Case Scenario: COMPANY: Brain Sentry
Business idea: Create a device that helps coaches, athletic trainers, officials, and parents recognize when an athlete has received a blow to the head strong enough that it may have caused a concussion. pitch: Approximately 135 million Americans play organized team sports each year. one of the biggest fears of sports participants is receiving a blow to the head that results in a concussion. A problem with concussions is that unlike a ligament tear or a shoulder sprain, a concussion is not always apparent or detectable. As a result, athletes often receive a blow to the head and continue playing without knowing that they are at risk for further injury. When a blow to the head is observed by a coach or parent, it is also hard to know if it was severe enough to cause concern. Sometimes athletes will actually downplay the severity of a blow to the head because they don't want to be removed from a game. The potential impact of sport-related concussions is heart-wrenching. The big fear in an athlete continuing to play after suffering a concussion is the possibility of experiencing second impact syndrome (SIS), which can occur if the athlete sustains a second blow. The second blow may be relatively minor and can cause rapid brain swelling, respiratory failure, permanent brain damage, and possible death. Tragically, athletes less than 18 years old are the most susceptible to SIS. Brain Sentry was founded to make it easier to detect sports-related concussions. The company makes an unobtrusive helmet-mounted device that signals an alert when an athlete suffers a rapid and potentially dangerous acceleration to the head. The sensor is placed at the base of the rear of the helmet.
In the event of a big acceleration to the head, a bright red LED light illuminates and blinks every three seconds. once the sensor flashes a red light, the player should be taken off the field and examined for the possibility of a head injury prior to returning to play. If the player is cleared to play, the coach or other designated adult simply resets the sensor to turn off the blinking light. The sensor keeps track of how many times it has been activated. If, within 30 days of the first alert, a second big impact is detected, the red light will flash quickly twice every three seconds. The sensor detects approximately 2 percent of the hardest hits, so it does not significantly affect the flow of the game. The sensor is light (one ounce), fully sealed, and is waterproof. It runs on a battery that doesn't need to be recharged during the course of a regular sports season. The Brain Sentry monitor costs approximately $50 per helmet. It has to be replaced each season. Brain Sentry is initially targeting football, hockey, and lacrosse, the three most popular helmeted sports. It is also developing sensors for biking, alpine, and other helmeted activities. The company has gained some early traction. In 2013, the Louisiana State University football team used Brain Sentry-equipped helmets during practices and scrimmages, and the Arena Football League is reportedly adopting Brain Sentry for all its teams. The Brain Sentry device was used by the newcastle, oklahoma, high school football team during the 2013 season.
1. Based on the material covered in this chapter, what questions would you ask the firm's founders before making your funding decision? What answers would satisfy you?
2. If you had to make your decision on just the information provided in the pitch and on the company's website, would you fund this company? Why or why not?