As an entrepreneur, how do I get money to fund my idea for a great product?
The official answer is the initial money for any business comes from the founder, then friends and family investment follows. If you won’t put money in, no one else will. The secret, however, is to not spend money. Trial your concept as fast and as cheaply as you can with a mock-up of the product. Use a 3D printer to make parts, since it only has to work a few times. By “failing fast, failing cheap”, you move on quickly without worrying how you are going to pay back your investors.
At what stage would I pitch to Maine Angels, and how would I do so?
Maine Angels are interested in businesses that can scale, meaning they can grow to substantial size and give more than a tenfold return. An application to Maine Angels is as simple as filling in the information requested at maineangels.org . My most common advice is to not come too soon, as we seek equity in your company so we share the risk and the upside with you. If your business is worth $1M today and we invest $200,000, we would own about 17%. If you grew the business for another year and the value was $2M, then you would get $400,000 for 17% interest in the company. First seek out ‘free’ money from pitch contests or grants.
Why would an investor choose to join an angel investment group?
Eighty percent of angel investments fail – angels invest in companies which are still in the formation stages with many unknowns. Investing alone means the individual needs to identify and evaluate all the risk factors. Joining the Maine Angels makes you part of an experienced and diverse group working together to understand investment possibilities; we also have more collective influence with deal terms. Plus, it is a great group of interesting individuals from different backgrounds who are fun to be around.
You’ve led domestic and international business units, regions, and functions for companies such as Hewlett Packard and IDEXX Laboratories. How did you come to join Maine Angels and share your expertise with local startups?
I may be a little unique in my answer. I am not from Maine, but came to work for Dave Shaw and IDEXX Laboratories more than twenty years ago. I often worked out of state, so when it came time to retire and give more back to my community, I found I really didn’t know Maine well. But it quickly became clear that Maine’s economic development will come from the growth of its many small startups. I joined Maine Angels, Envision Maine, and the Board for the Maine Center for Entrepreneurs to see where I could share my experience with local companies to help them grow. It has given me a chance to get to know many people with different talents, in different businesses, but all who want to work together to help grow Maine’s economy.
Your background as a chemist and your work in electronics and software are particularly relevant to the entrepreneurial scene in Waterville. What advice or resources can you recommend for tech-based entrepreneurs?
The key is a ruthless focus on the customer. How you apply technology to meet their needs is more important than the technology itself. I recently attended an event featuring Marc Randolph, co-founder of Netflix; he studied geology in college, but what he got most out of his experience was organization and managing field trips – not his knowledge about rocks. For me, problem solving is the application of the scientific method. I find that most business issues can be broken down into underlying models, similar to my old chemical molecular models.
Some books that may be of interest are: “The Innovator’s Dilemma” by Clayton Christensen, “The Laws of Simplicity” by John Maeda, and “Crossing the Chasm” by Geofffrey Moore.
Last modified: June 21, 2021