Should You Pitch to Your Employer for Capital or Not?

August 11, 2017

7:15 am

You or you and a small team have a powerful idea and become convinced it can launch a successful new enterprise. It is in related industry, but different markets than the one your current employer competes. Your team develops a business plan in off-hours, and becomes highly energized by the possibilities.

At some point in the process, you have an important choice to make: should you propose the idea to leadership at your company or just go out on your own? That is exactly the situation my startup team faced as we completed our initial business plan for an Emergency Medical Services (EMS) Equipment business. Three of the factors we considered in our decision were: legal or ethical obligations, company climate, and our standing in the company

Our employer, Stryker, did not compete in the EMS market. Stryker’s various divisions sold products to hospitals. EMS was a pre-hospital business. While there were ties at the customer level, less than 10 percent of EMS services were hospital owned. Stryker’s marketing team had investigated EMS in the past and decided to pass. We thought that analysis lacked imagination.

Uncertain if we had an obligation to discuss a much more creative plan with internal management, we did feel that giving Stryker a first-refusal type of opportunity would head off any potential legal battles. If the company had the chance and passed again, they would have little recourse in the future.

You need to ask yourself and cofounders if the atmosphere of your current company will allow you to do what is needed. Stryker’s company climate was extraordinary, including an intoxicating level empowerment. Developing an independent brand with its own color schemes and core message was not out of the question.

Nonetheless, there was a hierarchy in place, and we were clearly operating on the tattered fringes or outside of it when writing our plan. We felt it was a long shot that Stryker would approve. But, it was a growth-oriented company that frequently looked to expand its product offerings. There was a pervasive ideology of focus through decentralization. They might just give us the essential flexibility.

Our team’s standing in the company was also a consideration. Two members were relatively new which meant they had little to risk. The company would not lament too long over their loss if they went out on their own. I was the senior person, but had only been with the company for about three years. I was just promoted to Director and was building a reputation as a leader. We felt our standing gave us enough credibility to propose something internally, but not so much that the company would be overly concerned about losing, or firing, us. The ideas would have to stand on their own merits.

In the end, we decided that the best route was to propose our plan to the company. To our surprise, leaders up the chain were enthused. The plan required special funding and support, and our internal efforts culminated in a presentation to the CEO and CFO. The bet on Stryker’s corporate climate paid off as the CEO’s first remarks were, “This is the type of activity we want to have happening in all the divisions.” He made it clear that entrepreneurial efforts should be applauded and thanked the team for the work they had done. We were asking for $2 million in extra funding that year, and he essentially agreed to $1 million. We were off and running.

Read more about raising capital at TechCo

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Gary Morton was the General Manager and Cofounder of Stryker’s highly innovative EMS Equipment business that redefined patient handling in the pre-hospital market. His new book, Commanding Excellence: Inspiring Purpose, Passion, and Ingenuity through Leadership That Matters, will be in print on September 5, 2017 and is available for pre-order today on Amazon, Barnes and Noble, BooksaMillion, Indiebound, and 800 CEO Read (for bulk orders) along with other fine booksellers. For more information, visit

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