178: Venture Capital Funding for Hardware Startups

Toph Day is the CEO of Elevate Ventures, a Venture Capital firm that has many hardware companies in its portfolio of over $220 million of investments under management. He has founded 8 companies with over $600 million in transactions over the past 30 years. Today Toph is going to share some valuable knowledge for inventors, startups, and small manufacturers on what venture capital funding is, if VC funding is right for you, and some advice on how to plan for and pitch your hardware startup to VC firms. Today you will hear us talk about: Venture capital is later stage, more sophisticated, and usually beyond  Make your pitch and plan to be very tight. It is important understand what your venture capital firm invests. Make sure the venture capital firm invests in hardware technology. Relationship build with your investors about a year in advance. Keep your pitch to the pitch, don’t embellish Structure of Venture Capital funding When you start your company, start with a very clean legal structure. Use a convertible note for your investors When raising capital, check out all the programs and grants available Don’t include grants as revenue Hardware startups can grow to be successful slowly You can also grow hardware companies much quicker  Surround yourself with partners, rely more on partners than hiring. Prototypes require multiple iterations Narrow and deep plays into hard tech, keep the product’s first version simple EPISODE LINKS: Toph Day Links: LinkedIn | Elevate Ventures | Rally Conference The Product Startup Podcast Links: https://www.ProductStartup.com/ Instagram | LinkedIn | Facebook Page | Facebook Group | Pinterest | Twitter | YouTube Mako Design Links: https://www.makodesign.com/ YouTube | Instagram | LinkedIn | Facebook | Pinterest | Twitter Kevin Mako Links: Instagram | LinkedIn | Quora | Facebook | Twitter Partner: PTC’s best-in-class software solutions Onshape: The only cloud-native product development platform that delivers full-featured computer-aided design (CAD), integrated product data management (PDM) and enterprise analytics in a single system, and Creo: 3D CAD solution that provides designers with the most innovative tools to build better products faster, such as generative design, additive manufacturing, real-time simulation, IIoT, and augmented reality. Producer: MAKO Design + Invent is the original firm providing world-class consumer product development services tailored to startups, small manufacturers, and inventors. Simply put, we are the leading one-stop-shop for developing your physical product from idea to store shelves, all in a high-quality, cost-effective, and timely manner. We operate as one powerhouse 30-person product design team spread across 4 offices to serve you (Austin, Miami, San Francisco, & Toronto). We have full-stack in-house industrial design, mechanical engineering, electrical engineering, patent referral, prototyping, and manufacturing services. To assist our startup and inventor clients, in addition to above, we help with business strategy, product strategy, marketing, and sales/distribution for all consumer product categories.