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Raising capital leaves founders with ‘high five’ moments plus plenty of failure

Startup Companies

Startup company founders have an opportunity to learn how to raise capital from entrepreneurs and investors at a seminar in September.

The Raising Capital Seminar will take place from 8 a.m. to 3 p.m. on Sept. 21 at the BrownWinick Law Firm in Des Moines.

Speakers will include local entrepreneurs and angel investors.

Alec Whitters, CEO of Higher Learning Technologies—an Iowa City-based technology company—said he’s raised capital three times totaling $15 million.

“It’s very time consuming but also very valuable to have done,” Whitters says. “Because usually the people who have money, are also smart. Not always, but in most cases there is and being able to tap into a bunch of smart people is really valuable.”

Whitters says entrepreneurs underestimate how long it will take to raise capital.

“I think a safe rule to tell people is that once you have all your stuff together, it takes about three months,” Whitters said. “But usually it takes two or three months to figure out how to present your company. And the more money you raise the longer it takes.”

Gregory Bailey, founder and CEO of Denim—a Des Moines-based social media company—said he’s starting the third round of founding now.

He’s raised over $500,000.

Bailey explained that the initial round of funding to get the idea off the ground was called the, “Friends and family” round—where personal capital is also invested. The second round is where Bailey and his cofounders pitched to investors.

Bailey says that second round can take anywhere from three to six months.

“The first guy I pitched here in Des Moines ended up investing,” Bailey said. “I thought wow this is going to be really easy, and then the next three to six months I was pitching to other types of investors around Iowa and none of them ended up investing.”

Bailey said they have investors in Missouri, Texas and California.

He remembers where we was for the Texas call.

“It’s a high-five moment,” Bailey says laughing. “I’ll tell you I can vividly remember that I got a call from the executive with the Insurance company out of Texas on my cell phone at 7 p.m. on a Friday with my kids and my wife.”

Any advice?

Bailey says plan on having twice as many meetings, “As you think you’ll have to and plan on it taking twice as long as you think it will take.”

“The people that you go into a meeting thinking they are a sure bet typically are not,” Bailey says. “Just don’t get emotional and keep going.”

Whitters uses the saying, “Ask for advice, get money twice. Ask for money, and get advice.”

“Build real relationships so that people sit on the same side of the table as you,” Whitters says. “If you go up to people and just give them your pitch, they will almost always say no.”

Raising capital leaves founders with 'high five' moments plus plenty of failure | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at
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