Company & Background, 1-13

Capital Raising, Financial, 14-24

1. What’s the history of the company?

2. Why did you create this company?

3. How did you meet/find your team members?

4. Why are you / team right people to execute this business?

5. What’s your target market size?

6. What’s your projected market penetration in year five?

7. What’s your traction to date?

8. Why will you fail?

9. What are your biggest challenges to succeed?

10. Why will you succeed?

11. What are your unfair, sustainable competitive advantages?

12. Are you a starter or finisher?

13. Show me how you achieve the magic ratio:
Lifetime Value > Cost to Acquire & Maintain a Customer

14. What’s the capital raising history of the company? How much and on what terms?

15. When did you start raising this round? What investors have hard committed vs. soft committed?

16. Have you invested any of your own money?

17. Are your advisors or board members investing?

18. What’s your valuation? Terms?

19. How much cash is in the bank?

20. What’s your monthly burn rate (expenses not covered by operating cash flow from revenues)?

21. What’s your runway (how many months do you have before you run out of cash?) given cash in the bank and after this next round?

22. Will it get you to profitability?

23. What are your use of proceeds (how are you planning to spend the capital?) and expected results/milestones?

24. FDA clearance required or not?

1. What’s the history of the company? The co-founders saw the need and started working full-time in January of 2015. They were well aware of the persistent, massive scope of medical errors, and had extensive experience with nursing, hospitals, and business. They filed three provisional and one full patent application, and incorporated mid-2016 as a California C-corporation. The trademark for “Clear Protocol” was received in 2018. See “Traction and Milestones” slide of our presentation.
Back to the top


2. Why did you create this company? This is a humanitarian as well as a business opportunity. We feel that only a for-profit company can effectively develop and maintain an assistive technology to resolve the problem of medical errors. Currently, protocols require in-person observation and manual verification, which makes them unfeasible. Secondly, we could see major commercial potential not only in healthcare, but other national and international industries such as food processing.
Back to the top


3. How did you find your team members? We (the founders) live close to UCLA and USC where we met faculty members and visiting professors who were very willing to participate and refer expert colleagues. The academic partners are key to having our technology scientifically validated so it can be marketed in healthcare. Separately, we met Andrew Strachan, MBA, who is with the SBA advisor program, El Camino College.

Back to the top


4. Why is the Clear Protocol team the right people to execute this business? We are system integrators who know more than just hardware and software. We have key insights and a multi-disciplinary team with the right skills. Nursing, PhDs in Healthcare Informatics, Computer Science, Engineering; MBAs, Project Management, and a passion for assistive technology – building businesses and authoring scientific research in this area over many years.
Back to the top

5. What’s your target market size? Target Market (“Total Addressable”) Market ≈ $175 billion (Calculated as follows: Total Market is all the US healthcare industry ≈ $3.5 trillion. Times the average OpEx (operating expense) for IT ≈ 5% of that, ≈ $175 billion. We will expand later to include food processors and other businesses. These are large, lucrative verticals which alone justify the effort. We will address them as soon as we complete the first pilot test. International markets will be available for all the above.
Back to the top

6. What’s your projected market penetration in year five? By the end of the fifth year (Q4, 2020) we expect to be programming the first hospital, as well as selling the system to food processors and possibly other industries.
Back to the top

7. What’s your traction to date? Please see the “Traction and Milestones” slide of our presentation. We have applied for patents, registered our trademark, incorporated; filed for private and NIH grants, and assembled a renowned team of subject matter experts.
Back to the top

8. Why will you fail? If doctors and nurses decide not to use our technology. If we fail to adapt our wearable hardware and software for all types of users (sizes, shapes, tech ability), and make it practical for them. The voice interface must be accurate and the collected data usable.
Back to the top

9. What are your biggest challenges to succeed?
Raise adequate capital in a timely fashion. Other potential challenges include: For the technology to be accurate we have to have essentially 100% utilization by all personnel; however, some medical personnel may be non-receptive to the use of assistive technology or, not feel comfortable with the electronic verification and logging – we must be able to persuade them of the importance. Smart glasses may be uncomfortable for some participants – we may instead use badge communication devices or body cams. We propose to market to the food processing industry at the same time that we develop the healthcare version of our technology.
Back to the top

10. Why will you succeed? There is strong pent-up demand for a technological solution, not only to protect patients, but also medical personnel, and hospital cost reduction. Regulators (CMS, etc.) track error statistics (readmissions) and they are severely penalizing hospitals.Ours is the first practical, automated solution to the problem of medical errors. It appears we are the first to seek a patent in this area – and the first to begin hospital trials. It is unlikely the problem could be solved in any other way. Our pilot studies are underway, so we will have validated data. Our initial focus is hospitals, but our system is also for food processing, and their operations are simpler than hospitals. The Clear Protocol team includes some of the best subject matter experts available anywhere. They are internationally recognized PhDs and MBAs who have worked for years on process and quality assurance projects, as well as assistive technology.
Back to the top

11. What are your unfair, sustainable competitive advantages? We utilize a checklist (protocol) format for all activity. Our system collects only successfully completed or appropriately cancelled protocols. Clear Protocol is utility patent pending. The innovation of Clear Protocol® is to enable a worker moving about to contemporaneously verify and log a procedure. Presently, in hospitals verification rarely happens, and logging is done after the fact – if at all. This also occurs in other critical industries such as food processing. We integrate proven off-the-shelf hardware, open-source software and some in-house programming. We expect these benefits for the hospital:

Improved reputation and possible increase in market share – using a state of the art system that can potentially eliminate medical errors.
Reduction in the average patient stay.
Reduction in the number of clinical procedures.
Capturing the estimated 1% of hospital procedures that are missed, and never billed.
Reduced cost of staff.
Improved staff morale.
Fewer computer workstations
Back to the top

12. Are you a starter or finisher? Both.
Back to the top

13.Show me how you achieve the magic ratio: Lifetime Value > Cost to Acquire & Maintain a Customer. The lifetime value of a customer (a hospital) is in the millions – all their doctors and nurses will be using our product 24 hours a day. We estimate an annual use fee in the range of $(1) per average hospital. The cost to acquire a customer will be a few thousand dollars – business overhead and salary of the sales staff. The cost to maintain is covered by the monthly maintenance fee paid by the customer. It is expected that we will have a very stable customer base. Profits derive mostly from selling software which once developed, is highly scalable. Similar SAAS, B2B companies have been profitable from the beginning.

(1) Specific numbers available upon request.
Back to the top
Back to the financial questions

14. What’s the capital raising history of the company? How much and on what terms? The founders have financed the overhead (around $30,000) with their own funds since the start. There is deferred compensation to a patent attorney and a consultant, about $7,000 each. Other deferred legal fees, about $2,000. Total, ≤ $46,000. There is no other financing or debt. The two co-founders control 75% of the stock at the moment. The remaining 25% of the stock is set aside for the advisors and future employees. The advisors have not been issued stock yet.
Back to the top
Back to the financial questions

15. When did you start raising this round? What investors have hard committed vs. soft committed? July, 2018. Not applicable. We are at the angel investor/initial seed stage.
Back to the top
Back to the financial questions

16. Have you invested any of your own money? Yes, about $30,000. See above.
Back to the top
Back to the financial questions

17. Are your advisors or board members investing? Most likely, yes. We will approach them at the very first outside capital raise.
Back to the top
Back to the financial questions

18. What’s your valuation? Terms? We want to keep the valuation reasonable to compensate angel investor(s) for participating early. We propose the valuation should be around $3,000,000 as of Q4, 2018. We are looking for one or more angels to commit to a total of $500,000 in tranches with pre-agreed milestones.
Back to the top
Back to the financial questions

19. How much cash is in the bank? About a thousand dollars. (Q4, 2018).
Back to the top
Back to the financial questions

20. What’s your monthly burn rate (expenses not covered by operating cash flow from revenues)? Under $10,000, but we (the founders) cover that.
Back to the top
Back to the financial questions

21. What’s your runway (how many months do you have before you run out of cash?) given cash in the bank and after this next round? We will not run out of cash, the founders are sustaining the company. However, we must raise capital to continue to grow. After this round, the $500,000 angel-initial seed investment will cover certain one-time costs and overhead through Q2, 2020.
Back to the top
Back to the financial questions

22. Will it get you to profitability? It will allow us to reach significant milestones and the next funding round. By Q2, 2019 we can apply for funding via an SBIR (government grant) for further development and our system will be refined to the point that we can approach certain industrial customers.
Back to the top
Back to the financial questions

23. What are your use of proceeds (how are you planning to spend the capital?) and expected results/milestones? Proceeds will go to: Costs of our pilot study (not otherwise covered by the grant), legal, accounting, patent prosecution (processing), office overhead, founders’ monthly allowance, writing the follow up (SBIR) grant application, website development. Detailed breakdown available.
Back to the top
Back to the financial questions

24. FDA clearance required or not? Not required. We can go to market as soon as we are ready. The Clear Protocol ® IT (information technology) system is NOT regulated. It is not a medical device per FDA definition. The FDA clarification letter is available for review.
Back to the top
Back to the financial questions