Ventilator Splitter Enterprise Case
Hi Colby,
Thank you for taking a look at this and sharing with potentially interested parties. I've attached a short and sweet deck as well and an image as well.
Quick intro: We launched a company to manufacture and distribute ventilator splitters to address the critical shortage of ventilators nationally and globally. We were in the early planning phase for a think tank/consulting/contracting business when this pandemic started. Given that, the only responsible option was to pivot and do something to help during the crisis. We did some research and secured the factory and started the company the next day. We have an amazing team moving really quickly; we just need capital to scale. Hospitals are requesting these today in NY state today, and in Louisiana, and though we haven't started marketing, we have had a number of order inquiries from CA through word of mouth.
Details: The splitters are being made by injection molding and are made of medical grade, FDA approved polypropylene. Two units will split the ventilator between two people; six units will allow one ventilator to serve four people. The FDA and CDC recently approved this use of ventilators, and we are in the process of submitting for our Emergency Use Authorization.
We ordered the first mold and have it ready to go; it is an aluminum two cavity mold, which will allow us to produce 4800-5800 splitters per day. The cost of the mold was $28,000, and the unit price will be $0.37 (together around $0.51 total per unit). There is a limited life to aluminum molds, so the second mold we order will be steel; it is around the same cost but has a run life in the millions rather than the 100,000s, lowering total unit cost. We started with the aluminum mold because the steel takes 4 weeks to make.
We plan to distribute to individual hospitals and contract with government agencies buying COVID supplies. The goal is to sell them at a reasonable cost, donate where needed--help save as many people as possible while creating jobs and making some money for those supporting the initiative. Doing well by doing good is the goal.
Important to note that these are single use items; the entire "circuit"--everything that is not the ventilator itself--is switched out on a frequent basis (every 12 hrs to a few days). There is an inflow and an outflow line, both of which need to split. The demand will be huge, and no one else is injection molding these...3D printing is really slow and comparatively expensive.
And there is no more affordable safety net for hospitals for who may not have enough ventilators available.
Financing: We are looking for angel investors (in the true sense of the word) and have launched a small GoFundMe to get us started.
We are structuring the raise as a financing agreement with a revenue share rather than traditional equity. Once the company is profitable, investors will receive all net revenue until the benchmarks below. After that, 50% of net revenue in a waterfall structure.
10k-25k -- 110% 25k-50k -- 120% 50k+ -- 125%
Investment is structured this way because we expect this to be a 12-18 month project. After this first wave of this virus, we will have a vaccine, more ventilators, and more complex ventilator splitters that provide pip/peep control. Also, in this time, I know some investors may appreciate a fast return on their investment.
If we can raise $200k, we can quickly scale and catch the peak here and globally. If we raise less, we scale a little slower. I have personally invested and am confident that we'll be successful.
History: The original paper documenting this type of modification of a ventilator was published in 2006. Since then, the only known use has been after the Vegas massacre, and now in Italy and NY. NY began splitting ventilators between patients before the FDA approved it. Cuomo said, when speaking of splitting ventilators, "It's difficult to perform, it's experimental, but at this point we have no alternatives."
-- Elizabeth Reynolds CEO - Verdant City www.verdant-city.com linkedin.com/in/elizabethemelia
