by tmckissick » Fri Jan 09, 2009 8:16 am
Shaya,
This group can definitely provide you with some Stirling market insights and background info. HOWEVER, before that step, I think it would be appropriate for you to clarify exactly where MAPA Group's interests lie. I have read MAPA Group's entire web site and while it's very impressive, I see a few potential conflicts. I have personal experience with business services type companies that have vastly different root interests in a deal. If you have a specific company in mind, that becomes their problem, but in general, the people of this group and their respective companies are oriented toward the success of the entire Stirling related industry in solving as many world problems as it can. I think I speak for a fair amount of the group when I say we are not interested in building up something to be merged or acquired and have the owners paid off. We often see Stirling development startup companies announce big plans and then make silly decisions and then 5 years later, they still haven't hit the commercial market. To date, I only know of very few "commercial" manufacturers of these engines but they've oddly selected such tight markets that we cannot even get direct contact with them. I see that as the obvious result of a restrictive investment.
As a side bar (not that this topic isn't already a side bar from Stirling technology itself - sorry Stan but this is key to industry success), the right design could be applicable to so many markets that it becomes hard to identify just the best one until test results become available. The successful Stirling would be akin to designing the electric motor or internal combustion engine in that the applications are too numerous to mention. The R&D phase is shockingly complicated and requires advanced knowledge in materials, thermodynamics, fluid dynamics, computer modeling and very advanced machining techniques. Each of these skill sets are highly exclusive and expensive. For these reasons, potentially successful design companies will have two major attributes. They will be only minimally capitalized (no collateral) and will have more concentration on the engine than it's application. This is in contrast to any investor who is unable to see the big picture and mandates a prearranged business plan. The plan needs to be flexible enough to switch gears (applications) should results be different than expected. I personally have not found a single investor willing to facilitate the R&D phase to gain 'engine only' data before requiring committments to a single application.
For these reasons, investment deals seem overly risky (much greater than the standard risks) and they fall through because of the level of equity the investor wants. One group actually valued this risk at 5 board members out of 7 PLUS 80% ownership... and then had the audacity to pitch it like it was golden. Stirling designers aren't as concerned with the money side early on as much as the opportunity to tap the various future applications so they want to maintain ownership of their companies. This contrasts with the concepts of going public, merging-up and being acquired.
If your company can play by these general guidelines, there are a number of companies and individual startups that have strong promise available that you may be interested in. Many members of this group can point you toward them and I know of others that you won't find in the public domain. First, however, tell us your company's goals.
Since this is distantly off the topic of "Stirling engines for education", I would encourage you to contact me at mckissick@gmail.com to continue any business talk in depth.
Todd McKissick
My appologies to Brent, Stan and the other members for this little off-topic rant.