Over the past 17 years, veteran startup founder and CEO Jen Baird has raised nearly $60 million in financing for new ventures across different industries. In the process, she has tapped a variety of funding sources, including government grants and contracts, angel groups and venture capital investors.
Currently, Baird is raising a $9 million Series A round for her newest startup, Fifth Eye (formerly Trove Analytics), which is commercializing innovative software as a medical device to predict patient deterioration hours earlier than state-of-the-art vital signs monitoring systems.
“Fundraising is critical for a startup, because it provides the fuel to build and commercialize the company’s product,” Baird says. “In Michigan, the number of investors has increased over the years, and more funding has been raised for investments in a more-diverse array of companies.”
Nevertheless, fundraising is never an easy task, according to Baird. “First of all, fundraising is a highly competitive world,” she observes. “Second, only so many companies have the characteristics needed for raising venture money. While the size of investment rounds has increased, the absolute number of companies actually raising money has not.”
Often it takes one or two years of talking with investors to get a venture round done, according to Baird. “You have to go through the process of proving your company’s worth for investors,” she explains. “They ask tough questions and provide impetus for the team to level up. An enormous lift is required to demonstrate your company has the characteristics of a good venture-backed startup.”
According to Baird, the characteristics needed by investible startups include:
- Offering a unique response to a strong unmet need in a large market
- Having intellectual property that protects that response
- Building a strong management team with industry experience
- Identifying a clear pathway to product commercialization
- Demonstrating the capability to grow and scale the company
- Cultivating relationships within the venture-investment community
- Aligning the startup’s structure, opportunity and goals with those of the investorPrior startup experience and knowhow can help a founder or CEO gain fundraising traction faster, says Baird. “When you lead more than one company and have success, or even failure, you build up your skills and experience,” she explains. “Once you know how the fundraising landscape works, you can engage at a progressively more sophisticated, professional level. Everything you’ve done before contributes to your reputation in the fundraising marketplace and changes the conversation.”
- Networking is also a key component of successful fundraising, and there’s no better place to network than at the annual Midwest Growth Capital Symposium, Baird insists.
“I’ve found the greatest value of the MGCS is the networking,” she remarks. “The Symposium provides an opportunity for many people to come together in one place at one time.