In my second year as a Wharton MBA student, I secured $4,000 to launch my start-up PopInShop—an online platform that connects brands and boutiques to facilitate short-term, cross-promotional shopping events. The money came in the form of two grants from the Wharton Innovation Fund, an entity that was created in 2012 to fund student ventures and keep the school competitive with other academic institutions investing in entrepreneurial programs. After going through the application process, we came away not only with the capital we needed to get our idea off the ground, but also with some valuable lessons for higher-stakes funding rounds down the line.
I applied for the Innovation Fund in February of 2013. Working with a classmate, I spent two weeks putting together our forms and creating the required video explanation. We decided to ask for $5,000—the maximum amount granted—to test the idea for PopInShop in a few Philadelphia boutiques.
After submitting our application, we were elated. There was something about putting our plans in writing and sharing it with others that made us we feel legit and full of momentum. We were so confident that we’d get the grant that we started to spend the money before we had it. In March, we negotiated fees that we’d pay boutiques to host PopInShop pilot events.
But as the weeks went by, we began to get nervous. We heard nothing—not even notice that our application was under review. Our sense of urgency magnified as the date of our first pilot event got closer, so we decided to get more aggressive.
We found out the name and contact info of the individual who oversaw the fund and began sending regular emails. When we didn’t get a response, we called and left voice messages. When that didn’t work, I began to stop by the Innovation Fund office, desperately trying to make myself difficult to ignore.
It seemed like the persistence paid off when we finally heard back. Out of the blue and with no explanation, we were told that we’d been awarded $1,000 for our venture. There was no feedback on why that amount was chosen—just directions for how to sign the documents and get the money. Not wanting to look a gift horse in the mouth, we took the check. The only problem was that we needed more: We’d already committed $2,000 to local boutiques.
Try, Try Again
We went forward with our plans to pilot the PopInShop concept, confident that we’d find some way to meet our shortfall. After the event was complete, but before our first payment was due, I went back to the Innovation Fund office to see if there was a way to ask for more money. Though the person in charge was hard to track down, I did have some casual conversations with others in the office. Through this, I learned that there was an informal policy to award small grants first—most people who were awarded got $1,000—but then the fund would do follow-on grants if the grant recipient could demonstrate progress. I also learned that they rarely gave out the full $5,000 grant, but instead awarded ventures a maximum of $4,000.
Armed with this contextual information, I re-submitted our application, this time asking for an additional grant of $3,000. I mentioned our pilot event, and shared press clips from that first launch. Based on my past experience, I followed up on the application with daily emails, calls, and office drop-bys. After a week of this, we got the second check—just in time to pay for our first pilot.
Perhaps the process would have been less stressful if we’d gotten the casual run-down before submitting. Looking back on it, it seems obvious that external factors often dictate funding terms. This is one of the reasons that our current advisors recommend that before pitching any particular venture capitalist, we learn about their average financing round size, and how much they’ve already committed of their total capital.
It also seems obvious to me that when dealing with busy people, persistence pays off. I’ve seen this play out when approaching angel investors, many of whom are difficult to track down (and not because there’s something inherently wrong with our pitch).
But overall, I think the biggest success factor in getting the second, larger check was having an ace to play. I hear this now all the time, when getting advice on fundraising: Save some good news about your business so that you always have an update to share that demonstrates progress. We did this unintentionally, but it certainly worked to our advantage.Click here to join the conversation (0 Comments)
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