Months before seeking investment for her startup, Evaguel Rhysing contacted venture capital funds to introduce herself and seek advice on how to prepare.
That proactive approach was the right move, said Leon Greene, managing partner for Hudson Valley Startup Fund. It led to the firm investing the most seed funding it ever had in a single startup, Greene said. The fund led a $1.3 million round for United Aircraft Technologies earlier this year.
Rhysing is CEO of Troy-based United Aircraft Technologies, which is developing a device that holds electrical wiring in place, initially meant to be used in aircraft.
The non-metal device is lighter and easier to install than traditionally used clamps. Sensors in the clamp use AI to map, monitor and diagnose specific issues within an electrical system, which users can view through a software application.
Between the increased efficiencies the product offers, the time of maintenance could be reduced from a week to hours. It’s a significant upgrade from the current system, which has been used since the 1940s.
Rhysing’s husband, Daryian Rhysing, founded the company after years of military service securing the traditional clamps, which caused carpal tunnel syndrome and led to the loss of his job.
The startup recently won Angel Investment of the Year Award from Upstate Capital Association of New York.
The Business Review spoke with Greene about his firm’s decision to invest in UAT.
How did you first connect with UAT? Evaguel contacted me. She wasn't ready to raise money. She was doing what founders should do, which is talk to investors before you need money.
This seems like one of those startups whose product seems long overdue. It took us a while to get through that. It doesn't make sense — it's mind blowing that the military is still using aircraft parts from the 1940s.
But as we dug in and we started working with them, they were extremely well-communicating. I think a fair portion of success in that first fundraising was because they spent so much time listening to what the questions were from the investor perspective, how people were cynical about the opportunity, where they needed to have extra proof points.
We spent about 18 months getting to know UAT and helping coach and offering some kind of investor-perspective mentorship. They are eminently receptive, so it's a pleasure to work with them because they listen to what everybody says and they factor it in their decision making of how they're going to lead the company.
Evaguel is a dynamo of business development, between her gregarious, outgoing personality, her communication skill and ability to sell the vision — she's a whirlwind of business development and relationship development skills.
How did that lead to investment? By the time we got to the point of making an investment, our members had seen her three times in our meetings. By that time, we had fantastic investor interest. Of the $1.3 million, we brought $900,000 to the table, which was more than double the largest investment that we had brought to the table previously.
Members were super enthusiastic — it was a unanimous vote to invest. On top of that, we had about 20 individual investors who wrote checks alongside the fund to bring that investment up to $900,000.
It sounds like a lot of founders wait too long to form relationships before asking for money? Yes. That is probably one of the most commonplace challenges that we have, is that folks don't show up until they need a check. It takes time to get comfortable with an investment, with a team, with a concept, and do appropriate due diligence to understand the opportunity.
What do you foresee coming up for UAT? They've got a lot of fantastic stuff going on. They're making amazing progress on their product, for which they've had continued innovation and patents granted, as well as opened up new market segments.
The initial concept for this came from Daryian’s direct experience as an aircraft electrician, but they've now opened that up. The wire harness management in this technologically enabled world that we're in is a problem, not just in aircraft but in all sorts of other places too, whether it's oil pipelines or drilling rigs or submarines or giga factories. Everybody is reliant on mission-critical wiring systems. No one wants a giga factory to go down because of a wire that got chewed through by a mouse and has some exposed insulation and is leaking current, or something. Then you have to go find it in 14 miles of wiring. This is the problem they're going to take on broadly across the industry.
I expect that in the next year, we'll see significant steps toward true commercialization. I expect that there will likely be another capital event for them in the next 12-18 months.
Interview has been edited and condensed.
