‘You gotta go all in’

A company starts with an idea. To grow, it needs capital.

For startups seeking to fuel fast growth through investment, the process of financing a company abounds with organizations and acronyms. But behind it all is something more fundamental: interactions and relationships between people.
That much was clear during a series of talks and discussions with investors and founders on Tuesday during Start. Fund. Grow. The event, produced by Technical.ly, was held at Price Modern as part of Baltimore Innovation Week 2017.

100 of us learning about growing a tech company in Baltimore at Start. Fund. Grow. #BIW17 pic.twitter.com/X4sNdDydKH

— Technical.ly Baltimore (@TechnicallyBMR) October 3, 2017

One big consideration is timing. TEDCO Senior Vice President Steven Auvil presented the funding process as part of a company’s course over time, with milestones built in along the way. While it can be tempting to go after money right away, startups often chart a more plan to raise at “value inflection points,” such as following the launch of a Minimum Viable Product. Coming from a point of focus and strength can also help a position with investors, Auvil said.

"Don't raise outside investment when you need it": @AuvilStephen @MDTEDCO reminds that desperation is bad for negotiation #BIW17 pic.twitter.com/ZJ1iVyTzlp

— Technical.ly Baltimore (@TechnicallyBMR) October 3, 2017

Knowing how the money will be used is another key consideration. Working as an analyst with the Maryland Venture Fund, Moss Amer said it’s something he sees life sciences leaders understand. “Startups are raising money as tool to get to customers and impact,” he said during a panel that included a quartet of investors.
Identifying the market you are trying to reach, and doing homework to find the “right-size capital” for an organization is also an important consideration, said Julia Spicer, executive director of the Mid-Atlantic Venture Association.

Investment Tips #BIW17
-Know Your Market (Better than a Google search)
-Confidence and Humility
-Know Your Goal
-Coachable, not Compliant pic.twitter.com/7sc0EARIZp

— Technical.ly Baltimore (@TechnicallyBMR) October 3, 2017

One reality of the process is that investors hear from lots of founders, and they see many plans. It’s important to remember investors are evaluating the founder and the team who will be executing on that idea along with the plan. Gira Wieczorek emphasized the importance of being authentic, rather than overconfident, during the process.   Standing out during that process is in part a matter of building relationships. And after all, the plan could change. David Wise, who recently began leading the Maryland Momentum Fund after serving with Abell Foundation, added that it’s important to show that a founder will be able to adjust the plan as it progresses.
The investor panelists also talked about the realities of hearing “no” from investors. Amer said it’s important to keep in mind that there’s a difference between “no for now” and “no ever.”

Failure is easy: if you can explain what you learned from it, then use it: Julia Spicer @MAVACapCon #BIW17

— Technical.ly Baltimore (@TechnicallyBMR) October 3, 2017

For entrepreneurs, it’s all about adjusting. Juxtopia CEO Jayfus Doswell talked about getting turned down by TEDCO the first time he pitched. But he adjusted the plan and later received funding.
“Entrepreneurship is about grit,” he said.

Entrepreneurship is about grit: @JayfusD took 10 yrs for NIH grant, rejected by @MDTEDCO at first but got better and later closed #BIW17 pic.twitter.com/4vleZQuGzc

— Technical.ly Baltimore (@TechnicallyBMR) October 3, 2017

And there are resources in Baltimore that can help prior to an investment. John Davis, founder of regtech startup Notice and Comment, said basing his company at the ETC helped prepare to go and seek TEDCO funding. For Davis, embracing that community provided the support and feedback he needed that eventually set him up to receive funding. It wasn’t half-hearted, and that benefits the entrepreneurs as well as the investors.
“For what you’re giving up, you gotta go all in,” Davis said.