TCF.. CIF.. WTF(unding) ? How to prepare a winning application TCF/CIF
Transcript of TCF.. CIF.. WTF(unding) ? How to prepare a winning application TCF/CIF
Technology Commercialization Fund
Purpose:
Fund product development to position a company for follow-on investment
Who:
Early-stage companies in MD meeting eligibility requirements
What:
$100K Investment – 4 tranches Additional $125K follow-on possible
When:
1st of every month
Program Contact:
Henry Ahn [email protected]
Cybersecurity Investment Fund
Purpose:
Fund product development to position a cybersecurity company for follow-on investment
Who:
“Cybersecurity” companies in MD
What:
$100K Investment – 4 tranches Additional $125K follow-on possible
When:
15th of every month
Program Contact:
Ron Kaese [email protected]
Eligibility Requirements
Companies with less than 16 FTE’s
At least 50%
working in Maryland
AND
Pre-revenue, OR
<$500K qualified investment
Review Timeline
TCF
CIF
Month 1 Month 2
1st
15th
Application Due Date
Compliance Review + Site Visit
Compliance Review + Site Visit
Preliminary Review: 2nd Wed of the month
Preliminary Review: 1st Monday of the month
Pitch to Committee: 3rd Wed of the month
Pitch to Committee: 1st Wed of the month
8% Convertible Note
5 Year term
Conversion triggers:
• $500K Qualified Investment
• Acquisition
No discount
No cap
Investment Terms
Where do I get more information?
Request for Application
Funding Document
Application Link
Program Manager
Checklist
Project Example #1
Timing Pmt Description
Up front payment, Months 1-2
$25,000 None
Milestone 1, Month 3 Set up purchaser aspects
of platform
$25,000 Scale underlying infrastructure • Versioning • Code optimization
Milestone 2, Months 4-5 Set up purchaser aspects
of platform
$25,000 Set up purchaser aspects • Tagging • Exporting data
Milestone 3, Months 6-7 Set up platform to enable
viral growth in usage.
$25,000 Set up supplier aspects • Forwarding materials • Sharing materials
Project Example #2
Timing Pmt Description
Up front payment $25,000 None
Milestone 1 $25,000 • Implement gamification elements • Implement scoring algorithm • Provide teacher w/ IEP support
Milestone 2 $25,000 • Implement peer sharing • Implement multiple assignments • Implement auto-complete
Milestone 3 $25,000 • Pilot speaking & listening practice & assessment tools
• Enable audio/video upload
Basic Rules…
1. Yes, you do need to prepare financial projections!
2. It's not accounting, it’s business.
3. Projections will never be correct…but they have to
make sense.
• Investors will discount your projections.
• They have to be “big enough” to matter.
• They are a reflection of your assumptions about
the business, dressed up to look like a P&L.
4. End goal is to be discussing your assumptions,
not the actual numbers.
And just one more thing…
“I only need 0.01% of this really big market to make
money!!”
The Macro (Top Down) approach is not acceptable
because no one can assess whether your plan is
reasonable and whether you can execute.
Investors want to see a Micro (Bottom Up)
approach that starts with the customer and is
grounded in market research.
A Suggestion…
Link your Market Segmentation Strategy to your Market
Research & Financials.
1. Use market research to add credibility to assumptions.
2. Use segment strategy & assumptions about contract
value & structure to build annual revenue projections.
3. Use estimate of COGS to calculate gross margin % and
operating profit.
4. Use segment strategy & assumptions about sales
channels & other overhead expenses to build annual
SG&A budget.
5. Calculate EBIT and determine investment needs.
Financial Projections Template
Financials are not separate from the business plan. They are a different way of
representing that plan.
Watch out for…
1. Constant %GM
2. %GM too low.
3. Constant %SG&A.
4. Multiples of prior years.
5. Confusing cash with accounting – It’s all about
burn rate and investment needs, not
depreciation, amortization, and revenue
recognition rules.
Now that you’re all done…
Calculate your % share of the total market.
That % should be reasonably attainable, allowing
for plenty of downside risk and upside opportunity.
In other words “not too large and not too
small…just right!”.
And, if you didn’t notice, what was just outlined
here is about 2/3 of a 10 slide investor pitch deck!
What is TEDCO Looking For?
Innovative/disruptive, seed stage, technology-enabled solution in a large, growing market.
Biologic/diagnostic
Medical device
Health IT / Tele-health
Enterprise software
Web application
Engineered product
You get the picture…but, not simply a “me too” play.
TEDCO TOP 10 LIST
#1…
Follow the instructions in the Request for Application (RFA).
It sounds simple, but you’d be surprised!
And, remember, the “customer” is always right.
#2…
Refine your proposal with the help of outside advisors.
Because you’re competing with all funded plans.
TEDCO TOP 10 LIST
#3…
Show us some data.
Life Sciences – in vitro studies
Engineered products – prototype & lab testing
Software – MVP & some user feedback
There may be more stage-appropriate funding options.
TEDCO TOP 10 LIST
#4…
Show us a team.
We understand “stage-appropriate”.
Blend business with technical.
Use no/low cost external resources to fill holes.
What new hires are needed and when?
Marketing & sales is a commonly overlooked skill set
TEDCO TOP 10 LIST
#5…
Show us a company, not just a technology.
Revenue model
Go-to-market plan
Channel strategy
Target segment and follow-on segments
Link all to your P&L projections
TEDCO TOP 10 LIST
#6…
Show us a value proposition.
Will anyone buy what you’re selling? Why?
Beta testers or early adopters.
Competition? Include “do nothing”.
Be careful with incremental cost savings.
Who is the paying customer?
TEDCO TOP 10 LIST
#7…
Show that you understand customer & market.
Minimize research report market size data.
Maximize actual market research.
Platform? Identify a target segment.
Life Sciences? Address FDA & reimbursement.
TEDCO TOP 10 LIST
#8…
Show us a go-to-market plan.
Can be a powerful competitive differentiator.
Don’t expect the customer to alter it’s buying habits!
TEDCO TOP 10 LIST
#9…
Link financial projections to all elements of your plan.
Can be a powerful competitive differentiator.
Include operating metrics…how big is the “problem”?
Support your investment needs.
Don’t run out of cash and don’t make math errors.
TEDCO TOP 10 LIST
TEDCO TOP 10 LIST
#10...
Show that you’re an effective communicator.
We aren’t experts in everything – pitch so your grandparents get it!
Get outside help with your pitch…and practice.
Get someone not familiar with your application to proofread your proposal & presentation.