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.
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.
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.”
Startups receive funding from Iowa Economic Development Authority – March 23, 2018
Scouting Report: StemBox moves from Seattle to Des Moines – Sept. 14, 2017