Is Venture Capital Funding right for me? How about these possible Alternative Funding Sources?
Executive Director Spotlight
A recent, much-read analysis of venture capital funds drying up – and quickly – probably didn’t surprise entrepreneurs trying to round up support. It’s death by 1,000 coffee chats out there sometimes, meeting with potential investor after potential investor and always walking away empty handed.
We’re coming to the end with a national romance with unicorn success stories, promoted with television shows like “Silicon Valley” and “Shark Tank.” Investment groups have been burned by taking shots on companies that never materialized. Now they’re looking for established companies with a proven track record, not fledgling companies in search of that first check.
At the same time, technology has lowered bar to entry into the app and software markets, meaning there are more innovators trying to interest fewer venture capitalists.
At the Wond’ry – Vanderbilt University’s epicenter of entrepreneurship and innovation – we’re steering more entrepreneurs toward a viable solution: federal programs to get promising ideas off the group.
First, we’ve recently become one of 70 university-based I-Corps sites, where entrepreneurs get months of coaching, mentoring and small grants to determine whether their ideas are viable. In turn, I-Corps gives them priority access to grants through the Small Business Innovation Research and Small Business Technology Transfer programs. Both programs support development and commercialization of cutting-edge technological advances by giving applicants access to a total of $2.5 billion annually – anywhere from $150,000 to potentially more than $1 million per company.
You can also apply for SBIR and STTR money without going through I-Corps, and our affiliates can help with that process.
Sometimes budding entrepreneurs aren’t keen on working with federal agencies because they have the misconception that it’s going to be slow and difficult, with onerous strings attached to the money. That’s simply not the case anymore. It’s not as easy as showing an eager investor a business plan and collecting a check, but the officials involved with those programs understand that today’s entrepreneurs must be fast and nimble, and they respond much more quickly than may have been the case decades ago.
At the same time, this funding may be better for entrepreneurs whose complicated ideas may take years instead of months to come to fruition, because individual, early-stage investors don’t usually have the patience for that.
And anyway, if you’re suffering through tons of unproductive coffee dates, what have you got to lose?