Is That Deductible? My Experience at the America’s Seed Fund Road Tour

Navigating the labyrinthine world of funding for a start-up is no small feat. As the founder of ChatMD and our software medical devise (SaMD) ChatRx, I am venturing into the SaaS start-up world in the health tech sector. Recently had the opportunity to attend the America’s Seed Fund Road Tour in Indianapolis.

America's Seed Fund Road Tour is a national outreach effort organized by the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These programs are often referred to as "America's Seed Fund" because they provide early-stage funding to small businesses and startups working on innovative technologies. The road tour aims to connect entrepreneurs, small business owners, and researchers with program managers from various federal agencies that participate in the SBIR/STTR programs.

It was an enlightening experience, albeit overwhelming at times, akin to drinking from a fire hose. This blog post aims to share my journey through the funding process for my start-up medical device ChatRx, the invaluable connections I made, and how this event intersected with my deductible business expenses.

The Funding Landscape: Drinking from a Fire Hose

Attending the America’s Seed Fund Road Tour was an eye-opener. The event exposed me to a plethora of non-dilutive government funding options as my company transitions from pre-seed to seed-based funding and development. Non-dilutive funding, which includes grants and contracts that do not require giving up equity, is a goldmine for start-ups looking to retain control while securing necessary funds.

At the event, I engaged in one-on-one discussions with representatives from the US Navy, Department of Defense (DoD), Health and Human Services (HHS), and the National Academy of Sciences. Each conversation was a deep dive into the specifics of various funding opportunities, making me realize the vast sea of resources available to health tech start-ups like ChatRx. The sheer volume of information was staggering, but each interaction provided crucial insights into how to navigate the funding landscape.

Connections and Support: Indiana Economic Development Corporation

One of the most significant takeaways from the event was connecting with navigators from the Indiana Economic Development Corporation (IEDC). The IEDC’s enthusiasm for supporting health tech ventures was palpable. They offered guidance on leveraging state resources to fuel our growth and provided a network of contacts that could prove invaluable as ChatRx moves forward.

These connections underscored the importance of networking and mentorship in the start-up ecosystem. Having a dedicated support system, especially from entities like the IEDC, can accelerate a start-up’s journey from concept to commercialization.

The Start-Up Experience: A Fish Out of Water

As a physician and president of SimpliMD, attending the America’s Seed Fund Road Tour was a stark departure from my usual environment. Instead of the familiar confines of a hospital or clinic, I found myself in an auditorium filled with start-up founders, business professionals, and vendors. The atmosphere was electric, buzzing with innovation and entrepreneurial spirit.

However, I often felt like a fish out of water. The language of start-ups, peppered with acronyms and industry-specific jargon, was foreign to me. Each presentation and conversation required careful interpretation, much like diagnosing a complex medical case. This experience highlighted the steep learning curve associated with transitioning from a clinical to a business environment.

The Deductible Journey: Expenses and Overheads

One of the critical aspects of attending such events is understanding which expenses are deductible. As ChatRx evolves, managing finances and optimizing tax benefits becomes paramount. Here’s a breakdown of deductible expenses from my experience at the America’s Seed Fund Road Tour:

1. Travel Expenses

The two-hour drive to Indianapolis (and back) in my company vehicle is deductible. The IRS allows deductions for business-related travel, including mileage, tolls, and parking fees. Keeping a detailed log of these expenses is essential for accurate reporting.

2. Event Registration Costs

The registration fee for the America’s Seed Fund Road Tour is deductible as a business expense. Such events are considered necessary for professional development and networking, both critical components of growing a start-up.

3. Meals

Meals consumed during business travel are deductible, albeit at 50% of the total cost. It’s important to keep receipts and note the business purpose of each meal to ensure compliance with IRS regulations.

4. Business Overheads

All tech-related business overheads, including software subscriptions, hardware purchases, and internet costs, are deductible. These expenses are vital for maintaining the operational efficiency of a tech start-up like ChatRx.

Fortunately, I have a business development corporation in my business enterprise ecosystem and can channel the business expenses through this company until I have ChatMD formally set up to conduct business independently—which will happen soon.

Commitment to Learning and Growth

Despite feeling out of my element, the experience at the America’s Seed Fund Road Tour reinforced my commitment to learning and growth. Navigating the start-up world requires a different skill set than practicing medicine, but the principles of perseverance, continuous learning, and adaptability remain the same.

Key Takeaways

1. Embrace the Learning Curve

Transitioning from a clinical to a business environment is challenging but rewarding. Embrace the learning curve and seek out resources and mentors to guide you.

2. Network Relentlessly

Building a robust network is crucial for start-up success. Attend events, connect with industry professionals, and leverage state and local resources like the IEDC.

3. Understand Your Financials

A firm grasp of your financials, including deductible expenses, can significantly impact your start-up’s bottom line. Invest time in learning about tax benefits and optimizing your expenses.

4. Stay Committed

The start-up journey is fraught with challenges, but staying committed to your vision and mission will see you through the toughest times.

Conclusion

Attending the America’s Seed Fund Road Tour was an enlightening experience that broadened my understanding of the funding landscape for health tech start-ups. The connections made and knowledge gained will undoubtedly propel ChatRx forward. While the experience was different from my usual clinical setting, it was a valuable step in my entrepreneurial journey. Understanding the nuances of deductible expenses will ensure that ChatRx remains financially healthy as we navigate the road ahead.

For fellow physicians considering the transition to entrepreneurship, I encourage you to step out of your comfort zone, embrace the learning opportunities, and stay committed to your vision. The road may be challenging, but the rewards of building something impactful are well worth the effort. You easiest first step to ease into the world of entrepreneurship is to incorporate yourself and begin using your business entity in the marketplace. Check out my free e-book “Why Every Employed Physician Should Form Their Own Micro-Corporation”

If you're a physician looking to start your own micro-corporation, consider becoming a SimpliMD member. Join our community to gain access to $2500 in valuable resources and support. Ready to take the leap into micro-incorporation of your professional life? Sign up for guidance from me and let's build your professional micro-corporation together.