Finding Non-Dilutive Funding For Your Technology Startup

Finding Non-Dilutive

• Why Non-Dilutive?

• Should you consider Government Sources?

• The Process: Customer Development

• The Best 3 Sites for Customer Discovery

• Customer Validation

• Conclusion

Why Non-Dilutive?

• Early money is expensive!

• Advantages of Non-dilutive funding:– Preserves equity ownership of founders/investors

– High risk, seed and early stage funding

– Build value for later rounds

– Very much like Non-Recurring Engineering

– Leads to customer engagement

– Positive value and traction message to investors

Should you consider the government as a Strategic Partner?

• Strong regulations favoring and protecting small businesses

• Relies on small businesses and not Prime Contractors for innovation

• Variety of funding and contracting mechanisms suited for “non-traditionals”

• Well documented requirements

• Completed projects lead to customer engagements

The Rosetta Stone

• Funding type is 6.1 through 6.6

• Aligns with Technology Readiness Level (TRL)

• Translates to Angel, Seed, and Early Stage VC funding.

• Most common funding vehicles/programs:– Broad Agency Announcements

(BAA)– Other Transaction

(OT)….Consortium– Small Business Innovative

Research (SBIR)– Across a variety of agencies (

The Process: Customer Development• Adapt Customer Development process to funding (Diagram)• Customer Discovery

– Alliance Mapping• The right partner with the right stage of funding

– Identify the Agency– Identify the Opportunity

• Customer Validation– Engage with Program Manager

• Create feedback loop• This is Business Development

– Very relational, high contact– Not just proposal writing– Results in funded projects and follow-on customers

Customer Discovery

• Your best resources

– DTIC: Follow the money

• Research and Development Descriptive Summaries

– FBO: Find the opportunity

• Fedbizopps.gov

– Defense Innovation Marketplace: Your Dashboard

– SBIR: Zyn.com

• Tutorials at Nondilutive.com

Defense Technology Information Center (DTIC)

• screen

FedBizOpps

• Search for all funding

Opportunities here

• First try funding type Keyword search

– BAA, Broad Agency Announcement

– OTA, Other Transaction

• Then drill down into

technology area

Defense Innovation Marketplace

Dashboard for latest:

-Strategic documents

-Agency presentations

-Funding opportunities

Customer Validation

• Determine if the opportunity is a good fit

• Engage with Program Managers or Principal Investigators

– Early engagement pays dividends

– Short window duration for engagement

– Drill down on Requirements

– Customer perspective is key

– Determine technology fit or pivot

Summary

• Treat every funding opportunity like a business development engagement

• Look for technology, agency, and funding type fit just like investor or partner

• Agencies use funding vehicles like “Other Transactions” for agility and ease of use

• Find out more at www.nondilutive.com