Interview with Sandy Lawrence, Past CEO, Therative, Inc.
Situation: The technology sector is growing following a couple of lean years. Whether you want to fund a new company, or a new effort within a smaller company, what are the best avenues to capital? How has the game changed?
- Funding and credit markets are opening but still tight. The bar has been raised because too many people are chasing too few available dollars.
- The venture capital sector has consolidated. Over 80% of current focus is on technology, software and medical. Under 20% goes to the consumer sector.
- It is important to target VCs who specialize in your technology, market and business model.
- Research current VC portfolios.
- Angels now act more like VCs – particularly structured angel groups.
- Initial investments are typically under $1 million.
- If you have a technology, investigate the grant world – e.g., NIH or DARPA. These organizations fund research, but not marketing, etc.
- Look for specific programs or RFPs that align with your technology.
- Target your grant request toward prototype development and studies.
- Search LinkedIn for military people who can introduce you to contacts within programs like DARPA.
- Investigate SBA Grants, and foundations with an interest in your technology or application.
- Foundations sometimes will grant funds ($100k) to support the work of individual scientists and researchers.
- Call on friends and family who believe in you and your work.
- Whoever you approach, these rules apply:
- Do your homework. Choose sources that align with your project and profile.
- Presentations must be crisp and easily understood. Investing in professional assistance is wise.
- Be able to make your case in 15 minutes or less. The first minutes are most crucial, so have your ‘elevator’ pitch perfected.
- Your model and financials must support a high multiple exit, 5-10x their investment in a reasonable period of time (~5 years).
- Team, Team, Team – credentials, experience, presentation – be a team with whom the investor can work.
You can contact Sandy Lawrence at email@example.com
Key Words: Fund Raising, Credit, Capital, Venture Capital, Angel, SBA, Foundations, Military, Presentation