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I found group member Gary Rosensteel‘s situation so compelling, I had to share it with you here … not only to see if you can help … but because I’m sure his situation will resonate with many of your experiences, which I hope you’ll share in the comments. His story will also be the subject of Tuesday’s group announcement to 150,000 members around the world.

The story is Gary’s. I only edited it. He writes,

The top activity of almost all startups is looking for funding, but you must have the right “ask.” Not only in terms of how, but, sometimes, how much.

In today’s investment climate there’s a Dead Zone between $2–5 million. Below $2M you may be able to cobble together angel funding; just above $5M and you’re in the range of early stage VCs.

So what to do when you need $4M?

Meet Insituvue. We’ve tried to raise funds to take two versions of our Sonic Flashlight vascular access aid device to the global market.

With self-funding, grants, and convertible notes, we pieced together nearly $1.5M since early 2010. This enabled us to develop the first version of the Sonic Flashlight through three prototype versions to just short of final design for FDA submission.

Now, about nine months from achieving FDA clearance and selling into the US market, plus another six months from CE Mark certification and selling into the EU, we’ve run out of money.

We had all the funding we needed lined up. Then, shortly before the deal was finalized, the investors said funding “would be delayed” and their investment would have to be pushed into the next year. At that point, Insituvue had to start over: Identify funding, due diligence, etc. … especially difficult because we’re in the “Dead Zone.”

Worst, if we don’t get funding … and fast! … we’ll lose key talent.

To say, “This has been frustrating,” is an understatement. After pouring ourselves and our funds into the project for years, we had to suspend development so close to the “finish line.” Can you imagine how painful it is to tell clinicians and distributors around the world that, “As much as you’d like the Sonic Flashlight, we can’t sell it to you.”

Are you familiar with Bloomberg TV’s show, Innovators? They featured the Sonic Flashlight in one of its episodes. We know every time it runs.

Why? Because every time the episode airs, we get emails and phone calls to purchase or distribute product around the world. (The YouTube video, below, has nearly 5,000 views-to-date.)

It’s even worse at conferences. At the Association for Vascular Access (AVA) and World Congress on Vascular Access (WoCoVA) our exhibit is mobbed. Clinicians and distributors want it (see what happened at AVA) and several large companies already want to co-market and/or acquire the technology because the Sonic Flashlight fits their existing product line and the competitive edge it would provide.

So, despite:

• A company structure to support an early exit at a good multiple;
• An on-boarded team that’s ready to roll;
• Eager suppliers, GPOs, and distribution,

Here we sit with an unrealized dream, at least $2M to product launch with little time on the clock.

What to do? I’ve about exhausted ideas here.

Have you been in a similar situation? Did it have a happy ending?

Gary Rosensteel is the Executive Vice President and Co-Founder at Insituvue, the almost-makers of the Sonic Flashlight.