CEO Chris Thompson
Update: 13 May 2016 - On 12 May, Cyber Physical Systems, reported its $2.4MM debt raise bringing its total capital-in to about $9.2MM, according to SEC and Crunchbase. In April 2014, Mel Taylor succeeded Thompson as CEO.-Ed.
SPLIT:SECND, the lead product of Nashville startup Cyber Physical Systems, is an automatic crash notification (ACN) system for automobiles -- and, it hopes to cruise through a Federal Communications Communications checkpoint that lies straight ahead.
If the technology -- which can be user-installed in 100 percent of autos and operates via cellular networks -- gets the FCC certification greenlight this spring that the company's founders anticipate, Split|Secnd will begin moving toward the U.S. consumer market and framing-out a $3MM to $5MM B-round capital raise, according to co-founder and CEO Chris Thompson.
Thompson graduated in 2010 from Vanderbilt University School of Engineering (VUSE) with a computer-engineering degree.
In July 2011, Thompson, now 23, and co-founder Will Green, 24, received a $500,000 investment from Tennessee Community Ventures (TNCV), a Nashville TNInvestco fund.
With that round came a promise from TNCV co-founder Eric Satz to provide another $500K, a commitment that seems likely to be fulfilled about the time Split|Secnd receives word of its application for FCC certification, later this spring.
The Split|Secnd consumer offering includes the ACN device, a help button for non-crash emergencies and a family locator service (GPS), available from $14.99 to $19.99 per month, plus $199.99 for the install-ready ACN device. It is compatible with every auto on U.S. highways and its power is from a cigarette lighter or 12V car-interior power outlet.
The company's two founders currently hold controlling interest in Split|Secnd, although Thompson acknowledged that the large capital raise looming ahead inevitably puts pressure on the owners' position.
That next-round capital will be key to breathing life into its business model: First, they plan to sell user-installed units to consumers in the auto aftermarket. Only afterward do they plan to approach major retail chains about big orders that require maintaining costly inventory, Thompson explained.
In addition, there are additional capabilities and new products that may eventually be introduced under the Split|Secnd brand. They'll need some funding, too.
The importance of that next-round capital could mean pressure from institutional investors based elsewhere for Split|Secnd to relocate from Nashville, an idea he currently rejects, he said.
Relocating would be a "last-case scenario," said Thompson, who praised Nashville for its entrepreneurial ecosystem and quality of life.
Yet, he affirmed, in Nashville it can be harder to find investors who are willing to shoulder some tech-development and consumer-marketing risks, and that could result in investment from elsewhere. In fact, he said, while the supposed shortage of IT engineering talent gets a lot of attention, in his view it is investors who are willing to invest in consumer electronics who are in shortest supply.
That said, Thompson then stressed the importance of working harder to keep talented computer-science engineering students in Nashville.
It's vital, he said, that engineering students be told early-on about the city's entrepreneurial support system. When most students look beyond graduation, said Thompson, they're thinking about finding a job a.s.a.p., and the notion of becoming a startup entrepreneur simply doesn't occur to most, unless someone or something opens their eyes to the possibilities, he said. (Related TechVenture Challenge story.)
Both Thompson and Green are Vanderbilt University graduates whose potential entrepreneurial dream-come-true was kindled by tech and venture collaborations during their undergraduate years, Thompson explained.
While he was an undergrad within Vanderbilt University School of Engineering, Thompson deliberately turned his extracurricular energies toward creating technology that would not only be "research-y," but which might also excite other students, he said.
That impulse produced WreckWatch, which was designed to enable people to use smartphones to alert emergency responders and others to a carcrash or similar incident.
Though phone-bound WreckWatch was succeeded by Split|Second, which does not rely on a personal smart phone, it was a presentation about WreckWatch that heavily influenced Split|Secnd's fate: During a campus event, Thompson presented the WreckWatch story to Vanderbilt students, contributing to spreading enthusiasm for mobile technologies that led to launch of the student-led Vanderbilt Mobile Applications Team (VMAT) program, Thompson said.
Equally important: In the audience for that WreckWatch presentation was Vic Gatto, the Solidus partner who founded Jumpstart Foundry, Thompson explained. Afterward, Gatto invited Thompson to pitch Split|Secnd in competition for a place in the inaugural 2010 Jumpstart Foundry accelerator class.
Although he had been contemplating pursuing a Ph.D. in computer science, Thompson opted for the Jumpstart learning experience.
He turned to his long-time friend, Green. Their team won a spot in Jumpstart and then, months later, they pitched their plan to investors. It was nearly nine months later that the TNCV investment actually hit the startup's bank account, said Thompson.
Thompson is quick to credit Satz and Gatto, as well as VUSE Computer Science & Engineering Program Associate Chair Doug Schmidt, Nashville Entrepreneur Center CEO Michael Burcham and others with providing advice along the way.
The startup is also advised by attorneys Roddy Bailey of Miller & Martin and Gary Montle at Waddey & Patterson, Thompson said. Much of the engineering required to develop Split|Secnd has been done by Product Creation Studio (Seattle), Thompson noted, adding that it is somewhat frustrating, but essential to draw on the right resources, wherever they are located.
By the way: Even as an undergrad, Green (a VU triple-major in math, economics and engineering science) was no stranger to entrepreneurship. Before WreckWatch, Green had provided marketing support for Great Glass Media, a venture partly funded by a grant awarded to two Owen Graduate School of Management students. As previously reported by VNC, Great Glass was formed to offer Nashville Pulse and VandyUpon.
Those two services leveraged wireless phones (initially, the iPhone) and GPS location and guidance technology to direct users to events, retail discounts and other benefits. VNC