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
Comments
Great post Liz, Dave has the right approach I love that he started with humility. One missing element from the list. (though I am sure it wasn't missing from Dave's actions) is the idea of keeping in mind the WIIFM concept.
What's
In
It
For
Me (meaning the investor)
Keeping in mind the needs of the investor is critical to securing what you want, investment, attention, marketing partnership or whatever else.
In addition to WIIFM I always ask, "if you can't help me today can you recommend someone who can?" This little sentence gives you 2 advantages. 1) People generally won't refer you to anyone else if they have ANY way of helping. 2) If they do recommend you to someone else you will come to the 2nd person with the "recommendation" of the first "Bob suggested that I give you a call." Holds a lot more clout than just cold calling.
Peace
Joseph Flahiff
www.startup-your-startup.com
Posted by: Joseph Flahiff | October 11, 2009 1:40 PM
I think that it is great that you are sharing with people how to raise money for their tech startup. I just wanted to share and help spread the word about an iPhone app. The press release follows.
Show Off! Get Ready, Here it Comes!
October 11, 2009 – ChapBros Media
info@chapbros.com http://www.chapbros.com
ChapBros Media is pleased to announce, SHOW OFF, the worldwide talent competition EXCLUSIVELY on Apple’s iPhone and iPod Touch.
ChapBros Media is the brainchild of Duane Lee Chapman, Wesley D. Chapman and Leland B. Chapman, the sons of world famous DOG The Bounty Hunter. ChapBros Media has just received the thumbs up from Apple Inc. and is excited for the launch of SHOW OFF in the app store this upcoming week!
SHOW OFF gives users the ability to submit videos of their talents and vote via the iPhone or iPod Touch for their favorite video submissions. Weekly prizes will be given for the overall winners and every 14 weeks one Ultimate SHOW OFF will be crowned!
As SHOW OFF develops so will the prizes! Due to Apple’s restrictions, ChapBros Media is unable to give away cash prizes. But the Chapman brothers have a few ideas up their sleeves! Prizes will consist of t-shirts, bags, hats, guitar straps, drum sticks, flip video cameras, mugs and more.
ChapBros Media has taken their business plan to the social community in a very effective and aggressive way. By utilizing MySpace, Facebook and Twitter the Chapman brothers have not only created hype, but have turned their fans into active marketing agents. Teams have been created and given critical duties to help grow the SHOW OFF project and the ChapBros Media brand. Teams are assigned missions and each team is rewarded for the completion of these missions.
Not only does this bring the fans closer to the project and the Chapman brothers, it also fuels viral and social marketing. In just days the ChapBros Twitter, MySpace and Facebook accounts have gathered thousands of fans and are growing every day.
ChapBros Media will be releasing other iPhone apps in the coming weeks and will continue to release apps through out 2009 and 2010.
For more information on ChapBros and SHOW OFF, please visit www.chapbros.com or check out the ChapBros Media Facebook page at http://www.facebook.com/pages/ChapBros/125664418441
THANK YOU ,
CHAPBROS
Posted by: ashley golden | October 11, 2009 10:11 PM
Nice article its a big help....thanks for posting
http://www.craigspr.org
Posted by: craigspr | October 25, 2009 10:06 PM