business: home safety products
founders: Andrew Ive, 30; Kevin Dodge, 28
year started: 1997
location: San Francisco
1997 revenues: N/A
1998 revenues: about $1 million
start-up costs: $250,000 (first round); $300,000 (second round)
sources: college professors; a wealthy Harvard alumnus
Andrew Ive and Kevin Dodge considered seeking venture capital to fund their company, which sells emergency ladders that help people escape their homes during a fire. After doing their homework, however, they opted not to waste the time. "Most VCs are focused on high tech," says Ive. "It's incredibly hard to find one that will loan to a consumer goods company."
They also considered raising bigger bucks by selling a greater percentage of the company. Instead, they chose to sell about 30 percent of the company to multiple parties, including a couple of college professors they knew from Harvard. College connections then led the partners to an additional angel investor, a wealthy Harvard alumnus. (Angel investors are wealthy individuals who put some of their disposable income into start-ups, assuming risk in exchange for a percentage of the profits.)
With funding secured, the pair convinced major outlets such as Kmart to carry their ladders, which have tangle-free steps suspended on heavy-duty, fire-resistant webbing. They also earned a spot in the Sears catalog, among others.
With success under their belts, Ive and Dodge are currently developing a second home safety product they hope to release in March.