Every startup that’s raising money needs to start somewhere. For startups in greater Cleveland, that place is the Innovation Fund Northeast Ohio. That’s where Doug Carr brought his company.
Doug founded medical device company Thermedx® in 2007 to transform surgical fluid management. During many endoscopic procedures, fluid is delivered to the surgical site to expand the body cavity and wash away blood and debris. This provides the surgeon with a clear field of view. Thermedx® wanted to develop a system that offered improved control, performance, functionality, and safety compared to the “old and tired” devices that were serving the market.
But the company needed cash to take its Fluid Smart™ System from idea to working prototype. And Doug wasn’t looking for just any investment. He had entrepreneurial friendly money in mind. “We wanted early-stage capital that was non-dilutive,” said founder Doug Carr. “That’s what brought us to Innovation Fund Northeast Ohio.”
Innovation Fund Northeast Ohio is a safe jumping-off point for anyone with an innovative technology or business idea. Startups win up to $100,000 to complete projects that move their ideas closer to commercialization.
What makes the funding so attractive? Innovation Fund Northeast Ohio doesn’t take equity. This is important for startups, especially those Innovation Fund Northeast Ohio invests in, since they’ll have to raise more money. The investment doesn’t dilute the startup’s ownership. And that’s what Doug was looking for.
Thermedx® received $100,000 from Innovation Fund Northeast Ohio in 2009. Doug put the money to work defining technology specifications, performing initial development work, and fleshing out the business concept. The investment moved the business from idea to early prototype, making Thermedx® ready for angel investors. Angels liked the business concept and seeing a working prototype raised their interest level and ultimately helped facilitate an investment.
“The more progress you can make before you have to take in equity investments, the more favorable the terms of the equity investment become,” Doug says. “That’s why early non-dilutive financing is so important.”
In four years, Thermedx® raised a substantial amount of capital, helping it secure patents, get FDA 510(k) clearance, set up manufacturing, and gain initial market traction. Last year, the company entered into an exclusive distribution agreement with a subsidiary of a major medical device company.
The distribution partner has made the FluidSmart™ a major, strategic focus of its business and because of it, Thermedx® is starting to realize the growth associated with having the best surgical fluid management system on the market and a highly trained, engaged, and motivated national sales force behind it.
The $100,000 Innovation Fund Northeast Ohio award made the startup process a little easier for Doug and his team. It was the right amount at the right time and under the right terms. It was entrepreneur friendly.
“Innovation Fund Northeast Ohio is unique and beneficial to entrepreneurs,” Doug says. “To receive non-dilutive financing at a very early stage and achieve important milestones confer credibility on the venture and strengthens the position of the entrepreneurs.”
Leigh Keeton manages Lorain County Community College's economic development messaging with a particular focus on its startup support programs, including GLIDE, the college's on-campus technology incubator, and Innovation Fund Northeast Ohio.