The Right Investor for the Next Big Idea
Delaware’s landscape of private funders keeps growing
For those hoping to start and grow businesses in Delaware, there are plenty of opportunities to find the funding necessary to succeed. The state is known for its friendly atmosphere for commercial endeavors, and many avenues exist for those who need the capital to turn a great idea into a prosperous concern.
“There are folks that have problems that the market isn’t solving,” says Vincent DiFelice, the senior instructor of entrepreneurship and faculty director of venture support at the University of Delaware. “When you can tell someone, ‘I know you have a problem, and I am working on solving it,’ that person becomes an ally. You are getting their insight on the market.” DiFelice calls those allies “early evangelists” because they will serve to promote a fledgling business to the outside world, including potential investors. Delaware’s small size and close-knit entrepreneurial community makes it particularly easy to find those kinds of allies.
Once an idea is proven to be strong and necessary, the innovator behind it can seek the money necessary to thrive. Throughout Delaware, there are several potential avenues for new businesses to take in order to raise capital.
The Delaware Innovation Space sponsors the First Fund investment program, which offers startups a combination of cash and access to laboratory space to help them gather momentum. President and CEO Bill Provine reports the fund was created to “fill a void in the funding landscape” and to give entrepreneurs with great ideas “fuel” to keep moving forward.
Another important piece of Delaware’s funding scene is Leading Edge Ventures, an early-stage venture fund formed in 2015 by First State Innovation (FSI). General partners in the fund include Tangen Biosciences CEO Rick Birkmeyer and LabWare founder Vance Kershner, along with Mike Bowman, Jeff Davison and Doug Petillo.
Over the past five years, the fund has invested in 15 early-stage companies. FSI also connects entrepreneurs with funding through its FSI Angel Network of affluent local investors.
Regional collaborations add to options
At the Delaware Prosperity Partnership (DPP), those with new business concepts can connect with a network of investors — private and state-run — with the ability to help them move forward. According to Ariel Gruswitz, director of innovation at DPP, there are many options available.
“We are mapping the ecosystem for funding,” Gruswitz says. “Things have changed in the last couple years, and there are new resources. I think things have started to come together and that 2020 will be a big year for that. We want to get everyone around the table and to get alignment on each organization’s core competency and focus.”
The DPP is increasing its work with angel investors and venture capital funds. One example is the Mid-Atlantic Diamond Ventures Group, which is based in Philadelphia, but which held one of its 2019 quarterly meetings in Delaware. Since 2003, it has assisted more than 400 emerging firms by introducing them to a network of investors capable of providing capital.
Another avenue available to emerging companies is the annual Angel Investor Fair, held each year in Philadelphia, which brings together as many as 300 investors from the Mid-Atlantic region to hear pitches from a collection of hopefuls culled from a variety of applicants across nearly 20 industries. Over the past several years, the angel community has not only grown, but it has started to work more closely together to identify targets for investment.
“These groups have popped up over the years and have become somewhat structured,” says DiFelice. “[Investors] get together and talk about deals they have seen, and it’s up to the entrepreneur to connect with them and try to show them they have something that is investable.”