Business Rx: Mindseye Solutions

The entrepreneurs

In litigation, the involved parties are required to seek, gather, review and share all relevant documents. With the explosion of digital technology in the past decade, the discovery process has become enormously costly and risky. Teams of attorneys for litigants have to sift through electronic documents, e-mails, records and everything stored not just on computers, but now on tablets and smartphones, too. They could spend weeks reviewing documents — more than 95 percent of which likely prove irrelevant.

Bob Krantz has a simpler way. He, Elliot Nierman and David Shedd founded Mindseye Solutions in 2008 and developed TunnelVision, a software, hardware and storage application that helps lawyers find, understand and classify key information faster while reviewing far fewer documents.

“We each put in $1,000, set out to solve a problem and didn’t look back,” Krantz said. Arlington-based Mindseye has since grown to more than 34 clients.

The pitch

Krantz

“Mindseye’s TunnelVision platform makes it easy for companies to investigate electronic documents using various methodologies to find and classify relevant information. We help organizations manage risk, minimize legal exposure and save time and money.”

Jeff Fehrman, chief strategy officer

“To put the costs in perspective, look at something such as e-mail. The average employee sends and receives around 110 e-mails each day — most of which have no business purpose. A case involving e-mail for 10 employees covering a single year could include as many as 210,000 documents for attorneys to review; even at $1 per document to review, a company is spending $168,000 reviewing documents that have no impact on the lawsuit and no business purpose.

“Mindseye and the TunnelVision solution eliminate that waste, providing an intelligent repository that allows companies to use e-discovery to treat the larger problem of information governance. Clients also use it for internal corporate and HR-related issues.”

Krantz

“TunnelVision is used by legal counsel in Fortune 1000 companies, global law firms, global consulting firms, government agencies and legal service providers. We are a profitable business and we have bootstrapped the business to this point, growing through revenue with no outside investment.

“We recognize that we are at an acceleration point within the business and need to ramp up. We have been meeting with potential investors recently and have found the process to be very resource intensive.

“How do you recommend balancing the time and effort required to run and grow a business with raising investment capital to accelerate growth? There are only so many hours in the day and we still need to stay focused on sales and servicing our current customers.”

The advice

Jason Shrensky, entrepreneur-in-residence, Dingman Center for Entrepreneurship

“You hit the nail on the head. Finding investors, pitching investors, following up with investors, following up again with investors, negotiating terms and ultimately collecting checks is significantly more exhausting and distracting than most people realize.

“Mindseye Solutions has two advantages that should allow this process to be less painful. First, you can tell a story that potential investors love to hear, i.e., ‘The product is built, we have significant customer traction, we just need funds to blow the business out and make it huge.’ That type of story is very digestible for potential investors and smells less risky than other deals they see. Instead of there being many questions about ability to deliver the product and whether the product will be accepted by customers, your investor discussions should be tightly packed around your sales cycles, sales plan and how you will execute that plan. If you can answer those questions well, you will have a much easier time fundraising than other companies out there.

“The only problem that I foresee is that it will not be easy for many potential investors to understand why TunnelVision solves the e-discovery pain point. If anything, the average investor may know that e-discovery is a fairly mature industry with many established players. It’s not obvious as to where TunnelVision fits in. You need a very straightforward way to explain why TunnelVision is unique, and even with that, it may be a story that doesn’t easily resonate with potential investors. But it is here where your company has a second advantage. Attorneys will understand the story quickly, and many attorneys have money to invest. While traditional angel investing groups aren’t populated with many attorneys, you should be able to make connections easily.”

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