Fund Raising Efforts During a Tumultuous Economic Period

Nicholas Aretakis 27 Aug 2009

Arkayne targeted angel investors in probably one of the worst economic periods over the past decade – next to the dot-coms bubble bursting from 2000 – 2001 and the events surrounding the World Trade Center bombings (911 – September 11, 2001), there has probably been no worse time to attempt to raise capital than during the recent liquidity crisis sustained from late 2008 into early 2009. Unfortunately, this was the same time that Arkayne required capital to expand operations.

During difficult economic times, investors challenge fledgling companies to demonstrate product functionality, generate revenues and produce an accelerated path to profitability. This resulted in Arkayne refining its business model. The founders of Arkayne reached into their own pockets and continued to self-fund the company, demonstrating a product and service model before accepting any outside capital. In doing so, investors had a unique opportunity, to invest in a business that was already delivering a robust product and service, now in need of additional staffing to bring the product to market and proliferate the offering.

Arkayne refined its pitch to potential investors, demonstrating not only a functioning product, but also focusing on the experience of the management team. Nicholas Aretakis, President and CEO, has over 25 years of high technology experience, having brought two technology companies public in the 90’s as a lead executive, driving revenues from under $20M to over $300M for both enterprises in three years consecutively, raising over $200M of individual and institutional money, with a return on investment for investors in the billions of dollars. Paul Kenjora, CTO and VP Development, was formerly a prodigious developer at PayPal and eBay, with over a dozen years in the Internet space and a specialization in data mining and large scale architecture. The company recruited Bill Bradford, VP Sales and Marketing, who has 23 years of high tech experience, selling complex solutions to enterprise customers and leading global sales and marketing teams for multi-billion dollar technology corporations.

The original expectations were to raise a half million dollars to support the operations for 12 – 16 months, and within a few months, the founders decided to expand the angel round and have now raised almost three quarters of a million dollars and have increased the angel round to one million. In four months since initial funding was received, Arkayne has already released a product and started customer engagement. Arkayne expects to generate revenue in our second quarter, and break even or be profitable within the first year.