Seed Funding Process
Full Review Process
TEDCO reviews funding opportunities using a step-based process that strives to be straightforward and beneficial for the entrepreneur and also thorough and manageable for TEDCO. Even the most promising companies need to progress through each of the steps before receiving an investment. Those companies that are a good fit for a TEDCO Seed Investment but still need to improve aspects of their business will have the opportunity to improve at each step before progressing to the next. This gives companies the opportunity to present their best case as they compete with other applicants for the limited funds available.
The Full Review Process includes the following general steps:
Step I: Executive Summary Submission
Companies can submit an executive summary (approximately 2 pages) at any time using TEDCO’s on-line Portal to begin the review process. The executive summary should follow the Outline provided to make the reviews efficient. The executive summary will be reviewed by TEDCO’s Deal Team within a week of submission as a first step in the review process. The Deal Team will determine whether or not the company seems to be a fit with TEDCO’s Investment Focus.
Step II: Initial Meeting
Once the Deal Team has completed their review, applicants will be contacted to schedule a meeting to discuss their company. The meeting will be informal, but applicants can show slides or a demo of their product. The Deal Team members ask questions so they have a clear understanding of the business. They will work through the Outline and provide comments and suggestions for improvement.
Companies that are deemed to be sufficiently competitive (relative to other companies applying for a Seed Investment) will be invited to submit a Formal Application. Companies that represent a fundable opportunity but need to improve portions of their business model will be encouraged to re-submit a new executive summary when ready.
Step III: Full Application Review
Companies invited to submit a Full Application will do so, again, through TEDCO’s On-line Portal. Full applications, which should be approximately 5– 7 pages, should be an expansion of the executive summary (following the same Outline) that simply provides more detail and addresses any weaknesses identified during the Initial Meeting.
A printable version of a suggested outline can be found HERE
Full Applications are reviewed by TEDCO’s Investment Team and others from the business community. Full applications will be evaluated on clarity, strength, and fit to TEDCO’s Investment Focus. The Investment Team and other reviewers will also consider the company’s risk profile and opportunity for an economic return. Companies that are deemed to be competitive using these metrics will be invited to pitch.
Step IV: Pitch to Review Committee
On the 3rd Wednesday of each month, TEDCO holds its Review Committee meeting. Invited companies have the opportunity to pitch to TEDCO’s Investment Team and other reviewers. The format for the pitch includes a 10-minute, timed presentation followed by 15 minutes of questions and answers by the review committee.
Following the pitch, the Investment Team might conduct additional due diligence on the company before making a recommendation for investment. Final investment decisions are made by TEDCO’s President. Companies not selected for investment will receive feedback from the Investment Team.
Step V: Investment
Companies selected for an investment will be so notified in writing by TEDCO. The company will have 90 days to sign all of the required documents and close on the investment. TEDCO’s Seed Investments are tranched with 50% received at the closing and the remaining 50% provided once the company has achieved a milestone. The Investment Team and the company will determine a reasonable and mutually acceptable milestone prior to the closing. TEDCO’s Seed Investments will be made using a convertible note.
Applicants should be reminded that the review process is very competitive. TEDCO sees many good companies, but only funds approximately 20% of the companies that apply. As applications increase, this number will likely fall due to the limited funds available for investment.