On Raising Money For Your Invention

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There exists a wealth of advice spread across the internet on how best to attract investors though it often lacks real life examples. What I want to do is give you an account of how we did it for Stowwi, our folding food storage container, and give you an insight into the decision making process behind each significant stage.

This post will focus on a bird’s eye view of our fund raising experience, leaving the detail behind its many subjects for future posts and/or Q&As in the comment section.

November 2015

After creating basic prototypes and shooting a video we launched an ambitious crowdfunding campaign on IndieGoGo that would, we hoped, raise the funds needed to get us to market. We also launched social media accounts and, through various (often mischievous) ways pulled together 4,000 followers.



Only, it didn’t work. Not by a long shot…



However, what it did do was raise our profile, give us a good excuse to contact strangers, and generate attention from some very interesting eyeballs, namely purchasing teams, investors, and licensing companies. Within a couple of weeks and after several dozen conversations we had some rather interesting and very exiting avenues to explore:

COA 1: License the idea. (Shout out to Warren Tuttle, a gentlemen and product legend)
COA 2: Raise a round of funding.

You may be wondering why we didn’t pursue these rather obvious routes earlier. The reality was that we had nothing to sell beyond a recently filed and patent application and prototype that didn’t really work. What this campaign gave us was a plethora of clear demand signals and this, this has real value.

December 2015

Much of the weeks following our IndieGoGo campaign were dedicated to updating our business plan which we carefully crafted to now include and leverage the positive signals we had and were still receiving.
*Top Tip: If you can get a positive quote from a respected industry executive, put it in your business plan to evidence your confidence!

We then set out on the campaign trail, contacting all those who had shown interest before and all those who might bite given their current portfolio. Google was our best friend here, as were the many hundreds of business podcasts (and episodes of Sharktank/Dragons Den) I had digested over the months.

Top Resource: Shout out to Jason Calcanis of This Week In Startups – I cannot recommend his show and advice enough.

I also found that having a website complete with demo video was particularly useful and something more often than not I could get the person on the other end of the phone to open up after completing my brief pitch.

January – February 2016

By February the following became quite apparent:

a. Product licensing was not going to happen as, despite the “millions” ‘they’ expected to sell, the product was far from complete and thus presented far too much risk;

b. Selling an equity stake in our business at this early stage could easily cost us at least half of the company if we weren’t careful;

c. A Revenue Participation Agreement, whilst a long shot, was potentially on the table;

d. Creating genuine FOMA (“Fear of Missing Out”) is the cornerstone of any good pitch.

e. There are a surprisingly large number of investors out there waiting for your call and keen to invest in promising startups. Finding money is your problem, quality deal flow is theirs.

March – June 2016

By March we had agreed headline terms with our chosen investor and we could not have been more excited to welcome them aboard as our new partners.

Whilst I can’t go into the details of the deal publicly I can say this: The signing of a final agreement took some 4 months and very nearly fell apart on several occasions. This period of waiting was, frankly, excruciating and very unfortunate.

We learnt some very important lessons here, most important of all being to keep your options open until the deal is done and that some things cannot be rushed, not matter who/how much you harass! In truth I’m not too sure how much an entrepreneur can really guard against this though we’ll be looking to agree strict timelines when the time comes to raise our next round of funding and will let you know how it goes.

So, what’s next?
Finishing the product’s redesign, new prototypes, re-branding, re-launching a crowdfunding campaign on Kickstarter,and bringing our product to a store near you. Best we get on…

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