BRS Big Fund Raising: $27 Million + More To Come

Author: Carlton Purvis, Published on Apr 28, 2013

Last year we obtained an email BRS Labs sent to investors asking for one last drive. The company said if investors increased their positions by two or three percent, it would be able to stop raising money and “not go on the road.” But since then, IPVM has discovered government filings showing that BRS Labs has raised another $25 million this year. In this note, we examine the breakdown of the funding and what this means for the company.

UPDATE: BRS Labs disclosed another $2.2 million in funding plus plans for even more. Read the full update.  

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Comments (22)

"i cant wait for the CNBC American Greed special in a few years"

As P. T. Barnum would say, "There's a sucker born every minute!"

So that means they raised 50 millions all together. Considering that each license cost 1 500$, they need to sell 33 333 licenses + operational cost since 2005....

Well, typically if a company raises $50 million over the course of 5 - 10 years, investors would expect that company to be doing annual revenue of 2, 3 times or more revenue (i.e., $100 million in annual revenue or greater). That would mean 50,000 to 100,000 licenses each year and growing.

That is an interesting case study for any B-school!

It is a little hard to believe, but perception is the key here, not actual worth. Many of the High Value companies are selling projected ideas or what their value could be, rather than what their actual worth is.

it is a matter of selling concept instead worth. You would have to see the company analysis & reports. The Sacramento Ca. Kings are a good example. Great Team, mismanaged, worth say 150 million, not the best performance records. Owners Did the research , found a company willing to pay to move them, then the perception goes up. Thier value increases to 575 million in a 6 month period as the battle for the company continues on.

On May 25, 2010, IPVM reported that investment in BRS Labs was already in the neighborhood of $50 million. The additional $25 million makes a total of $75 million. Thus BRS Labs must claim to be building a company with $150-$200 million in annual revenue! The whole worldwide annual market for perimeter intrusion detection systems, based on all technologies, is only about $500 million. The numbers do not make sense.

You can claim what you want and perception is the same but selling the concept to someone who believes in you is the key. Not Worth but Perception. Value is one thing. Perceived Value is another or Projected Value. What will it be Worth in Say 1,3,5 years in the marketplace

I guess it would be interresting to understand how can you perceive such value, when numbers and market professionals perceives it differently.

"The whole worldwide annual market for perimeter intrusion detection systems, based on all technologies, is only about $500 million."

In fairness, BRS Labs's proposition is that their technology applies far more generally than perimeter intrusion detection. Behavorial recognition can be used in lots of areas where there is no clear barrier / perimeter and you simply want to be alerted to 'abnormal' behaviors. Ultimately, the big question is how well that works.

I am fearfully awaiting the 'American Greed episode. BRS had raised over 100 million by 2011 (twice whats mentioned here) and the new 25 million is 10 more than they informed us they needed to raise. Its sad that something can go on this long without results and unsophisticated investors are losing everything on this scam. Where is the SEC in all of this?

"Never invest in a company you can't understand." -- Warren Buffett.

I think I have a fairly advanced understanding of how analytics work, and actively use analytic products from other manufacturers. I have also looked into BRS Labs, their products, and have spoken to them at length at trade shows.

I do NOT understand BRS Labs.

I have updated the original post with a summarization of all the SEC Form D filings I could find for BRS Labs. Total I calculated was $85 million.

Btw, those interested in BRS Labs should definitely see this post referencing a Michigan lawsuit.

John, Looking at their financials, I would say this is a very successful company, Not in performance, but in raising capital, they do a great job.

Warren is a great investor as he buys stability and he still takes chances on investments .

Its not what you have, it is what you own. If you never take a chance , you can never see go beyond your limitation

The Concept is ROI and Risk, Risk Analysis. The Average person thinks in the Logic Range of numbers and and logical return. Inverstors are like gamblers who think in speculation and Returns

I have had some investors tell me that is was nothing, to loose a half million in a day and make it back the next day. I worked with an technician who make 200k in one year on investments and lived in an apartment like he had nothing to his name. Just taking a chance on other companies ( Gambling )

Being 'successful' at raising capital does not make a 'very successful company.' Indeed, raising too much capital can have a perverse effect (see Intransa as a recent example), where the company's revenue can match the levels expected / demanded by investors.

I agree, but capital with good management goes a long way. Buys a lot of time to make decision's & set up company goals & objective's. Intransa made bad decisions, bad leadership, did not make course corrections in timely manor.

on another note: I have had friends in marketplace loose millions and say to me that it was a bad investment. But they kept on investing. Remember to make a lite bulb it took 2000 mistakes before the one right process was developed. Many Engineers i have worked with over the years have told me the same thing, That it takes a lot of mistakes to achieve successful results.

"The first rule of investing: Never lose money" -- Warren Buffett.

Certainly Mr. Buffett has lost money on some of his investments, he's not being entirely literal. What he does do is avoid "high risk, high reward", pie-in-the-sky investments, and sticks with companies that have a high likelyhood of delivering value to both customers and investors. That means his portfolio is a bit more boring than most - but it's hard to argue with the results.... But I digress.

Good management goes a long way towards a great idea realizing its potential. But you have got to have a good/viable idea. The BRS sales pitch over-promises an analytic solution straight from Minority Report. While that approach has obviously been very effective at liberating investors from their cash, they are doomed to under-deliver.

I concur, no investor goes in with the expectation of loosing. Usually very optimistic of the return.

When you get to the level of investing as Mr Buffet or BRS you have a huge amount of attorneys, market analyzers, staff and other researching to make sure there on target.

Things don't just happen, and they don't just throw caution to the wind. They know the risk and returns well in advance. Good analysis, detail, reports, full staff of experts in this field.

BRS is strategizing how to control, manipulate, put themselves in a position to have the leading edge in the marketplace. Global Positioning in the marketplace.

Chris, the issue here is many of the people investing in BRS Labs are not at 'the level of investing as Mr Buffet' or even a mid tier VC or banker. A lot are small businessmen, doctors, older professionals, who have been successful in their careers and have some personal money. How many of them are capable of doing detailed analysis on the risks involved in such a complex technology?

I agree John; But they know the upfront risk to investing. I know a few of these type.

The Shame of it all is, Like the last Stock Market Fall, Many did not realize the full impact of loss until it happened. Shock, reality

When your dealing in millions, the game is not the same. Gambling at a different scale. And when you listen to the interviews with Mr Buffet, he will tell of his losses and the learning curve and disciplines of investing.

I knew a investor years ago who would spend around 1/2 million a weekend in trip money to wine, dine, play with the rich to stay on top of the game. What a different mentality. Loosing had no effect on him as it was just another adventure. He had lost millions & gained back millions. Not the same as you & I.

I think you are missing my point. Most BRS Labs investors is that most likely do not know the upfront risk of investing. These are largely NOT people who spend 1/2 million a weekend. These might be people who only have a 1/2 million in total assets.

Let's please STOP talking about Warren Buffet as he is totally irrelevant to the type of investors and investments being made into BRS Labs. All the evidence we can find points to small investments from lots of different people around the US, most of which do not have the sophistication nor resources to 'gamble' like this or do detailed reports with staffs full of experts.

I concur , I will move on.

Thanks

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