The start-up technology company -- whose sonar system prevents ships from running aground -- will be named today as the winner of this year's $50,000 Rhode Island Business Plan Competition.
Despite a recent management shakeup, the 1-year-old FarSounder bested five other Rhode Island technology start-ups to win this year's competition. The company will receive its cash prize tonight at Venture 2002 in Warwick, the state's fourth annual venture-capital conference.
FarSounder's sonar technology acts as a headlight, giving captains the ability to see obstacles underwater in front of their ships. Founded by Jim Miller, a University of Rhode Island professor, and one of his former students, Matt Zimmerman, the technology took five years to develop and was partially financed by a $145,000 loan from the state's Slater Center of Ocean Technology.
A panel of local business executives, entrepreneurs, venture capitalists and educators judged FarSounder and the five other start-ups on commercial viability and technology innovation.
Having a commercial customer, a tested product and a defined market niche put FarSounder ahead of the competition, according to Garrett Hunter, president of the Business Development Company of Rhode Island. The BDC and the Rhode Island Technology Council were co-managers of this year's competition.
"FarSounder's plan, product and approach reflects the entrepreneurial spirit that has always found a home in Rhode Island," said Hunter, in a statement.
The company plans to use the prize money to finish product development, said Miller. FarSounder pulled in $250,000 in sales last year and is expecting a similar amount for 2002. The company's first target market is mega-yachts, the large pleasure boats, and it says it expects to become profitable by 2005.
This isn't the first business award for FarSounder. The seven-person company took home the top honor in Westchester County, New York's annual Venture Capital Survivor competition last fall.
Looking to capitalize on its first win, Farsounder's cofounding technologists hired an experienced business strategist to grow the company. Dave Wood, a former venture capitalist and entrepreneur, came on board as chief executive officer at the end of last year. But last month, Wood returned to New York state, parting with the company over "philosophical" differences, according to Miller.
FarSounder says it expects to hire a replacement for Wood in the first quarter of next year. In the meantime, the company has appointed Zimmerman's mother, Cheryl Zimmerman -- a former engineer for General Electric Corp. and Helix Corp. -- as chief operating officer.
This is the second year for the business-plan competition, which had 82 applicants from seven states. In addition to winning the cash, FarSounder will also present its business plan to venture capitalists and other attendees at today's venture forum.