Working with Innovation Works
What makes us different than other investment firms?
We have tailored a process. Each of our programs has the same set of building blocks to help companies: investment, business assistance, and networks.
Am I too early for Innovation Works funding?
We encourage founders to contact us as soon as they can — the earlier, the better. For a first-time entrepreneur, the process of starting a business and developing a commercialization plan can be complex and challenging. Innovation Works can help to remove that mystery and help you identify and evaluate the options available to you. We can offer objective feedback as to the readiness of your plan and can assist your team in identifying future objectives.
I’m new to entrepreneurship what are some terms that I should know?
*We’re putting together a list of the words and definitions every tech entrepreneur should know. Check back soon!
Learn About our Programs
What is the Seed Fund?
Also known as the Innovation Investment Fund (IIF). We invest in technology-based companies that have the potential to make significant contributions to the regional economy – particularly job creation.Learn More
What is the process?
There are a few different ways to connect with the Investment team.
- Online: You can fill out our Introductory Questionnaire. This way we’ll have your information in our database.
- In-person: Meet our team at one of the many events we attend throughout the region or at an event we’re hosting. Find Events.
- Office hours: We host office hours every Tuesday from 1:00 – 3:00 PM. Learn More.
How much money does Innovation Works invest in companies?
Initial investments are often in the range of $100,000-to-$150,000. The total amount of money that may be invested in a company depends on the company’s commercialization plans, the required finances, and whether IW alone, or IW in conjunction with other funding, will enable the company to make significant progress. We have the capacity to do limited follow-on investments, for special circumstances such as catalyzing an investment that included private sector investors. We believe that it’s the company’s best interest to attract private sector investment as soon as possible. Like the original investment decision, follow-on investments are evaluated against the budget and competition for that funding.
What kind of investment does Innovation Works make in a company?
When Innovation Works is the only investor, we invest in convertible notes. That means that when subsequent investors invest, we may convert our note into the security that the investor is purchasing, with a modest time-based discount to that investor’s share price, i.e., in the first year after the IW investment, we will pay a share price that is 90% that of the new investors. When we’re co-investing with others, we may choose to invest on the other investors’ terms.
What is the selection process?
Each year we prepare an internal budget for investing in companies based upon the outlook for our own funding from the Commonwealth of Pennsylvania and other sources. With this budget setting boundaries, we conduct:
- A rigorous review of the existing portfolio companies and their likely follow-on investment needs,
- The number & quality of the companies that are seeking an initial investment from IW.
Companies receiving investment will meet two primary conditions.
- First, the company, itself, is consistent with the IW mission of funding early stage companies that are commercializing technology, have the potential to have a significant impact on the regional economy, and an attractive ROI:
- How large is the market?
- Is it growing quickly?
- Are the incumbent participants vulnerable to disruption?
- Within that market, how much of it can the company realistically capture?
- Is the company’s offering “gotta have”, or “nice to have”?
- What are the barriers to entry for potential competitors?
- Intellectual property, such as:
- Trade secrets?
- Others, such as:
- Exclusive channel contracts?
- Key management?
- How much total investment will the company need?
- What kind of ROI is possible?
- Quality of the current & future management team?
- Will the company be able to attract top notch talent?
- How large is the market?
- Second, over 200 companies seek funding from IW each year. The successful companies receiving such funding must be among of the best 15-or-so out of the 200. About 1-in-20 companies seeking funding will receive it from IW. In a typical year, Innovation Works will add 15-to-20 new companies to its portfolio.