Company Overview
History
ABC Internet Marketplace, Inc., headquartered in Burlington, Vermont, is seeking financing of $16 million over the next two years to expand its existing operations.
Founded by Fred McKenzie, Patrick Ogilvey, and Kishore Manji in March 1996 as a Vermont "C" corporation, ABC Marketplace is primarily in the business of operating a financial market and trading platform for the manufacturing sector. The company's founders recognized that technology was key to bringing their idea to fruition and that a technology partner was needed to develop the product. In August 1998, ABC selected Mindware Pertech, Inc. as its technology partner. Mindware Pertech, Inc. in turn purchased 28 percent of ABC Marketplace stock and joined the board of directors.
In January 1999, the board of ABC Marketplace felt the need to add additional business talent in order to move the project from developmental stage to full implementation. To achieve this, ABC invited Kishore Manji to join the company's board of directors.
The ownership of ABC Marketplace, Inc. is structured as follows.
Stock Ownership
| Owner | % of stock |
| Fred McKenzie | 41.00% |
| Mindware Pertech, Inc | 21.00% |
| Kishore Manji | 20.00% |
| Robert Kline | 13.00% |
| Others | 5.00% |
Business Problems
Almost all manufacturers are exposed to losses in three areas:
- Increased cost of in-process materials (IPMs), that is, raw materials
- Inventory write-downs due to obsolescence or price changes
- Production losses due to the short supply, or lack of supply, of IPMs
ABC Marketplace provides a unique vehicle to insulate manufacturers from these uncertainties by providing a mechanism by which true prices and materials availability are disseminated now and in the future.
Our sophisticated Web-based platform with proprietary tools allows manufacturers to manage risks caused by changes in underlying product prices, trade tariffs, interest rates, and currency exchange rates.
ABC Marketplace derives its earnings from trade commission, currency translation, sale of data, and subscription to the technology index created by the exchange.
Risk Management Defined
Risk, an element of uncertainty, is a relatively broad term in manufacturing. Its significance has recently become known mainly because of uncertainties resulting from international trading activities. Manufacturers are aware of the risk involved in building up inventory; they know that should the market go soft, an untimely liquidation can be very costly. Those who build "on order" assume a similar risk; a sudden increase in the price of raw materials reduces profits.
Risk management has become a fundamental tool to minimize these financial losses. Although the need for such a tool has long been known, the technology for implementation has never before existed. Now that the Internet has made it possible for the creation of such a platform, ABC Marketplace has developed a unique system that will combine all the necessary building blocks for such a financial market and trading platform.
Key Goals and Objectives
Rapid advance in technology and the break up of trade barriers have created a true global economy, which in turn has created uncertainties in the pricing structure of manufactured products. Such uncertainties result from underlying changes in product prices, trade tariffs, interest rates, and currency fluctuation—all of them leading to volatile markets around the globe.
These uncertainties are most visible in the global electronics market. ABC Marketplace will initially target the semiconductor sector in the global electronics market, starting with integrated chip (IC) makers and their users. The semiconductor sector alone generates $150 billion among some 10,000 manufacturers worldwide.
In addition to the electronics market, ABC Marketplace will soon target other manufacturing sectors such as chemicals and pharmaceuticals. Eventually, we will expand to still other sectors—for example, telecommunication and construction.
