1.
WTF(unding)?
How to prepare a winning
application for TCF/CIF

2.
To invest or not . . . That is the question

3.
The Application &
Review Process

4.
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

5.
Cybersecurity Investment Fund
Purpose:
Fund product development to position
a cybersecurity company for follow-on
investment
Who:
“Cybersecurity” companies in MD
What:
$100K Investment – 4 tranches
Additional $125K follow-on possible
When:
15th of every month
Program Contact:
Ron Kaese
rkaese@tedco.md

6.
Eligibility Requirements
 Companies with
less than 16 FTE’s
 At least 50%
working in
Maryland
AND
 Pre-revenue, OR
 <$500K qualified
investment

7.
Review Timeline
TCF
CIF
Month 1 Month 2
1st
15th
Application
Due Date
Compliance Review + Site Visit
Compliance Review + Site Visit
Preliminary
Review:
2nd Wed of
the month
Preliminary
Review:
1st Monday
of the month
Pitch to
Committee:
3rd Wed of
the month
Pitch to
Committee:
1st Wed of
the month

8.
 8% Convertible Note
 5 Year term
 Conversion triggers:
• $500K Qualified Investment
• Acquisition
 No discount
 No cap
Investment Terms

9.
Where do I get more information?
W W W .TE D CO.M D

10.
Where do I get more information?
Request for
Application
Funding
Document
Application
Link
Program
Manager
Checklist

11.
Designing a
Suitable Project

12.
Concept vs. Reality
No Napkins . . . Please!

13.
What’s a Good Project?
A commercialization pathway

14.
What’s a Good Project?
An addressable market

15.
What’s a Good Project?
Qualified team

16.
What’s a Good Project?
Differentiation

17.
Project Details
 12 Months
 3 Milestones
 20% Indirect costs
 50% Company match (cash or in-kind)

18.
Project Example #1
Timing Pmt Description
Up front payment, Months
1-2
$25,000 None
Milestone 1, Month 3
Set up purchaser aspects
of platform
$25,000 Scale underlying infrastructure
• Versioning
• Code optimization
Milestone 2, Months 4-5
Set up purchaser aspects
of platform
$25,000 Set up purchaser aspects
• Tagging
• Exporting data
Milestone 3, Months 6-7
Set up platform to enable
viral growth in usage.
$25,000 Set up supplier aspects
• Forwarding materials
• Sharing materials

19.
Project Example #2
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

20.
Financial Projections

21.
Basic Rules…
1. Yes, you do need to prepare financial projections!
2. It's not accounting, it’s business.
3. Projections will never be correct…but they have to
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. End goal is to be discussing your assumptions,
not the actual numbers.

22.
And just one more thing…
“I only need 0.01% of this really big market to make
money!!”
 The Macro (Top Down) approach is not acceptable
because no one can assess whether your plan is
reasonable and whether you can execute.
 Investors want to see a Micro (Bottom Up)
approach that starts with the customer and is
grounded in market research.

23.
A Suggestion…
Link your Market Segmentation Strategy to your Market
Research & 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.

24.
In other “words”…

25.
Financial Projections Template
Financials are not separate from the
business plan. They are a different way of
representing that plan.

26.
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.

27.
Now that you’re all done…
 Calculate your % share of the total market.
 That % should be reasonably attainable, allowing
for plenty of downside risk and upside opportunity.
 In other words “not too large and not too
small…just right!”.
 And, if you didn’t notice, what was just outlined
here is about 2/3 of a 10 slide investor pitch deck!

28.
What is TEDCO
Looking For?

29.
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.

30.
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.

31.
#2…
Refine your proposal with the help of outside advisors.
Because you’re competing with all funded plans.
TEDCO TOP 10 LIST

32.
#3…
Show us some data.
 Life Sciences – in vitro studies
 Engineered products – prototype & lab testing
 Software – MVP & some user feedback
There may be more stage-appropriate funding options.
TEDCO TOP 10 LIST

33.
#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?
 Marketing & sales is a commonly overlooked skill set
TEDCO TOP 10 LIST

34.
#5…
Show us a company, not just a technology.
 Revenue model
 Go-to-market plan
 Channel strategy
 Target segment and follow-on segments
 Link all to your P&L projections
TEDCO TOP 10 LIST

35.
#6…
Show us a value proposition.
 Will anyone buy what you’re selling? Why?
Beta testers or early adopters.
Competition? Include “do nothing”.
 Be careful with incremental cost savings.
 Who is the paying customer?
TEDCO TOP 10 LIST

36.
#7…
Show that you understand customer & market.
 Minimize research report market size data.
 Maximize actual market research.
 Platform? Identify a target segment.
 Life Sciences? Address FDA & reimbursement.
TEDCO TOP 10 LIST

37.
#8…
Show us a go-to-market plan.
 Can be a powerful competitive differentiator.
 Don’t expect the customer to alter it’s buying habits!
TEDCO TOP 10 LIST

38.
#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.
 Don’t run out of cash and don’t make math errors.
TEDCO TOP 10 LIST

39.
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 someone not familiar with your application to
proofread your proposal & presentation.

40.
Questions?
Questions?