MedHab founder Johnny Ross shared his entrepreneurial wisdom with Angelo State University students in early November. RAM TV aired his talk, which I caught most of. He advised students:
- Make sure to have integrity
- Don't miss your milestones
- Under-promise and over-deliver to investors
- Don't be afraid to ask
- You set the standard
- Remember those who helped you
- Make sure you can speak to the finances
- Keep your balance sheet clean
- Don't give away your equity too quickly
Ross stated he'd raised $4 million from investors. He walked through his public capital raises. The first raise was $250,000 which cost Ross 7% of the company. Next he raised $1.8 million with investors getting just over 20% of MedHab. The third raise was $750,000 and investors received 5%. That totals $2.8 million for roughly a third of the company.
Ross didn't detail the remaining $1.2 million of "investment." He did describe needing $600,000 for working capital to buy Chinese components, but did not identify its source.
He gave great credit to Angelo State University as it served as MedHab's product development department. I never heard mention of the City of San Angelo's $3.6 million economic development package for MedHab. Ross did sing the praises of Tech Forth Worth and paying $1,250 a quarter for rent. The City of San Angelo did better providing rent for $1 a year, which he failed to note.
Oddly, Ross over-promised and under-delivered to the City on jobs and their timing. Interested City Council members wanted an update on MedHab's plans. They got a verbal sidestep, which paled in comparison to what Ross did for ASU students.
FDA approval is an expected 14 months away, according to Ross' talk, putting it at late 2014, early 2015. That's a big change from 2012. Two years late sounds like another over-promise and under-deliver. No wonder Ross won't show his face at City Council.