Raising Capital During a Pandemic
After we lost Vail in September of 2019, Steve and I couldn't sleep at night. No parent could, after their healthy, happy 16 month old child died in her sleep. Especially when no one could tell us why. So we began to look for a way to monitor our surviving child, Aspen, age 4. Steve and I were familiar with wearable devices, as we had used the Owlet baby monitor on both Aspen and Vail. After Vail's death, in our desperate search for answers, I called Owlet and asked them for all of Vail's data. The response was disappointing to say the least. Despite the fact that Vail had worn the device every night of her short 16 months of life, they did not have a way for me to access this data. The system didn't allow for long term reporting or data generation into usable reports. So, the 502 nights of data from her life were gone. I needed this data. I needed to know what I had missed. Yet, there was no way that was going to happen. So, we began to scour the internet. There had to be a device we could put on Aspen, one that would provide critical alerts if something were to happen to her and provide the ability to see her vitals data in a usable report. Except there wasn't. There was only one device on the market for children over the age 1 year. The Neebo, a device developed by a UK company to monitor children ages 1-5 while they slept. Despite the lack of adequate reporting, we ordered one at a cost of $299.00 While we waited for it to arrive, Steve began to design our own device, one that would meet all of our needs, not just nighttime monitoring. We contacted a patent attorney and filed a provisional patent. We started talking to everyone we knew, trying to make connections that would help us move forward. When the Neebo arrived, we began to use it right away. Despite its many failings and lack of features, it did give us a little peace of mind. Now I only wake up 3-4 times a night to check and make sure Aspen is still breathing, as apposed to the 8-10 times prior to getting the device. The most important thing that came out of the purchase was the awareness of what features worked and didn't work and what we wanted to put into our device, The VAIL Monitor.
Fast forward 5 months. We have raised $125,000 and completed phase one of product development. We have completed an extensive market analysis, specific to the VAIL Monitor, which is very promising. However, we hit a little snag. The same snag that every startup and every other small business hit: Corona Virus. The ensuing pandemic has put a damper on our capital raise process. Almost immediately after the initial media frenzy, we had multiple small dollar amount investors back out. It was understandable, as suddenly, everyone was out of work and the economy was tanking fast. The markets were down, people were panicked. No one was spending money. Certainly not our friends and family round investors who were planning on investing the minimum amount of $5000.
Steve and I had been waiting over a month for a critical meeting with University Health and their Rainbow Babies team. We had hoped this meeting was the start to a vital partnership with this large medical institution. The day before the April 1 meeting...the hammer dropped. The meeting was cancelled. The administrators who planned to be on the call were just too entrenched in the corona virus pandemic to be in the meeting. Totally understandable, yet still crushing to our fragile spirits.
So what do you do when you are at a crucial stage of the capital raise process and the entire world shuts down? Honestly, at first, nothing. We didn't know what to do. While we aren't new to the small business world, having managed our own construction company for 8 years, we certainly are new to the venture capital world. We don't have many connections and had no clue where to start now that everyone was on lockdown. So we sat still for a moment. After a week or so of feeling lost, we began to do what we have always done when searching for answers: research. What did we find? Not a lot. There were a few articles about how venture capital (VC) was dead now and the only way to fundraise is through crowd-funding platforms like kickstarter. This wasn't what we wanted to hear and frankly just not true. We had applied to be featured on StartEngine, an equity capital crowding funding platform, but hadn't heard anything yet. Our few connections to the VC community had told us to hold tight, that the people and firms with money would still have that money when things settled down. In fact, they may have more money than before. But that wasn't super comforting in the face of an undetermined amount of time with mandated social distancing. That's when a good friend sent us a link to RedCrow. RedCrow connects financial and human capital to healthcare start-ups. They are a community dedicated to sharing knowledge, interest and passion for healthcare innovation. Learn why RedCrow's platform is the pitch deck of the future: https://medium.com/@brian_36551/raising-capital-nows-the-time-to-be-a-headliner-and-take-the-mainstage-f9d49dd9a828
With no expectation, we reached out to their CEO and applied to be featured in their MainStage investor portal. We heard back within 24 hours that they were interested in what we were doing at Vail Industries. The CEO, Brian Smith and the RedCrow Managing Director Jack Miner agreed to meet with us via Zoom. We were beyond impressed with them and their platform. They were both excited to feature Vail Industries on both their Discover Supernovas and The MainStage platforms. After a week or two of prep-work....we are finally live on RedCrow! We anticipate that this platform will give us the exposure needed to close out our initial funding round and enable us to move on to the A-round. Take a minute to check out our two RedCrow profiles:
As budding entrepreneurs, Steve and I feel that we need to be well educated and plan for the upcoming recession. That means being flexible on terms and constantly reassessing our valuation. It also means focusing on potential relationships and partnerships, more than ever. Developing strong connections and establishing key partnerships in the healthcare industry is going to be key for Vail Industries. Fortunately for us, corona virus has highlighted the need for virtual medicine. And the VAIL Monitor is the ideal device to help facilitate growth in tele-medicine. We are focusing our market entry point on this path and believe it will be advantageous to our growth and success.
According to a Sifted article by Amy Lewin, published 3/16/2020:
“There are a lot of funds out there with a lot of capital to deploy, but they have years to do it. VCs can and will slow down,” says Paul Murphy, a partner at Northzone. “I think there will be fewer FOMO rounds because investors will take a bit more time to get to know and diligence the business, and I don’t think that’s a bad thing. The best companies will still get funded,” says Murphy. “It might take them a few extra weeks, and they might get a few less term sheets to use as leverage, but they’ll be fine.” https://sifted.eu/articles/startup-fundraising-coronavirus/
So things are full steam ahead at Vail Industries. We are featured on RedCrow. Our meeting with University Health has been rescheduled. StartEngine is showing interest. Steve and I stay focused every day on building connections and relationships that will drive our mission forward. What is our mission? First, we want to change the world. No biggie right? We believe that through the VAIL Monitor and the extended line up of health wearable devices yet to come, Vail Industries can change the way health systems monitor, diagnose and treat their patients. The monitor has the ability to change individual lives as well, by providing critical alerts and vital monitoring. Parents can be assured of the safety and well-being of their children and alerted of issues as they arise. It is our ultimate dream that the data generated by this device will be utilized in future research, not just for SUDC but for many childhood illnesses. Our children are the future, let's make sure they are safe and healthy. If you are interested in helping us achieve our mission, please reach out via email: firstname.lastname@example.org