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Innovation: Financing the Dream

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
Sunit Sanghrajka launched LuxuryTrips.com without relying on outside investors. [Photo: Michael Price]
Instead of starting the business with a half-million-dollar investment, he and his wife started smaller, with $250,000 of their own money. So far it’s worked out. Luxury Trips, which puts together custom itineraries for CEOs, celebrities and other wealthy travelers, posted $1.5 million in sales the first year, $3 million the second, $4.5 million last year and expects $6 million to $6.5 million in 2008. He says, “We’ve had really great growth.”

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.

Get Corporate Support

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.

Share Space

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.

Find an Angel

Early on, before venture capitalists want to participate, individual investors, known as angels, put the most money — hundreds of thousands of dollars up to several million dollars — into young companies. In Florida, the angel community is growing, says Nicholas W. Robbins, a corporate attorney focused on technology and venture capital in the West Palm Beach office of Gunster Yoakley. Of Florida, he says, “We’ve got tons of capital here.”

Angels typically know the industry where they invest, reside nearby and want to give hands-on assistance. “They bring years of experience,” says Robbins, adding that there’s a long-term bonus. “Angels source the majority of the venture deals.”

Finding angels isn’t easy, however. They aren’t listed in the phone book and they’re not likely to drive by your business. The best bet is to find a local angel group and network, network, network.

Fast Fact - Investors put $608 million into Florida companies in 2007, almost double the $319 million that Florida companies raised in 2006, according to the MoneyTree Report produced by PricewaterhouseCoopers, and the National Venture Capital Association. [Illustration by James Steinberg]
Getting Grants

Enterprise Florida’s “Phase 0” grant program is designed to help Florida businesses with proposals for phase one Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) federal grants. The program is run in partnership with select technology incubators, university tech transfer offices, economic development offices and small business development centers.

Phase 0 provides up to $3,000 for market research, proposal/grant writing, legal aid for patent filing, site visits to labs and other preparation for submitting SBIR or STTR proposals.

A nonrefundable $250 application is required. All applicants receive an assessment that includes an analysis of the fit of the proposed project to the solicitation, its scope, and an evaluation of the project’s technical innovation. The analyses are very similar to what happens in the proposal application process at the federal level.

Funding for the program is expected to be available at least through September 2008.

Resources: Florida Angels Groups

Angel Investment Forum of Florida
(772) 214-3017

Emergent Growth Fund
(352) 332-1631

Florida Angel Investment Alliance
(904) 861-2450

Gold Coast Venture Capital Association
Boca Raton
(561) 883-2456

New World Angels Boca Raton
(561) 620-8494

Springboard Capital
(904) 861-2400

Winter Park Angels
(407) 745-1354

Web Contact Only

Florida Angel Investors

Startup Florida

Steps: Venture Capital Basics
Before talking with investors, make your company as appealing as possible by following these steps:

» Build a management team. Most angel investors and venture capitalists won’t even look at a company unless it has a group of experienced managers.

» Prepare a business plan. Investors receive hundreds of business plans each year. Make yours stand out by clearly showing the opportunity and potential for your product or service. Be concise and tell the truth.

» Approach the right investor. Research investors before you make your pitch. Don’t waste your time on investors who have never put money into a company like yours.

» Know your market. Compile statistics, interview potential customers and read trade publications to get the full picture of your company’s growth potential.

» Network, network, network. Develop relationships with attorneys and accountants who have connections with well-heeled investors. Tell everyone you meet about your company and its needs.