From effluent
into affluent

By Lyn Danninger

The road to riches for one small local technology company may be in the sewer pipe.

Environmental Waste Management Systems Inc. has developed a transportable wastewater treatment system that is safer and more efficient than traditional septic tanks and cesspool systems.

In Hawaii, there are about 185,000 cesspools and 4,500 septic tank systems in ground. Estimates are that 50 percent or more of these systems either perform poorly or have totally failed, the company said.

Headquartered at the old Waialua Sugar Mill, where it manufactures the systems, the 3-year old company already invested $200,000 and has received another $250,000 in a federal grant.

Environmental Waste Management has a full-time staff of three as well as help from three University of Hawaii graduate student interns.

Company President Harold Nagato pitched his company yesterday to planning consultants, investors and industry experts at a special meeting of the Hawaii Venture Capital Association.

The company was one of four young technology firms in a new program, the Pre-Seed Technology Review Forum, which was put together by the state's High Technology Development Corp. and unveiled at the meeting.

To keep growing, Environmental Waste Management and the other three companies who presented their business plans will have to attract outside investment. The panel's job was to critique the companies' plans and offer suggestions on how they can make themselves more attractive to investors.

At the height of the technology bubble in 1999, such companies would likely have had an easier time attracting capital. Now it's a different environment, said panel member Haviland Wright, director of the Kauai Small Business Development Center.

"I think it would be fair to say that in 1999, at the height of things, people were buying stories. Now people want to see results. They want to see a real product that can be sold in the near term," he said.

Michael Muthig, another panel member and vice president of US Innovations LLC in Columbia. S.C., noted that while money is still available for such young companies, investors want to be convinced.

"The money is still there but people are looking a little more closely and doing more due diligence," he said.

But while investor emphasis in the past was on computer technology companies, now they are looking to place money with a wider variety of businesses they may better understand. That change in thinking should help companies like Environmental Waste Management.

The panel's tips for the company included considering strategic partners that would allow it easier access and entry into other markets and perhaps licensing its product to give it a greater presence in a wider range of markets without having to set up manufacturing facilities.

But by the same token, panel members said, it also needs to protect itself against competition by making sure its intellectual property rights and patents are adequate.

Given the company's progress so far and the worldwide market potential of its product, the panel also encouraged it to set its sights higher in terms of the amount of capital it would like to attract.

"Sometimes it's easier to raise $20 million than $2 million," said panel member Ricardo Galindez.

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