tcf.. cif.. wtf(unding)? how to prepare a winning application for tcf/cif

WTF(unding)? How to prepare a winning

application for TCF/CIF

To invest or not . . . That is the question

The Application &

Review Process

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 hahn@tedco.md

Cybersecurity Investment Fund

Purpose:

Fund product development to position a company for follow-on investment

Who:

“Cybersecurity” 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 hahn@tedco.md

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

1st

Application Due Date

Compliance Check and Initial Review

Compliance Check and Initial Review

Site Visit

Site Visit

Pitch to Committee: 3rd Wed of the month

Pitch to Committee: 3rd 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?

W W W . T E D C O . M D

Where do I get more information?

Request for Application

Funding Document

Application Link

Program Manager

Checklist

Designing a

Suitable Project

Concept vs. Reality

No Napkins . . . Please!

What’s a Good Project?

A commercialization pathway

What’s a Good Project?

An addressable market

What’s a Good Project?

Qualified team

What’s a Good Project?

Differentiation

Project Details

12 Months

3 Milestones

20% Indirect costs

50% Company match (cash or in-kind)

Actual Project Example

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

Financial Projections

Basic Rules…

1. Yes, you do need financial projections!

2. It's not accounting, it’s business.

3. Are never be correct…but must 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. Goal is to discuss assumptions, not numbers.

Market…

“I need 0.01% of this huge market to make money!!”

Macro (Top Down) approach is not acceptable

because no one can assess whether your plan is

reasonable and whether you can execute.

Micro (Bottom Up) approach is preferred because it

starts with the customer and is grounded in market

research.

A Suggestion…

Link your Market Segmentation Strategy & Market

Research to your 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.

In other “words”…

Financial Projections Template

Financials are not separate from the business plan. They are a different way

ofrepresenting 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…

1. Calculate % share of the total market.

2. Share should be reasonably attainable, allowing for

plenty of downside risk and upside opportunity.

3. In other words “not too large and not too

small…just right!”.

4. 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?

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, not just those submitted this month.

TEDCO TOP 10 LIST

#3…

Show us some data.

Life Sciences – in vitro studies

Engineered products – prototype & lab testing

Software – MVP & some user feedback

And 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?

Remember…Marketing & sales is commonly overlooked.

TEDCO TOP 10 LIST

#5…

Show us a business, not just a technology.

Revenue model.

Go-to-market plan

Competitive analysis

TEDCO TOP 10 LIST

#6…

Show us a value proposition.

What “pain” are you alleviating?

How is the value of your solution measured?

What will motivate the buyer to act?

TEDCO TOP 10 LIST

#7…

Show that you understand customer & market.

Maximize actual market research.

Platform? Identify a target segment.

Life Sciences? Address FDA & reimbursement.

And be sure to identify the paying customer!

TEDCO TOP 10 LIST

#8…

Show us a go-to-market plan.

Can be a powerful competitive differentiator.

And 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.

Please 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 a stranger to proofread your proposal & presentation.

Questions?

Questions?