NYA FOUNDER SPOTLIGHT ‒ MICHAEL BEIRO, LINEBIRD FOUNDER & CEO
Michael Beiro, Founder and CEO of Linebird, fell in love with invention early on in his life. Michael was born in Edison, New Jersey, which is home to the Thomas Edison Center at Menlo Park where the phonograph and the incandescent light bulb were invented. He still today keeps the 'Thomas Edison Center' mug at his desk. In high school, he went with his FIRST Robotics Competition team to the world championships, and then in college, he built a network with the local power company. Michael received a problem statement from Dominion Energy during senior year as part of a student project that turned into an invention, a patent, a prototype, a team, a company, which is how Linebird was founded. Linebird uses drone technology to reduce the hazardous man-hours and boost efficiency of electric utility line maintenance.
How did you first meet New York Angels?
I first met New York Angels through the Clean Tech Open Accelerator program in the summer of 2022. Then in early 2023 when we were following up with a few of the programs, the Northeast Clean Energy Council connected us with Tom Blum of New York Angels, who introduced us to the broader organization. It was at that point in time when NYA expressed interest and encouraged us to apply via Gust. After we received NYA's initial response, we had back and forth Q&A, followed by some pre-diligence work. After further discussion, we were invited to pitch to NYA Members, and a few months later we closed the deal.
What was the process like for you when you were fundraising?
How graphic will you allow me to be to describe the fundraising environment of the last year and a half? The overall fundraising process was a tough environment for everyone with these last two years filled with fears of inflation, recession and everything else. There has been a lot of investment pull back – especially from non-traditional and non-SaaS companies. As a hardware company in the energy space servicing utilities, it was a challenge getting people to listen long enough to where they would hear our story, hear the value that we're proposing and providing, and then start listening and talking to us in a serious way. Thankfully, we were able to find a good niche in the cleantech and energy space, especially with tailwinds like the Bipartisan Infrastructure Law and Inflation Reduction Act.
I saw a graph somewhere that showed that the best places to be during this fundraising environment were earlier stage seed and angel stage rather than Series B and Series A stage. Vertically, being in energy and cleantech were the best safe harbors from the storms of the fundraising world. Still, it took us awhile to find that niche, and then once we did find it, the conversations became a lot easier. Overall, the value of what we're providing clicked for the people we were talking to, and that was really encouraging.
How did you choose to work with New York Angels when you were fundraising?
We decided in late 2022 that it was going to be time for us to raise again. In early 2023, we started to see some big sales closing, which really started to build some traction around the round. Our largest investors to date put in a term letter, not just a term sheet, which stated that they would lead the round under certain terms. They advised that it was a tough fundraising environment and thought we should raise less than we had planned. Originally we set out to raise $1.5-2 million, and they said, let's do $750,000. This was the round that we started shopping around when we applied to New York Angels.
We had a major commitment from the Virginia Innovation Partnership Corporation, a big state backed entity that makes investments and provides grants to technology startup companies, especially in verticals and industries of interest to the state. Then we needed to complete the round, and that led us to New York Angels. We had ongoing conversations with a couple of other groups that wound up joining the round. In early June 2023 we received the term letter that made it official that we had a lead for the round. We started closing checks that month with some of our previous angel investors. In December 2023, we closed the majority of the round with New York Angels, VIPC, and a family office that joined in (they were related to the FIRST robotics team that I was a part of in high school). We also had a few smaller checks from other angel networks – one here in Virginia and another in New York. That's how everything came together.
We had a lot of conversations that are yielding fruit now with more strategic Series A type energy investors, who are with funds backed by power companies that we aim to serve. They had originally said that they love the technology and definitely see the strategic value in our company, but it was a little bit earlier than they typically invest, so they encouraged us to stay in touch for the next Series A or a larger seed round.
The fun part of this story is that while we set out to raise $1.5 million or so, we were talked down to $750k, but we actually closed around a hair under $1.25 million. We wound up over subscribing almost to the point that we had originally said was our need. We had a happy ending to our six month raise.
We're tremendously thankful and grateful to have the New York Angels as partners in this endeavor. Going into Due Diligence with them was a major turning point in the fundraising round. The credibility, connections, and value they brought to the table has been really transformative for us as a business.
What have you enjoyed most about working with New York Angels?
To pick just one thing, I would say I have most enjoyed the level of effort New York Angels put into understanding our customers. This was something that we hadn't seen before to thtat degree from individual angels or a group of angels. Typically, you'll see investors have 1-2 conversations with people in one representative customer segment. They do this to get an idea of what your value is to customers and how excited they are for what you're doing. New York Angels did a lot more of that, not just with the direct power companies, but also talking to tool manufacturers and distributors up and down the value chain. NYA really worked to understand what we were trying to do and what the value of it was. Many groups just asked for our forecast, balance sheet, P&L, and then made decisions just based on those numbers vs. really understanding what we do. New York Angels put a lot of effort into understanding the full story and capturing the vision of where we saw ourselves – transforming how work gets done on the power grid.
What advice would you give other founders who are looking to fundraise?
Be authentic. Be personable. You see a lot of people who struggle in fundraising are either: 1) very technical types who aren't as good at relating to people and explaining the value of their product, or 2) those who aren't ready to share the whole story of how they got there and what they're doing – maybe they're scared about people stealing their intellectual property or other concerns like that. I'm definitely not saying to disregard those concerns, but once you have a reasonable understanding of protection, you can just be yourself and not be afraid to share and answer the questions angels are asking. Doing your homework beforehand so that you have good answers to those questions, the total addressable market, and basic information like that is very important. Always make sure to have good analysis and good data to support your answers is also critical in doing well in this funding environment. It's not enough to just put up a hockey stick, go to Silicon Valley and get funded anymore. That world is gone.
What advice would you give other early-stage investors who are looking to invest in companies?
I'll say a couple of things that are probably common knowledge in the investing world. Everyone says, "bet on the jockey, not the horse." Get to know the founders and the team. Get an understanding of their grasp of the market. Find subject matter experts that you trust in the market or company that you're looking to invest in.
Founders will appreciate a quick "no" or clear feedback a lot more than you being in paralysis of analysis – trying to gather as much information as you can about a certain company or certain opportunity to weigh it against all of the other opportunities for investment that are out there. Being able to say, "I'm interested and I'd like to learn more about these specific things." Or "Let me know when you've crested this milestone that you just gave me, and when you do, I have to put up with what I'm willing to talk about, or offer or invest at that stage." I think founders would really appreciate that, and they will also make you a better investor in early-stage companies because just looking at the numbers, the financials, the projections are never going to be enough to adequately evaluate an opportunity.
What has driven Linebird's success?
Our origins and our commitment to them are two major factors of our success. We started with a problem statement from a Fortune 500 electric power company. So right off the bat, we had industry subject matter experts, helping us solve our problems that solve the problems that we were trying to solve for them. We had industry credibility, connections to major research institutions and other institutions.
My co-inventor is a former aerial lineman. He used to hang out of helicopters for a living, working on power lines across the country. So we really can say that Linebird is a solution that's built by linemen for linemen for the utility industry. With that customer mindset and culture in mind, we developed a best-in-class product. Linemen don't buy cheap tools or cheap products. Quality, specifically durability and reliability, matters a lot across the industry: from the boots on the ground operating in the field to the engineers in the control room all the way up to the executives. Having a good understanding of that, and being in some cases even more diligent and concerned about liability and safety in the deployment of these technologies on critical infrastructure than even some of our customers are, have been major factors in our success.
It runs counter to some of the typical wisdom in the startup world. We say, we reject "move fast and break things". No one in the utility industry moves fast, and if you break things you're done. Move fast and break things internally, but make sure that everything that leaves the lab is of the highest possible quality and reliability. Once our customer can see the product, it has to be the best thing for them.
