Raising Money for Technological Startups

Raising Money for Technology Start-ups

David Baker

Executive Director

University Technology Park at IIT

Perm, Russia, May 6, 2014

Incubators: Working with Start-ups

•Establishing annual milestones

•Support for business plan development, marketing, pitches to potential funders

•Identifying funding sources

–Angels

–VCs

–Government

Advanced Cooling Therapies

UTP Success Story

•Product: medical device for rapid body cooling for stroke and heart attack victims

Early Funding

•Friends and family—personal funds

•iBIO Index pitch winner--$10,000

•Support from University Technology Park to:

–Identify and schedule presentations to funders

–Introductions to state government

Product Credibility

•Successful animal trials

•Prototype development and systems development for hospitals

•Simple and credible solution to a real problem

•Led to $1 million round of funding from Angel Groups in Chicago

Marketing Strategy

•Establishment of connections in major EU health clusters—International marketing director

–Identification of leading emergency room doctors

–Support from University Technology Park through connections with European tech parks

•Funding enabled production of product, expansion of staff to meet expected demand

Next Challenges

•Obtain USA FDA 510k regulatory approval

•Use EU experience to gain credibility

•Design go-to-market strategy for manufacturing of product, and selection of required chillers

•Preparation for exit

Other Success Stories

•Cleversafe—secure archiving of the world’s data

–Financed with VC rounds

•Chromatin—mini-chromasomes for tracking rapid hybridization of cereal crops

–Financed with VC rounds

•Therapeutic Proteins—First to market in the US with Bio-similar pharmaceuticals

–Financed by UTP developer and private investors

Main mistakes of Start-Ups

•Technology first instead of customer needs

•Too many markets at once

•Under-estimating regulatory delays

•Disappointing investors with too ambitious claims

•Intellectual property issues

•Under-estimating cost of manufacturing

•No idea of distribution requirements, costs

•Competition

Investment Chart: stages and appropriate investors

Crowdfunding

Lawyer

University

FFF

Credit

Cards

Self

Volunteers

Accelerato

r

Grants

Angels

Customer

Philanthropy

Entrep Org

VC

Funds

Strategic

Partner

Angel

Orgs

SBA

Mortgage

Idea

Seed

Early