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Raising Capital with Vision: $300M to See the Future
Introduction
In this article, we will explore how Roman Axelrod, CEO at XPANCEO, successfully raised $300M for one of the most ambitious deep tech projects of our time—AI-powered smart contact lenses. This funding was secured through leadership qualities that enhanced his strategic thinking and planning, which will be discussed in detail.
Capital raising isn't just about getting money in the bank. It's the difference between watching your competitors scale while you struggle with limited resources and actually bringing your vision to life. For startups and innovative companies, understanding how to attract the right investors at the right time can determine whether your breakthrough technology becomes reality or remains a prototype gathering dust.
This article breaks down the capital raising strategies that made XPANCEO's $300M raise possible. You'll learn about different financing methods, from bootstrapping to venture capital rounds. You'll understand how to prepare your documentation for investor scrutiny. You'll see why a clear vision combined with a detailed R&D roadmap matters more than you might think when you're asking investors to bet on the future. Whether you're raising your first seed round or preparing for Series B, these insights from Roman Axelrod's journey will help you navigate your own fundraising path.
Understanding Capital Raising: Foundations and Importance
Capital raising is crucial for business growth. It involves obtaining funds from external sources to support your company's goals. Whether you're starting a new venture or managing an existing business, fundraising plays a vital role in executing strategies, expanding operations, and staying competitive in your industry.
The Essence of Capital Raising
At its core, capital raising means getting financial resources from outside parties instead of relying solely on your own profits. It's like inviting others to invest in your vision, providing the money needed to turn ideas into reality. This process is especially critical for startups like XPANCEO, which requires $300 million to develop AI-powered smart contact lenses. Internal revenue alone cannot cover such significant research and development expenses.
Types of Capital: Understanding Your Options
There are several ways to raise capital:
- Equity financing: This involves selling ownership stakes in your company by issuing shares to investors. You can do this publicly through stock markets or privately through venture capital firms and angel investors. The downside is that you won't repay this capital like a loan, but you'll have to share future profits and give up some control over your business.
- Debt financing: In this case, you borrow money from banks or other financial institutions with a promise to repay the principal amount plus interest or fees. Your ownership remains intact, but you must make regular payments regardless of how well your business performs.
- Hybrid instruments: These are financial structures that combine elements of both equity and debt financing. For example, convertible notes allow investors to convert their loans into shares at a later date, while revenue-based financing ties repayments to a percentage of your company's revenue.
The Strategic Role of Capital
The funds you raise through capital raising serve various important purposes:
- Operations: They can be used to cover everyday expenses such as salaries, rent, and utilities.
- Growth: You can use the money to expand into new markets, increase production capacity, or boost marketing efforts.
- Acquisitions: If you're looking to acquire other businesses or intellectual property rights, capital raising can provide the necessary funds.
- Organizational transformation: Sometimes businesses need to restructure their operations or adopt new technologies in order to stay competitive. Capital raised can help finance these changes.
Understanding these foundations and importance of capital raising will empower you as an entrepreneur or business leader to make informed decisions about funding your growth initiatives."
Capital Raising Strategies for Startups and Companies
You have eight distinct pathways to secure capital for your business, each with unique characteristics that align with different stages of growth and business objectives.
1. Bootstrapping
Bootstrapping represents the most control-preserving approach. You fund operations through personal savings, revenue reinvestment, or loans from friends and family. This strategy keeps 100% ownership in your hands but limits growth velocity based on available personal resources. Many successful tech companies, including Mailchimp and GitHub in their early days, bootstrapped before accepting external capital.
2. Angel Investment
Angel investment brings experienced entrepreneurs and high-net-worth individuals into your cap table. These investors typically contribute $25,000 to $100,000 during pre-seed or seed funding stages. You gain not just capital but mentorship and industry connections. The trade-off involves equity dilution, typically 10-20% at this stage, and the need for a sharp pitch with detailed financial milestones.
3. Venture Capital Rounds
Venture capital rounds structure capital raising strategies for startups and companies through defined stages:
- Seed funding: $500,000 to $2 million for product development and market validation
- Series A funding: Several million dollars to scale operations and prove business model viability
- Series B and beyond: Tens of millions for market expansion and team growth
Venture capital provides substantial capital and strategic guidance but demands significant equity stakes and board representation. You'll work with investors who expect 10x returns and aggressive growth trajectories.
4. Crowdfunding
Crowdfunding platforms like Kickstarter or equity crowdfunding sites enable you to raise capital from numerous small investors. This approach validates market demand while building a customer base. The process requires intensive marketing efforts and public disclosure of your business concept.
5. Business Loans
Business loans through banks or SBA programs like the 504 Loan Program offer capital without equity dilution. You maintain complete ownership but assume repayment obligations with interest, regardless of business performance. This works best when you have predictable cash flows and collateral.
6. Grants and Competitions
Grants and competitions in innovation and sustainability sectors provide non-dilutive capital. Government agencies and private foundations award funding based on merit, though application processes demand substantial time investment and specific eligibility criteria.
7. Revenue-Based Financing
Revenue-based financing serves established businesses with consistent revenue streams. You receive immediate capital against future earnings, preserving equity while accessing growth capital.
8. Invoice Factoring
Invoice factoring is another option for established businesses with outstanding invoices. You sell your invoices to a third party at a discount in exchange for immediate cash flow.
Your choice depends on three critical factors: how much control you're willing to relinquish, the capital amount required, and whether you need strategic guidance alongside funding. A deep tech company like XPANCEO requires patient capital from investors who understand long development cycles, pointing toward venture capital or strategic investors rather than traditional debt.
Equity Financing and Debt Financing Options
When you're evaluating capital raising options, you're essentially choosing between two fundamental paths: equity financing and debt financing. Each carries distinct implications for your business structure, control, and financial obligations.
Equity Financing
Equity financing involves selling ownership stakes in your company through shares issuance. You can pursue this publicly through stock exchanges or privately through direct investor relationships. The key advantage? No repayment obligations. The trade-off? Dilution of your ownership percentage and future profit sharing with new stakeholders.
The distinction between venture capital and private equity matters here:
- Venture capitalists typically target early-stage companies with high growth potential, investing several million to tens of millions in Series A rounds and beyond. They focus on innovation sectors and provide strategic guidance alongside capital.
- Private equity firms, by contrast, pursue mature companies needing operational restructuring. They demand larger equity stakes and concentrate on traditional industries like manufacturing, agriculture, and retail.
Rights issues represent another equity approach where you offer additional shares to existing or institutional investors. This method maintains some control over who joins your cap table but still dilutes existing ownership percentages.
Debt Financing
Debt financing creates repayment obligations but preserves your ownership structure. Traditional business loans from commercial banks remain the most common route, with the SBA 504 Loan Program offering particularly attractive terms through Certified Development Companies. This program provides long-term fixed-rate financing for major assets, making it ideal for equipment purchases or real estate acquisitions.
Beyond conventional bank loans, you have several alternative debt options:
- Bonds issuance - selling debt securities to investors with scheduled interest payments until maturity
- Invoice factoring - converting outstanding invoices into immediate cash
- Revenue-based financing - repaying based on monthly revenue percentages rather than fixed amounts
The podcast episode on Raising Capital with Vision: $300M to See the Future featuring guest Roman Axelrod CEO at XPANCEO demonstrates how sophisticated companies often blend these approaches strategically rather than relying on a single financing method.
Insights from Roman Axelrod's $300M Capital Raise for XPANCEO's Visionary Tech
Roman Axelrod, CEO at XPANCEO, secured a remarkable $300M capital raise for a deep tech startup that's pushing the boundaries of what's possible. XPANCEO's mission centers on developing AI-powered smart contact lenses that integrate next-generation computing technology directly into wearable devices. This isn't incremental innovation—it's a fundamental reimagining of how humans interact with digital information.
The technology roadmap involves creating contact lenses that can display augmented reality overlays, monitor health metrics, and process information through embedded computing capabilities. You're looking at a convergence of materials science, biocompatibility engineering, miniaturized electronics, and artificial intelligence—all compressed into a device that sits comfortably on your eye.
The Deep Tech Development Challenge
Raising capital for deep tech requires a different approach than typical software startups. Roman Axelrod faced challenges that would make most founders reconsider their path:
Prototyping cycles stretch to approximately 2 years. Unlike software where you can iterate weekly, hardware development—especially at this scale—demands extensive testing, regulatory considerations, and material refinement. Each prototype iteration requires months of development, testing, and validation before moving to the next phase.
R&D costs reach $8M just for lab equipment. The specialized nature of developing smart contact lenses means you can't work out of a garage. You need cleanrooms, precision manufacturing equipment, biocompatibility testing facilities, and advanced imaging systems. These capital requirements exist before you've generated a single dollar of revenue.
Recruiting rare talent with specialized skills becomes a critical bottleneck. You need experts who understand both optical engineering and biomedical applications. You need materials scientists who can work with polymers at microscopic scales. You need AI engineers who understand edge computing constraints. This talent pool is exceptionally small, and competition for these individuals is fierce.
Vision Meets Execution
The $300M capital raise succeeded because Roman Axelrod combined a compelling vision with meticulous planning. Investors don't write checks for dreams alone—they invest in detailed technology roadmaps backed by patent portfolios and realistic financial projections.
XPANCEO's approach included comprehensive due diligence materials that demonstrated:
- Clear milestones with measurable outcomes at each development stage
- Patent protection covering core innovations and manufacturing processes
- Detailed financial projections accounting for extended development timelines
- Leadership mindset focused on team building and organizational transformation
The capital raise strategy acknowledged the reality of deep tech development while maintaining investor confidence through transparent communication about risks, timelines, and capital deployment strategies.
Preparing for a Successful Capital Raise: Documentation and Due Diligence
You can't walk into a fundraising conversation unprepared. The difference between securing investment and watching opportunities slip away often comes down to how well you've organized your documentation before you start reaching out to potential investors.
Your Capital Raise Checklist
Your capital raise checklist should include several critical components:
- A compelling executive summary that captures your vision in two pages or less.
- Detailed company structure documentation showing ownership percentages, board composition, and any existing investor rights.
- Audit-ready financial statements, including balance sheets, income statements, and cash flow projections for at least three years forward.
- Special attention to business plan financial projections, including detailed assumptions behind your projections, market size calculations, and realistic milestones tied to funding tranches.
- An understanding of the regulatory compliance landscape shaping your fundraising approach.
Why Each Component Matters
- Executive Summary: I've seen founders lose investor interest simply because they couldn't articulate their value proposition quickly.
- Company Structure Documentation: This is crucial for investors to understand the ownership dynamics and governance of your company.
- Financial Statements: These documents provide a snapshot of your company's financial health and are essential for investors to assess the viability of their investment.
- Business Plan Financial Projections: You're not just throwing numbers on a spreadsheet—you're telling a story about how capital will transform into growth. Investors will scrutinize these numbers during due diligence, so build them on solid ground.
- Regulatory Compliance: Understanding the regulatory frameworks before you start fundraising saves you from costly mistakes and delays that can kill momentum when investor interest is high.
Regulatory Compliance in Fundraising
The regulatory compliance landscape shapes every aspect of your fundraising approach:
- FINRA Broker-Dealer Regulations: If you're working with broker-dealers, Rules 5110, 5130, and 5131 govern underwriting terms and new issue allocations. These rules ensure fair pricing and prevent conflicts of interest in corporate financing activities.
- SEC's Regulation Crowdfunding: Under the JOBS Act, this regulation opened new pathways for raising capital from non-accredited investors but comes with specific disclosure requirements and funding limits. You'll need to file Form C and provide ongoing updates to investors.
- CAB Rules (Corporate and Agency Bond Rules): Established by FINRA, these rules create additional frameworks for certain debt offerings, emphasizing investor protections through transparency requirements.
By being proactive in understanding these regulations, you position yourself as a knowledgeable founder who can navigate the complexities of fundraising while building trust with potential investors.
Funding Sources Beyond Traditional Venture Capital
The podcast episode on Raising Capital with Vision: $300M to See the Future featuring guest Roman Axelrod CEO at XPANCEO reveals that venture capital isn't your only path to significant funding. You have multiple alternatives that can fuel your growth without following the traditional VC route.
Angel Investors: High-Risk, High-Reward Opportunities
Angel investors represent one of your earliest funding sources when you're building something ambitious. These individuals invest their personal capital into early-stage companies, typically writing checks between $25,000 and $500,000. The angel investment process demands you deliver a sharp pitch backed by a solid business plan with clear financial milestones.
AngelList data shows the reality of angel investing returns: portfolios of 20 companies generate an average IRR of approximately 7%, with 16% of investments losing money entirely. This means you need to understand what angels look for:
- Strong due diligence materials that demonstrate market opportunity
- Clear path to profitability within 5-7 years
- Experienced founding team with domain expertise
- Scalable business model that justifies the risk
Larger portfolios generate larger returns, but angels typically need a 10-year exit horizon to see meaningful gains. You'll want to position your company as one of the portfolio winners, not part of that 16% that loses money.
Private Equity: Capital for Mature Companies
Private equity investment criteria differ significantly from venture capital. While VCs focus on innovation sectors and rapid growth, private equity targets middle-market companies in traditional industries like manufacturing, agriculture, and retail. You'll find PE firms asking for larger equity stakes—often controlling positions—in exchange for capital to restructure operations and improve efficiency.
If you're running a mature business seeking transformation capital, private equity might align better with your needs than venture capital. PE firms bring operational expertise and industry connections that can accelerate your restructuring efforts.
Non-Dilutive Funding Alternatives
Strategic partnerships and corporate sponsorships provide capital without diluting your ownership. You can structure these arrangements where corporations fund specific projects or initiatives in exchange for preferred access to your technology or market insights.
Small business financing through loan guaranty programs offers another path. The SBA certified development companies administer the 504 Loan Program, providing long-term fixed-rate financing for major assets. This program helps you acquire equipment, real estate, or other capital-intensive assets without giving up equity.
Crowdfunding benefits extend beyond just raising money—you validate market demand while building a customer base. The loan application process for traditional debt remains an option, though you'll need to navigate federal state securities laws and demonstrate repayment capacity.
Regulatory Environment Shaping Modern Capital Raising Practices
The landscape of capital raising has transformed dramatically through regulatory modernization efforts, particularly those spearheaded by FINRA. You need to understand these changes because they directly impact how efficiently you can raise capital and what compliance requirements you'll face.
FINRA's Modernization Initiative
In 2017, FINRA issued Regulatory Notice 17-14 and Regulatory Notice 17-15, marking a pivotal shift in broker-dealer regulation. These notices introduced the Capital Acquisition Broker Committee (CAB) rule set and Funding Portal Rules, specifically designed to streamline the capital formation process while maintaining robust investor protections.
The CAB rule set addresses the unique characteristics of capital acquisition brokers—firms that exclusively facilitate capital raises without engaging in traditional brokerage activities. You'll find these rules particularly relevant if you're working with specialized fundraising intermediaries who focus solely on connecting companies with investors.
Streamlined Rules for Funding Portals
Funding Portal Rules created a regulatory framework for online platforms facilitating crowdfunding under the JOBS Act. These platforms operate under lighter regulatory requirements than traditional broker-dealers, making them an accessible option for early-stage companies seeking capital without the overhead of full broker-dealer engagement.
Proposed Amendments to Core Rules
FINRA has proposed amendments simplifying Rules 5110, 5130, and 5131, which govern underwriting arrangements and new issue allocations. These changes aim to:
- Reduce administrative burdens on broker-dealers participating in capital raises
- Clarify requirements for SEC filings related to public offerings
- Modernize restrictions on allocations of new issues to industry insiders
- Eliminate outdated provisions that no longer serve their intended purpose
The simplification of these rules means you'll encounter fewer procedural obstacles when working with underwriters. Broker-dealers can process your offering more efficiently, reducing both time-to-market and compliance costs. The amendments recognize that overly complex regulations can inadvertently discourage legitimate capital formation activities without providing commensurate benefits to investor protections.
Case Study Highlights from XPANCEO's Fundraising Journey
XPANCEO's $300M capital raise stands as a testament to what happens when visionary technology meets meticulous execution. The company's mission to develop AI-powered smart contact lenses that integrate XR computing capabilities required not just capital, but patient capital willing to support a multi-year development cycle.
Prototype Development and Testing Infrastructure
The Dubai lab became the epicenter of XPANCEO's innovation, equipped with $8M worth of specialized equipment designed to simulate human eye conditions. You need to understand that testing smart contact lenses presents unique challenges—these devices must function safely within the delicate environment of the human eye while delivering advanced computing capabilities.
The prototype testing process involved:
- Rigorous safety protocols ensuring all materials met biocompatibility standards
- Simulation chambers replicating various eye conditions and environmental factors
- Iterative design cycles spanning approximately 2 years per major prototype iteration
- Patent development protecting proprietary technology at each breakthrough stage
This infrastructure didn't just serve product development—it became a powerful demonstration tool for investors. When you can show tangible prototypes functioning in controlled environments that mirror real-world conditions, you transform abstract concepts into investable realities.
Building a World-Class Deep Tech Team
Co-founder Valentin spearheaded recruitment efforts that proved critical to securing the $300M raise. The numbers tell a compelling story: 77 out of approximately 100 employees work in R&D roles. This concentration of specialized talent sent a clear message to investors about XPANCEO's commitment to scientific excellence.
The recruitment strategy focused on:
- Identifying physicists with expertise in micro-optics and biocompatible materials
- Attracting engineers experienced in miniaturization and power management
- Building a team capable of bridging multiple disciplines—optics, computing, biology, and materials science
You can't fake this level of expertise. Investors conducting due diligence recognized that assembling such a specialized team required both significant resources and a compelling vision. The talent density became proof of concept in itself.
XPANCEO's detailed technology roadmap served as the backbone of their fundraising narrative. The roadmap didn't just outline product milestones—it mapped the convergence of science, finance, and product development across a realistic timeline.
This approach demonstrated:
- Open communication about technical challenges and realistic development timelines
- Patent strategy showing defensible intellectual property at each stage
- Partnership opportunities where strategic investors could contribute beyond capital
The co-founder partnership between business and technical leadership created confidence. Investors saw a team that understood both the scientific complexity and commercial realities of bringing revolutionary technology to market. (Learn more on talent acquisition consulting).
Lessons Learned and Best Practices for Entrepreneurs Raising Capital with Vision
Roman Axelrod's journey in raising $300M for XPANCEO offers actionable insights for entrepreneurs navigating the complex landscape of startup funding stages and venture capital rounds. The podcast episode on Raising Capital with Vision: $300M to See the Future reveals how strategic thinking combined with operational excellence creates compelling investment opportunities.
Align Your Fundraising Strategy with Long-Term Vision
You need more than ambitious goals to secure significant capital. XPANCEO's success demonstrates that investors respond to vision backed by concrete milestones. When you're learning methods raising capital, understand that your roadmap must connect today's achievements to tomorrow's breakthroughs. The company's detailed technology development timeline, spanning multiple years with specific deliverables, gave investors confidence in the feasibility of their ambitious smart contact lens project.
This alignment requires flexibility. You must demonstrate willingness to pivot when market conditions or technical discoveries demand course corrections. The benefits crowdfunding and traditional venture capital offer differ significantly, but both require you to show adaptability without compromising core mission objectives. Your ability to adjust tactics while maintaining strategic direction signals maturity that sophisticated investors value.
Create an Innovation Culture Through Balanced Incentives
The risks angel investments and venture capital rounds present extend beyond financial metrics. XPANCEO's approach to organizational transformation reveals a critical insight: monetary compensation alone won't attract the rare talent deep tech demands. You need to cultivate intrinsic motivation through meaningful work that challenges brilliant minds.
Roman's leadership mindset emphasizes creating an environment where physicists and engineers solve problems that push technological boundaries. This requires:
- Transparent communication about the company's mission and each team member's role in achieving it
- Autonomy in research and development processes that respects specialized expertise
- Recognition systems that celebrate intellectual breakthroughs alongside commercial milestones
- Resource allocation that demonstrates commitment to long-term research goals
When you're managing due diligence and fundraising techniques, remember that investors evaluate your team's quality and retention. A culture built on persistence, creativity, critical thinking, and imagination attracts talent that becomes a competitive advantage. These future skills matter more in deep tech than in traditional startups.
Your compensation structure should reflect this balance. Competitive salaries matter, but equity participation aligned with long-term success creates ownership mentality. Non-dilutive options like grants and competitions can supplement traditional funding while preserving equity for team members who drive innovation.
Conclusion
Raising capital with vision demands more than financial skills—it requires strategic planning, unwavering perseverance, and a commitment to long-term success. The podcast episode on Raising Capital with Vision: $300M to See the Future featuring guest Roman Axelrod, CEO at XPANCEO, demonstrates how deep tech startups can secure substantial funding through disciplined roadmap execution and clear financial performance measures.
You've explored various funding sources throughout this article, from traditional venture capital to alternative financing methods that preserve equity. Each option offers distinct advantages depending on your business growth path, control preferences, and capital needs. The key lies in matching your fundraising strategy to your company's unique requirements while staying compliant with evolving regulatory frameworks.
Entrepreneurship and innovation thrive when you:
- Align your vision with measurable milestones that demonstrate progress to investors
- Navigate complex investor relations with transparency and authenticity
- Execute your roadmap with discipline, adapting when market conditions demand flexibility
- Build funding strategies that support sustainable growth rather than short-term gains
The journey from concept to $300M raise isn't linear. You'll face setbacks, change your approach, and constantly improve your pitch. What separates successful capital raising from failed attempts is your ability to communicate how your innovation creates lasting impact across industries. Strategic capital raising powered by genuine vision transforms ambitious ideas into market-defining realities.
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