Synchronize Your Watches

Great Expectations

Consider the case of Reflective Technologies Inc. Bob Rizika, 33, along with his brother Adam, 37, and his cousin Dan Rizika, 34, developed technology that converts proprietary materials into reflectors and co-founded their Cambridge, Massachusetts, company in 1993. These reflectors, when embedded into fabrics, coatings and other materials, reflect oncoming light in a way that illuminates the full silhouette of the wearer. The technology led to Reflective's first product, IllumiNite, a safety-enhancing reflective fabric that has applications in activewear, outerwear and industrial markets.

After two challenging years of research and development, sales have grown steadily from $600,000 in 1996 to a projected $6.1 million this year. In addition, the company has attracted strong strategic and financial partners along the way: Giant Taiwanese textile manufacturer Formosa Taffeta, for example, made an investment in the company.

In July, Reflective raised $7.5 million in venture capital. According to Reflective's CFO, Stuart Krentcil, funds from the deal were earmarked for, among other things, stepping up production to meet what the company anticipates will be burgeoning worldwide demand for its product.

In many ways, says Krentcil, the firm's latest deal sealed its future fate. After all, investors who make a large financial commitment must someday cash out. Therefore, Reflective will at some point need to consider either being acquired or going public.

If they choose the latter scenario, the Rizikas and Krentcil will have to decide when the timing is optimal. Here are some of the factors they should be considering.

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This article was originally published in the November 1999 print edition of Entrepreneur with the headline: Synchronize Your Watches.

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