3
Entrepreneurship and New Venture Creation
Revolights: Using Multiple Sources of Funding
to Bring Its Innovative Bicycle Lighting System to Life
Introduction
– October 2010, Kent Frankovich was riding his bike home from work at night. The area in front of him
was partially illuminated by his handle-mounted bike light. He hit a pothole that nearly threw him off
his bike. It got him thinking that there must be a better way to illuminate the path in front of his bike.
– He decided against buying a better handle-mounted light and decided to do some research. He looked
at the lights on cars and the design work that went into them.
– Frankovich came up with a solution. He distributed small LED lights all the way around the wheel and
timed them so they’d only illuminate when facing forward. Thus, only about a third of the wheel
would be illuminated at any given time—the third lighting the path in front of the bike. The whole
wheel couldn’t be illuminated because the spinning light would interfere with the rider’s eyesight.
– Frankovich built a prototype and started riding at night. He found that the arch of light not only lit the
path in front of him, but made him hugely visible from all sides.
– Frankovich found some interesting statistics about bikes. About one third of Americans own bikes, but
only 1 percent of trips are made by bike. The top four reasons that people don’t ride their bikes more
often are (1) car traffic, (2) weather, (3) lack of bike lanes, and (4) darkness. The thing these four
reasons have in common is personal safety.
– Frankovich realized that not only a better bike light, but it could help people feel safer riding their bike
because they would be more visible. About 70 percent of bike traffic accidents are attributed to a lack
of side visibility. The majority of bike accidents happen between 4:00 pm and 4:00 am—which is late
afternoon to dusk to darkness.
– Frankovich improved on the initial prototype. To provide for more side visibility at night, he decided
both mount lights on the front tire and on the back tire as well. The design was for white lights on the
front tire and red lights on the back. The result was 360 degrees of illumination, offering not only
improved lighting (for the person riding the bike) but improved visibility from all sides.
Next Steps
– Frankovich met Adam Pettler at a friend’s get-together and share about his idea, and pulled out his
phone and played a video of the prototype.
– Frankovich and Pettler start a business together, ettler had to write a business plan for a class and
was looking for an idea.
– Over the next several months, Frankovich and Pettler produced several iterations of the original
idea. They formed a company named Revolights. The Revolights bike lighting system consisted of
two narrow rings of LED lights on each bike wheel using a series of rim-specific clips.
– They started showing videos of their most recent prototype to bike shop owners. The response was
very positive.
– To test the waters in a substantive fashion, they decided to launch a Kickstarter campaign. The
campaign launched in mid-2011 with a $43,500 goal.
– The money would be spent on the final design and development work for the Revolights system and
on the first production run. At this juncture, put the case aside for a moment and go to
Kickstarter.com. Type “Revolights” into the search bar, and select the Revolights campaign that was
funded on September 27, 2011 (Revolights ran two subsequent Kickstarter campaigns). Watch the 2-
minute, 50-second video pitch. You’ll see Revolights’s original pitch. The video also provides a nice
demonstration of the Revolights’ system. The Kickstarter campaign raised $215,621 from 1,442
backers (496 percent of the original goal). That success provided Frankovich and Pettler the
confidence to proceed with Revolights and make it an all-out effort.
4
Entrepreneurship and New Venture Creation
Funding Journey
– The Revolights system is a physical product, inventory must be bought and paid for before the
product is sold. As a result, scaling the company has required Frankovich and Pettler to raise money.
– The first funding was the initial Kickstarter campaign. Buoyed by a positive response, Frankovich and
Pettler decided to expand the production run and took out a $250,000 SBA loan.
– In early 2013, they ran a second Kickstarter campaign. The $14,500 goal was easily met—they raised
$94,793 from 233 backers.
– The differences in the videos that accompanied the 2011 and 2013 Kickstarter campaigns showed
how much the company had matured.
– The purpose of the 2013 campaign was to fund the company’s second-generation product,
Revolights City. Revolights City fit more bike rims and would make Revolights more widely
accessible. The company also announced a partnership with Mission Bike Company, which would
start selling a family of bikes with Revolights lights built in.
– The next round of funding was a bold one. Frankovich decided to take his chances on Shark Tank.
The advantages of appearing on Shark Tank are threefold:
