Transitioning from a research-based business to a product-based business is not a simple task. A successful shift of your company’s focus, strategy, and operations requires not only the right market opportunity and conditions, but also the right product, partners, and runway. In this profile, we break down how NC-based AxNano is making the R&D-to-Product move, growing its business, and helping our world.
AxNano had long been recognized for its R&D pedigree in the environmental contamination space when Doug Speight joined the company as CEO in 2021. Its PhD and scientist-heavy team performed outstanding work, boasted a nearly 80% win rate for federal agency proposals, and generated more than $8.5 million in research funds. When Doug and his team surveyed the market landscape and explored scenarios for growth, their assessment resulted in a decision to focus exclusively on water quality and the acute issue of addressing waste from widely used, long lasting chemicals known as PFAS. They also identified an opportunity to grow by going beyond their research roots in providing mobile hardware platforms that capture, concentrate, and destroy PFAs and other complex wastes.
An early action in the transition was to find the right product partners. AxNano licensed Army Corps of Engineers intellectual property that includes mobile response units designed to capture PFAs, and partnered with defense firm General Atomics to leverage their highly effective technologies for destroying PFAs and a broad range of other chemicals. With several military client contracts secured, Doug and team then set their sights on commercial expansion. Key in realizing that aim was adding finance acumen and expertise to help prepare for and pursue growth in that sector.
Doug was introduced to virtual CFO & HR services firm vcfo at an event with the military. Subsequent conversations about AxNano’s stage of development and aspirations for selling their platforms globally produced a strategic plan for getting the business to where Doug and his team want it to be. To carry out the work, vcfo assigned team member Lee Ann Perry-James and her 25+ years of finance, strategy, logistics, and M&A experience in the chemical sector to serve as AxNano’s fractional CFO. Among the objectives identified for AxNano’s engagement with vcfo were to:
With help from vcfo, AxNano is making great strides in achieving these objectives. They are now actively preparing for Series A fundraising, improving capital management processes and policies, and building a foundation for market expansion. This includes the currently active reorganization of AxNano’s corporate structure from an LLC (which tends to lack key processes, structures, and tax incentives for investors) to a C Corp (which offers investors extra protection and tax incentives). It also includes merging the organization’s current three-company corporate structure into a single entity to gain capital efficiency and increase investor appeal.
The foundation AxNano is building will also help to inform key decisions the organization will face in the near future related to areas such as manufacturing and operating models. One such question on the manufacturing side will be “what is the right combination and profile of characteristics with respect to third party vendors, facilities, and ancillary services?” Operationally, “what tasks, functions, and responsibilities are going to be handled by AxNano employees and what should be done via third party partnerships?” Important questions regarding product distribution are also in queue.
Doug and his team are excited about AxNano’s future - and with good reason. Their General Atomics partnership is providing structural elements AxNano won’t have to duplicate (e.g., engineering support, operational expertise and transactional support) and is opening doors for commercial expansion. The company will soon be showcasing its strength in a Department of Defense funded head-to-head comparison test of the top five PFA destruction techniques available that will significantly raise visibility of its offerings. Preparations for establishing a new plant (destruction unit) in Charlotte, NC that will serve East Coast clients and bookend the company’s existing San Diego unit are also underway. At the same time, AxNano continues to benefit from the expertise and experience vcfo and their fractional CFO bring to the table.
When asked what makes Doug and the AxNano team excellent partners, Lee Ann cited that “Doug and his team allow us to do what needs to be done so we can make the company stronger and catapult faster.” When asked about his partnership with vcfo and the fractional CFO work Lee Ann performs, Doug noted that “Three words come to mind with Lee Ann – trust, confidence, and empowerment. We know that Lee Ann is making us stronger from a financial and foundational perspective and that allows me and my team to focus on the future of business.”
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