How to raise money for your tech startup
Dave Troy here with Kris Appel, our guest blogger for today. Kris is the founder of Encore Path, a medical technology start-up in Baltimore.
As a first-time entrepreneur, raising the money to launch launch a medical device was a significant undertaking.
I am not only a first-time entrepreneur, but I chose to start a company in an unfamiliar field. I have a background in linguistics, but my company develops medical technology for stroke rehabilitation.
So I started this endeavor with two strikes against me. This month, I will close my Series A round, and my first product was launched this summer, a rehabilitation device that improves arm function in survivors of stroke and other brain injury. Here is how I was able to attract investment:
• Humility -- Everyone knows something I don’t. Why wouldn't I want to learn from them? I am thankful that people care enough about me to offer their advice and give me their time. I'm sure they have other things to do, but they've chosen to spend this part of their day with me, and I'm going to listen to what they have to say.
• Be nice to everyone, all the time -- I’ve met people everywhere who might turn out to be investors or important advisors. You never know when someone is going to help you, it could be weeks or even YEARS away, but you want them to remember you fondly, and to want to help you succeed.
• Meet with everyone who asks -- Especially early on, I met with everyone who requested a meeting with me. And I didn’t mind asking each person for something -- a referral, a market report, scientific data I couldn’t afford to buy, business advice. Some of those casual meetings turned into major investments later.
• Enter business plan competitions -- I entered, and won, a few business plan competitions. In addition to winning cash for my business, I made a lot of contacts, got some very positive press, and got a TON of free advice about my business plan.
• Let people get to know you -- All of my investors were strangers to me when I started this company. But I sought them out in the beginning as advisors, and spent time with them over months and years, talking about progress I’ve made and where I’m headed. It helped to build trust and credibility, and they eventually invested.
• Be patient -- Every single aspect of this business has taken a lot longer than I thought it would. But so far everything has happened exactly as expected, just at a different time.
• Surround yourself with supportive people -- This is the hardest thing I’ve ever tried to do. I needed all the courage I could muster, and support from friends and family. I dropped friends who couldn’t support me, and found new ones who understood. It made a difference.
• Keep your business plan current -- This seems obvious but it’s harder than you think. Almost every month STILL I take time to update my business plan. You never know when you’ll need to email it to someone, or enter it into a business plan competition, or use parts of it for a grant or loan application.
This is an archived version of the technology blog. For updated coverage, see the current baltTech location: baltimoresun.com/balttech