Skip to content Skip to sidebar Skip to footer

StemBox: Raising capital for the first time

StemBox

As a company built around educating young girls, StemBox had lessons of its own to learn.

StemBox started three years ago in Seattle as a company that targets young girls who can sign up for a monthly subscription box of science experiments. Each month, a sophisticated experiment, authentic lab equipment and science accessories are mailed to homes across the country to help fuel their interest in STEM (science, technology, engineering and math).

The company moved to Des Moines in July of 2017. Founder Kina McAllister said StemBox is actively raising capital but having a hard time closing deals.

“It was interesting moving here and seeing the difference between West Coast angel investments and Midwest angel investment, it’s very different,” McAllister says. “We started with a convertible note that was popular on the West Coast but here they preferred straight equity so our term sheet changed.”

McAllister said securing $25,000 from the Iowa Economic Development Authority was their first—and only—successful fundraising effort.

“One thing I’ve learned is the exit strategy for the company, I was not good at articulating that,” McAllister said. “So that’s partially why the fund raise has been slow. Moving forward, it’s to grow the company that sells over the next five years to Scholastic, PBS or even a competitor.”

She said StemBox is looking to raise between $50,000 and $300,000.

Stembox
StemBox founder Kina McAllister

Building a team

As the only employee, McAllister says she thinks that could be another reason for the slow fundraising effort so far.

“People want to see you have a team,” McAllister says. “And for me I feel like I can’t afford a team without the fundraising, but you can’t get the fundraising without the team.”

As the fundraising effort continues, McAllister said StemBox is revisiting some of the old boxes from 2016 and bringing them back in 2018.

“So I can focus on getting the fundraising done then we can focus on new boxes instead of trying to do both at once,” McAllister says.

Revisiting Seattle

Because she’s kept in touch since moving to the Midwest, McAllister said it’s possible StemBox could look for investment from the West Coast.

“But I would love to have somebody in Iowa lead,” McAllister says. “It would mean a lot to me and any other entrepreneur coming from out of state to have some symbolic gesture like a lead investor from Iowa in a Seattle startup.”

On a visit to Seattle earlier this year she heard of a potential idea for a meetup between entrepreneurs and investors.

“A startup game of poker,” McAllister says. “All of these investors and entrepreneurs sit around and play poker with a $10 buy-in. I think that could be a setup here.”

Previous Coverage

Startups receive funding from Iowa Economic Development Authority – March 23, 2018

Scouting Report: StemBox moves from Seattle to Des Moines – Sept. 14, 2017

 

StemBox: Raising capital for the first time | 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 mpatane@clayandmilk.com.
This Pop-up Is Included in the Theme
Best Choice for Creatives
Purchase Now