This week we’re taking a look at the investment landscape in Iowa and as part of that series, we’ll be sharing the stories of entrepreneurs who have closed a round of funding in the last year.
We hope these profiles give insight into how a community of entrepreneurs has pursued different avenues to make their businesses a reality.
When it comes to raising capital for your company, Igor Inc. president and CEO Dwight Stewart says there’s no “magic bullet.”
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What he’s found are lots of different ways to fund an idea.
“What is comes down to at the end of the day is creating a network so that when you do want to go to raise investment your network can help support you,” Stewart told SPN.
For Stewart, that network has spanned from angel investors to venture capital firms and state economic development organizations.
Last year when Stewart first started Igor, he says that his track record building and selling companies—Stewart and his co-founders exited Quality Attributes Software Inc. in 2011—contributed to CISCO Systems, Inc. approaching him with an idea. The idea for a company that provided software solutions for the power-over-Ethernet lighting industry eventually became Igor and was supported by CMA Ventures, the venture investment fund owned by the Central Iowa Power Cooperative (CIPCO).
Stewart calls the process of funding Igor and getting the company off the ground a “long domino effect.” Along with CMA Ventures, friends and family contributed early funding to the startup as Stewart established connections with local angel investors and business leaders who would later support Igor’s larger fundraising efforts.
More recently, Des Moines-based Next Level Ventures led Igor’s $2.5 million Series A round of funding. While the firm typically looks to companies with at least $1 million in annual sales, the $30 million fund—the state’s largest—made Igor its second portfolio company largely because of the potential its investors saw.
“It’s very atypical for them to get in this early in a company,” Stewart said of Next Level. “But with all that momentum and the position we have, they made an exception and put in a substantial amount of money.”
With Next Level’s involvement, Igor was able to significantly increase the amount its Series A round, and Stewart says the raise will help Igor begin executing on its growth plans and help establish a cash flow.
Stewart also secured $300,000 in funding from the Iowa Economic Development Authority’s Iowa PROPEL fund, a seed capital co-investment program that helps accelerate private investment. Last year Igor also received funding from IEDA’s Iowa LAUNCH program.
“It was a great opportunity for us and a huge vote of confidence that the state put in money,” Stewart said.
“I think there’s a lot of interest in Iowa to incubate and foster a successful community of entrepreneurs and technology so it can be a foundation for those same people after they’ve been successful and will put that money back into the community.”
More than anything, Stewart says it’s important for entrepreneurs to validate their ideas, not only with customers but also with major players in their respective market—even if they might be concerned about sharing their big idea.
“If you’re scared to talk with people about an idea you have because you’re afraid someone will take it, it might not be that great after all,” Stewart said. “If it’s that easy to execute on someone might be doing it already anyway.”
Credits: Photo from the Des Moines Register.
