Angel investors with UAA ties get on board with ‘SUV of personal watercraft’
by Jamie Gonzales |
Last April, Brian McKinnon nearly swept the podium at the Alaska Business Plan Competition, earning first and third with his entrepreneurial ideas solidified in spreadsheets and market analysis charts.
Yesterday, he stood by in City Hall as Al Hermann, a UAA professor and founder of the new angel investor group Alaska Accelerator Fund, along with professors and co-managers Forrest Nabors (UAA) and Ky Holland (Alaska Pacific University) announced the first Alaska start-up company selected by their board for investment, Mackinnon Marine, at a press conference headlined by Mayor Dan Sullivan. McKinnon's company recently introduced the Alaska-tested "SUV of personal watercraft," the AlumaSki. Ideal for water rescue in tough terrain as well as accessing remote areas, the watercraft has been eyeballed and test driven by the Anchorage Fire Department and the Air Force.
"Alaska Accelerator Fund is the state's first early-stage fund," said Hermann, differentiating between mid- and late-stage funds. "We invest in ideas."
The Alaska Accelerator Fund is one of three 49th State Angel Fund partner funds. A $13.2 million allocation from the U.S. Department of the Treasury's State Small Business Credit Initiative led to the creation of the 49th State Angel Fund and the establishment of partner angel investor or venture capital groups in Anchorage. In addition to 49SAF dollars, partner funds also include money from private investors who want to encourage entrepreneurship in Anchorage.
"It's inspirational to see a group of people come together and help each other," said McKinnon. Alaska Accelerator Fund investment in Mackinnon Marine will allow the company to manufacture about three dozen AlumaSkis. Buyers ranging from military to backcountry hunters have expressed interest. McKinnon and his associates, Harry Leffler, head of manufacturing, and Slavik Lund, director of business support and a UAA senior set to graduate with a degree in political science, will be heading up to the Fairbanks Outdoor show later this week show off their craft there.
Hermann took a moment at the lectern to invite press conference attendees to the Alaska Business Plan Competition where they could hear more innovative ideas like McKinnon's.
The judges of this year's Alaska Business Plan Competition are looking forward to hearing 10-minute presentations on Sunday, April 27, where they'll determine first-, second- and third-place winners. What's in it for competitors? A chance to get on the radar of investors in Alaska.
From North Sloper to dual-company entrepreneur
A nasty bout of chemical pneumonia sparked McKinnon's first entrepreneurial idea. Until about three years ago, McKinnon drove a tanker truck on the North Slope, filling heating fuel tanks and worksite heavy equipment. These tankers pump at about 60-120 gallons/minute. For comparison, your local gas station pump spits fuel at about 10 gallons/minute.
High pressure pumping, McKinnon's livelihood on the Slope, can cause fuel around a pump nozzle to aerosolize. And if you're a worker standing nearby, said McKinnon, those fuel particulates are going to build up in your lungs every time you inhale.
"My lungs collapsed, I had so much fluid in my lungs," he said.
It was a slow road back to health and when McKinnon returned to light duty, he had in mind a closed fueling system that would keep workers from being exposed to those aerosolized fuel particles. He assumed it already existed, so he and his boss started shopping around. When they came up empty, McKinnon realized he might just be onto something.
His idea became Aknuna Technologies. With encouragement from Al Hermann, professor of entrepreneurship, and help from some UAA students, McKinnon developed a winning business plan for the 2013 Alaska Business Plan Competition. Now, BP is interested.
McKinnon also seized third place for his second idea-turned-prototype. He and Leffler turned in the judge-wowing business plan for Mackinnon Marine, which is now poised for growth with investment from Alaska Accelerator Fund.
McKinnon doesn't have the pedigree you might expect from an entrepreneur who is finding early success. No business degree, no background in engineering. But this third-generation Alaskan does have deep background in do-it-yourself.
"I grew up building everything," McKinnon said. "My dad used to always tell us, if it exists, someone built it with their hands and so can you. I've literally built everything I've had. If I wanted a dirt bike, my dad would go get a trashed dirt bike and I'd go out and mow lawns and buy the right parts for it and figure out how to put it together."
So, when he found himself with a shop to work on his ideas for Aknuna Technologies, he brought is some tools and started to tinker in the off-hours.
"We grew up building air boats and sprint boats and doing pretty rough rivers," McKinnon said. As a teenager, he and his brother had busted the hulls on some jet skis trying to navigate upstream on Twentymile River. "I wanted to go up rapids. No one has really done that. So I designed [the AlumaSki] to go up rapids."
When some folks from the Air Force came by to look at his designs for the closed fueling system they walked past an AlumaSki prototype and had to stop and ask questions. Soon, McKinnon was fielding follow-up calls from Air Force Special Operations Command.
"I went to Al and said, 'Al, I think I have something else pretty big here.' We both decided to go for it."
And the ideas keep coming, but the important ingredient he's missing is time.
"This is keeping me busy so I've had to step away from a couple of them," said McKinnon. In one case, he handed off a project for a mobile fish-processing cart to a student and told him to run with it.
Ever been riverbank fishing and dreaded the slimy part of your day, fileting and packaging your catch? Maybe soon you'll be able to pawn off the task on a parking lot entrepreneur who'll do the hard part for $5 and let you travel home with professionally packaged filets for the freezer.
Getting to the next level may mean running smack into some barriers
Alaska is full of innovators and ripe for entrepreneurship, according to Hermann. When he arrived in Alaska just a few years ago, he was excited to step up and help revivify the Alaska Business Plan Competition and launch the Entrepreneurial Edge series of trainings and speakers, all part of his role as professor of entrepreneurship at UAA's College of Business and Public Policy.
The competition spurs Alaska entrepreneurs to flesh out their plans and do their homework so they can put their best ideas forward in front of potential investors.
What spurred McKinnon to enter last year?
"It was to give me motivation and confidence," he said. "It made me realize I had something."
Attend the competition to hear presentations on Sunday, April 27, and be inspired.
Forging your own business path in Alaska can be whatever you want it to be. If you're McKinnon and his AlumaSki associates, Leffler and Lund, product testing might even be exhilarating.
"We have two years on [prototype testing]. The first summer we figured out what it could do, top speed, the water it can go in," said McKinnon. And, for the record, it can start in eight inches of water and run in as little as two inches.
"The next year, we dedicated to breaking it. We ran it into stuff full speed. Trees, rocks, ice, banks, trying to break it, trying to find the weak points where we need to beef it up. Couldn't do it," he said. "The original prototype is still the one I ride today."
Written by Jamie Gonzales, UAA Office of University Advancement