that I am interested in an investment of 20% of your business for $200,000,” Calabria said.
Watson was one of seven finalists — all women — at the event, hosted by the Youngstown Business Incubator. She had successfully pitched her company, Augment Therapy, to the sharks, advancing her to the semi-finals where she took part in a question-and-answer period.
The sharks — Calabria; Ed Muransky, owner and CEO of The Muransky Companies; Catherine Mott, founder of BlueTree Capital Group; Anthony Vross, co-owner of Simon Roofing; and John Masternick, CEO of Windsor House Inc. — questioned Watson on her company’s product, its development, target market and company valuation.
Augment Therapy combines telehealth capability and augmented reality experiences to improve the delivery of pediatric physical therapy, she said. Essentially, children engage with the software and think they’re playing a video game, while therapists accumulate and analyze objective data.
Watson, CEO of Augment Therapy, co-founded the company with its chief technology officer, Steve Blake. They have been approached by pediatric hospitals to test the product and put it to use. And while the company doesn’t have a formal investment round going just yet, Watson made it clear to the sharks that she wasn’t looking for a hand out.
“I don’t ask for a blank check from investors,” she said. “I want smart money.”
After Calabria made his intentions known, Muransky, Mott and Masternick wanted in as well. The four decided to split the $200,000 evenly between them for investments of $50,000 apiece
Watson contained her excitement well.
“I was not expecting that to happen,” she said. “I went into this with the plan of not necessarily discussing the valuation stage. I was thinking that if I got an investment, it would be a smaller investment.”
And while there will be due diligence to conduct on her end, “Just to have that kind of offering and that support in this setting was a bonus and more than worth our time to be here tonight,” she said
That wouldn’t be the end of Watson’s night, as she also took first place for $6,000 of the $10,000 in play from Medical Mutual, the event’s sponsor. The money will allow Augment Therapy to continue developing its product and bring in consultants to accelerate the business to get the product “into the right places so that we can do the most amount of good with the most amount of children,” she said.
“When you’re an entrepreneur, you hear ‘no’ more than you hear ‘yes,’ ” she said. “To hear ‘yes’ when you’re on the stage is pretty exciting.”
Masternick commended Watson’s project model and timing in the industry.
“Telemedicine is the way of the future,” he said. “And she’s got a great product. It really pulls at your heartstrings too.”
Calabria said Augment Therapy is “forward-thinking and disruptive,” and it was “a little bit longer along the continuum of development,” with its product than some of the other entrepreneurs.
Disruption is a key criterion for investment, he said, which he characterized by convenience, cost-effectiveness, flexibility and “better outcomes than what people are doing today,” he said.” And when it comes to pediatric therapy, “We clearly feel that there is an unmet need in the community,” Calabria said
Augment Therapy had been a YBI portfolio company and Watson has had “a lot of entrepreneurial support through our [entrepreneur-in-residence] system and the JumpStart [Entrepreneurial] Network, and I think that shows,” said Barb Ewing, YBI CEO.
“She just had a different level of understanding of what the sharks were going to ask,” she said.
Three of the sharks — Masternick, Muransky and Calabria — are involved in the health-care industry, and five of the finalists are in health care or a related business. While Masternick said he was surprised that health care had such a strong showing in the event, he doesn’t believe those startups had an advantage
“I was stunned when we saw the 11 presenters; I believe six of them were health-care related,” he said. “That really shocked me. I expected it to be heavier on manufacturing. And I was happy to see that it was health-care related, because that’s my field. It just tells you how big of a part of our economy health care is.”
Other entrepreneurs who took home prizes include Jaynanne Sheehan, founder of PlateMap, who earned $3,000 for second place, and Larissa Smith, CEO of FishMySpot, who won the $1,000 third-place prize. At the behest of the sharks, Smith became the seventh finalist after the sharks and audience each selected three of their own.
FishMySpot is a mobile app for owners of ponds to connect with people looking for a place to fish. Subscribers can use the app to find private fishing spots. The prize money will help Smith continue development and work toward building her inventory of ponds, which she said has been the greatest challenge.
“They’re not necessarily the typical profile that’s on social media,” she said. “So we’re really having to use other avenues to get to them.”
Smith’s biggest takeaway from the event was the insight from the sharks that getting FishMySpot where it needs to be may take more financing than she originally thought, she said. Smith had asked for $200,000 to add to the $50,000 the company has already raised.
“Based on the sharks’ response, we probably need upward of at least half of a million dollars, which we may. But we are very confident with the directors and the team that we have at our company that we really can scale it and be fiscally responsible as well,” she said
Smith appreciated the support she received from the sharks and her peers at the event, and said pitch events like Shark Tank shows the entrepreneurial spirit in northeastern Ohio
“The support that all the entrepreneurs received tonight is just astounding,” she said
That support has helped Sheehan balance her workload between developing PlateMap and finishing her senior year at Kent State University where she majors in computer information systems. Sheehan will graduate in a week, she said, and her classes have actually helped her to develop her product alongside her schoolwork
“A lot of my classes revolve around business and developing my business through Kent State University’s entrepreneurship program,” she said. “It was actually beneficial to have other skill sets being rolled in on another class that I could use for this venture. So, the balance almost felt natural.”
PlateMap is a mobile app for families who have kids with food allergies. The purpose is to educate and help users “properly maintain allergy awareness and prevent allergic reactions,” she said. The app uses a barcode scanner that, after entering specific information about a child’s allergy, will scan the barcode on a food product and relay ingredient information to see if it will affect the child.
Since starting work on PlateMap, Sheehan has won a few pitch events. That helped her hone her “verbiage” and how to work her pitch by determining “what makes the most sense and how the audience perceives your message,” she said. As she pitches at other events, she gets valuable feedback from judges on what is working and what isn’t, and gets experience talking to large crowds or in one-on-one situations, she said
The $3,000 second place prize will help her further develop PlateMap and put it in the hands of her customers, she said. She’ll also look to bring on developers, which has been a challenge, she said.
“You’ve got to hustle and you’ve got to figure out what’s going to work,” she said. “If you can’t find it, you turn another way and look somewhere else.”
Other finalists include Mishmoccs handmade leather baby moccasins, Purpose: The Therapeutic Subscription Box, Unchained coffee filters and Pinnacle Health Concepts. All of the founders are women, which the YBI’s Ewing said is “a fantastic thing,” and gives credence to the importance of initiatives like the Women in Entrepreneurship program at the YBI and the talent of the women entrepreneurs in the area
“It was such an incredible night, I don’t even have words to describe it,” Ewing said. “We knew it would be a good night. We had no idea how great of a night it would be.
All 11 of the entrepreneurs delivered “perfect pitches” and received great response from the community and from the sharks, she said. Ultimately, the event underscored the importance of reigniting the area’s entrepreneurial spirit, she said.
“It just reminds us how good we are as a community and how much talent we have,” she said. “And that we have an opportunity to rebuild our economy from the inside out rather than looking to outsiders to come in and save us.”
Even if an entrepreneur didn’t walk away with a check, Ewing said they will still benefit from the experience and continued involvement with the YBI and its programs. For entrepreneurs who have an opportunity, the YBI staff wants to work with them “and get them to the point where they can be successful,” she said.
And she’s already excited for next year’s Shark Tank.
“It’s going to be bigger, badder and better than this year,” she said. “We’ve learned a lot of lessons. We’ve done a lot of good work and I can’t wait for it.”
Copyright 2020 The Business Journal, Youngstown, Ohio.