Innovation: Financing the Dream
For small businesses, the search for capital is a constant challenge.
Before Sunit Sanghrajka opened his luxury travel business, Luxury Trips, he approached a travel-industry friend in Africa as a potential investor. Sanghrajka, who had worked for his family’s travel business for a decade, thought he’d spend $400,000 to $500,000 to launch the new venture in Stuart. But when the potential investor asked what percentage of the business Sanghrajka was willing to give up in return for the money, Sanghrajka thought twice and decided to fund it himself.
Sunit Sanghrajka launched LuxuryTrips.com without relying on outside investors. [Photo: Michael Price]
Financing is one of the biggest dilemmas for most new and growing businesses. Sanghrajka was lucky that his business didn’t require inventory and he had capital of his own to invest. Other businesses turn to credit cards or home equity lines of credit (if they’re still available) for startup cash. But there are other creative ways to launch a business.
Bryan da Frota, Jason Grzywna and Amir Rubin started their Gainesville company, Prioria, in 2003, after the tech bubble burst. The company is a developer of an unmanned micro air vehicle, or MAV. CEO da Frota and his partners knew that investment capital would be hard to get, so they spent several years making ends meet at Prioria by doing engineering work for other companies while continuing to work on the MAV technology. “We’ve used what I call BST funding — blood, sweat and tears,” says da Frota. Now, with military contracts in hand, they’re looking for $3 million to $6 million in venture capital.
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Don Packham, CEO and president of BlueKey Wireless Systems in Broward County’s Oakland Park, has spent most of his career in computer automation. With his partners, he developed a cellphone-based system that can replace the remote control used to open a garage door, start a car and set a home alarm among other things. Early on, he approached Overhead Door Corp., the industry leader in garage door openers. Although the company was only mildly interested at first, Packham took a working model to Overhead’s test facility and later convinced them to purchase 60 of the systems and give BlueKey a letter of intent for a licensing agreement. The sale and letter of intent have helped Packham with an outside investment deal currently in the works that will give BlueKey $250,000 plus assistance with technical issues and marketing.
At the University of Central Florida’s Technology Incubator, more than 50 companies share facilities, internet service, conference rooms and sometimes office and audiovisual equipment. They receive assistance with financial, legal, public relations, sales and marketing issues as well as opportunities for networking and education. The Florida Business Incubation Association (fbiaonline.org) lists 15 incubators across Florida that offer similar services.