Xipeng Shen, a professor at North Carolina State University and co-founder and CTO of CoCoPIE LLC., wrote about how they started the high-tech startup. Their team, composed of researchers with PhDs, ventured to solve the crisis of chip shortage.
Shen, also an ACM Distinguished Member, tells how the team aimed to operate and power the next-generation technology. The challenge was to do this without the need for expensive hardware that would cost dollars in the billions. They felt the need to put their ideas into action as the same hardware takes years to be deployed.
Deep tech startups, especially those in need of funding, will find the capital game a complicated scenario. The venture capital world focuses mainly on low investments but high returns deep tech companies. That being said, it is also impatient when it takes a longer time for these to get tech startup funding.
PitchBook, a SaaS (Software as a Service) company that delivers data, research, and technology covering private capital markets, stated that the VC landscape leans towards megadeals amounting to $100 million and more. However, this does not generally apply to startups in their early stages of existence with only a few employees in their team.
Shen also added that they did raise funds from Sequoia Capital, one of the VC world’s top players. This was when they got into the Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) program. Despite this, they knew that their solution had much more value than a chip that would go straight to the reject line.
This has then led them to apply for a federal grant. This is also why they believe that deep tech companies should add “America’s Seed Fund” to their fundraising endeavors.
Credibility First
Shen states that SBIR/STTR programs abound. Their difference is that the National Science Foundation powers them. He says that grants such as these are on the high-competitive levels, and those chosen enjoy the benefits of a strong and established company technical image that proves credibility in the market.
Candidates in tech startup funding are in the thousands, and if chosen, it grants them the privilege of signaling that their innovation has robust technical and commercial merits. It also gives the high potential for a substantial impact on the U.S. economy. It will be a badge that lures in potential investors. And in the event that you don’t get chosen, the review committee will impart feedback that will be invaluable to your company.
Authority and Equity
When a startup receives funding, it usually isn’t for free, and you have to give something back. This can be in the form of interest payments for loans or equity for VC funds. The SBIR/STTR programs let you keep full ownership of your business and IP. They aren’t concerned with boosting strategy, instead, they believe in your company’s vision. Thus, they aim to assist you in bringing your ideas into reality with the goal of investing in a better future for the American public.
Shen adds that CoCoPIE’s vision is to allow real-time AI for off-the-shelf mobile devices. When the semiconductor, digital media, and IoT industries adopt it, we’ll see an improvement in how we consume, learn, and interact with our devices.
Potential Tech Startup Funding
The SBIR/STTR program operates on three gated phases that further your products towards commercialization. Up to $2 million in funding is what they can get, but in Phase III, you will compensate for the precise enterprise through authorities procurement contracts.
