In this tough economic environment, venture capital funding can be difficult to find.
In the U.S., startups’ total amount raised in Q1 2023 declined for the seventh straight quarter, according to Pitchbook.
The Buffalo region has had seven local companies acknowledge private, growth-oriented funding rounds so far this year. The two largest closes so far totaled $17.6 million.
Business First talked with the two startup leaders – Jon DeWald, CEO of HELIXintel, and Jon Strimling, CEO of CleanFiber – about how they successfully raised funds and their advice for other entrepreneurs.
CleanFiber, which manufactures building insulation from recycled corrugated cardboard, recently raised $5 million in debt financing and $1.7 million in equity. That’s on the heels of getting late last year a $10 million investment from AXA Im Alts, an investment management company.
When it comes to funding, Strimling said it’s important to know your options. He noted that this takes perseverance and a lot of time.
“You’ve got to be working every angle you can to find capital and exploring a variety of capital sources,” he said. “We’ve certainly done that in our process, looked at different ways to structure financing, talked to a bunch of parties.”
For HELIXintel, looking for options for a strategic partnership when it comes to capital and expertise meant analyzing what industries the startup already works with, DeWald said.
The business, which provides digital tools that help companies track, maintain and acquire equipment, recently raised a $11 million Series A round that was led by National Grid Partners, the corporate innovation and venture arm of National Grid.
HELIXintel works with economy sectors like utilities, insurance companies, manufacturers and property managers.
“Each one of these industries is receiving monetary value from the growth of our platform,” DeWald said. “They see the upside. We were able to show them what we’re building. Plus, they’re in it with us so they see it.”
CleanFiber’s recent debt financing round was led by Western New York Impact Investment Fund, a repeat investor. Tapping resources that have already backed your startup in the past helps attract outside investors and makes them more comfortable participating in a funding round, Strimling said.
For HELIXintel, the startup’s growth is what prompted the Series A raise. Still, DeWald said, he and his team took their time to think through how much capital was needed, when they wanted to raise and how they could make sure they could manage the rapid growth.
“Be in person, show up, be truthful,” he said. “We are who we are. There is no hiding what we’re doing. We don’t try to sell a story that we’re not building to investors, because it all comes out in due diligence.”
