The Maryland Technology Development Corporation’s (TEDCO) Seed Fund invested $1.2 million in five state startups’ funding rounds, the fund announced Tuesday.
The companies cover fields ranging from biotechnology to health information technology to artificial intelligence.
“These startups exemplify Maryland’s thriving entrepreneurial ecosystem,” George Davis, CEO of TEDCO, said in a statement. “We are proud and excited to be a part of their growth.”
Having TEDCO involved in a funding round can help signal other investors that a business is worth funding, said Eman Noor, CEO of Insightin Health.
Insightin makes a personalized preventive health platform that allows consumers and health insurance companies to increase engagement.The Gaithersburg company received $200,000 from TEDCO during a fundraising round that raised $1.625 million.
“(TEDCO goes) through a pretty good due-diligence process,” Noor said. “Typically in a seed round, as we look for specialty people to be involved, a lot of times a good angel investor becomes important to us because of the connections that they have.”
The due diligence that TEDCO does is well-known and can help attract those angel investors, he said.
Companies such as Insightin are looking for investors who want to invest time and resources, not just capital. Insightin was able to be selective during its fundraising round because it wanted to find the right fit, Noor said.
“It’s not just a checkbook,” he said. “For our growth model we want to have the right team as part of our growth.”
The funds raised during this stage of a startup’s lifespan can help the company meet specific goals. Companies want to hire or expand or build new products, but they also do not want more capital than needed.
Doug Boccia, CEO of Vizual.AI, said he plans on using the funding to expand his platform and hire some more engineers. Vizual.AI raised $1.3 million, including $200,000 from TEDCO.
His Baltimore company uses artificial intelligence to pick the right image to get consumers to click through to content. It could be used for a web article or a video, but one of the things he plans to use the funding for is to expand where the product could work.
Fundraising required Boccia to split his focus and energy between building the product and bringing in investors.
“You have to put in the time and energy to raise the funds, but you also have to put the time and energy into building the product such that someone wants to fund it,” he said. “I think what we found was a great marriage of public and private money that suited our needs and was to the benefit of all partners involved.”
Three other Maryland companies also received TEDCO funding.