How to Increase Your Odds of Getting High Tech Startup Funding 

Many high tech startup entrepreneurs ask where to find capital and how to have a successful fundraising campaign. The following pointers may increase your chances.

Reach out to Your SmartZone and the Michigan SBDC

For early stage, high technology startup companies, the first suggestion is to reach out to your SmartZone. The Michigan Economic Development Corporation (MEDC) has 21 SmartZones throughout the state of Michigan and has an interactive map showing the geographical locations of each on its website. 

SmartZones offer a wealth of knowledge about local and statewide resources and are a perfect entry point—but an equally significant resource is the Michigan Small Business Development Center (Michigan SBDC). The Michigan SBDC is hosted by Grand Valley State University and offers technology consultants throughout the state.

It Takes More Than a Great Idea

High tech entrepreneurs hope that because they have a great idea, that financial resources will easily fund their concept. Nothing is further from the truth, as there are no guarantees that a project will be funded.

There are, however, strategies that can enhance your odds of success. A key element is to put yourself in the position of the person who will potentially invest in your project. That person wants to see a successful return on investment with the lowest potential risk. They want to understand if the market will be receptive to the new product or service and what the market is willing to pay for that product or that service.

The Importance of Customer Discovery & A Good Marketing Plan

It is therefore non-negotiable to have completed a very extensive and in-depth customer minimum) discovery to learn if they are interested or not in what you think is a great idea. 

The next step is to create a good marketing plan. This will provide the potential investor with your concept on how you will commercialize your idea and how much money you think that it will make. 

Your projections will be optimistic, as of course you believe in your concept. Historical data shows, however, that it usually takes twice as long and double the amount of money expected to achieve commercialization than the projections made by the entrepreneur.

Preparing Your Pitch

SmartZone and Michigan SBDC Tech Team consultants are great resources to help you in preparing the documents and to prepare you to present to potential investors.

Investors have the luxury to be exposed to many projects and to choose the one project that will benefit them the most. Therefore, a well prepared analysis and documents are the only tools that can place your project in a stronger light compared to competitive offerings.

It’s a Journey

Don’t be discouraged or disappointed that the journey for an early-stage technology company to find money is not an easy one. The state of Michigan has created funding programs which can be entrepreneur-friendly, but there are no guarantees that your project will be funded. Examples include the Business Accelerator Fund (BAF), which is managed by the SmartZones, and five pre-seed funds managed by independent third-party organizations.

The journey might be difficult and demanding, but the tech small business ecosystem is here to support—all state-funded programs are no-cost. 

And remember, be coachable and listen to the advice you receive. The ecosystem’s only goal is to help you be successful!