Advisory boards can help point the way
AMBITIOUS COMPANIES aiming to attract investment one day could do worse than follow Auckland technology venture Fingermark in putting an advisory board in place.
Small growth companies may not be able to afford a full board, but that does not mean they can’t adopt good governance practice early.
Fingermark specialises in touchscreen technology, with its biggest opportunities in ‘‘wayfinding’’ screens in massive sites such as hospitals, and in outdoor digital signage for operations such as drive-through takeaway restaurants.
The business, based in Parnell, Auckland, was launched in 2005 with $12,000 of investment capital, but with more capital needed and investors showing interest, its founder, Luke Irving, decided it was time to work on making the company a more investible prospect.
Fingermark had come close to winning a big investment, so Irving had been given an insight into what was needed.
That prompted him to put together an advisory board to oversee operations, add expertise and develop strategy.
Advisory board members have been chosen for their specialist areas of expertise and to bring something Fingermark needs.
Lawyer James Doughty, of Claymore Partners, is a specialist in corporate law and the structuring of commercial enterprises.
Toby King, of investment banking operation Cameron & Co, knows how to prepare a company for external investment.
And there is tech company specialist Martin Reigel, whose time with tech success NextWindows brings Fingermark the experience in how to grow a profitable company operating in a fast changing technology niche.
Irving said an advisory board was far cheaper than constituting a full board and, he admits, for someone like him – a self-driven entrepreneur – it was time to learn how to fit into a more formal corporate structure.
‘‘The advisory board is a stepping stone to full governance, which would have been a real culture shock for someone like myself,’’ said Irving.
It was also nice to be able to test his thoughts and plans on experienced people able to bring a more objective view to the business.
‘‘They have a wealth of experience in other sectors, a lot of experience which can cross over into our market,’’ he said.
The move was part of a strategy to build value into the company by making it more sustainable, more able to continue should he step under a bus.
Fingermark would not be caught out if an opportunity to secure a new investor, particularly a large corporate investor, materialised.
‘‘Next time we get entertained by these guys in two to three years’ time, we want to be ready,’’ Irving said.
Between 2009 and 2012, the international market for touchscreens grew by 700 per cent, Fingermark says, and there are an estimated 3 million touchscreens in use in signage and professional use around the world.
However, Fingermark has its eye on two niche market opportunities.
The first is that it has been making inroads in wayfinding technology in places such as hospitals.
It’s a big business offering significant efficiency gains for hospitals.
Getting patients to appointments and treatment on time helps health boards make significant savings, because they deal with hundreds of thousands of patients a year.
Irving also sees potential in outside digital signage for operations such as fast-food restaurants.
He is especially focused on locations with tough climactic conditions, such as extremely strong sunlight.
Several international deals are already in the pipeline.