Terrafugia was founded by graduates of the Department of Aeronautics and Astronautics at the Massachusetts Institute of Technology and graduates of the MIT Sloan School of Management. Their team and business plan was the runner-up for the 2006 MIT $100K Entrepreneurship Competition. Terrafugia was then incorporated May 1, 2006, with much of the initial funding coming from CEO and founder Carl Dietrich's US$30,000 Lemelson-MIT Student Prize. The first round of convertible note financing began at EAA AirVenture Oshkosh 2006 and closed December 21, 2006, raising US$258,215. Five additional rounds of convertible note financing followed. The first round of equity financing closed in 2008 and raised US$1,531,323. Another round of equity financing was initially planned for 2009; the second and third rounds of equity financing raised US$2,037,680 in May, 2010 and US$960,418 in Dec, 2010. Another equity offering of US$3.5 million was reported in May, 2012 of which $1,020,369 had been sold. In October 2008, Terrafugia reported seeking reservations for airframe number 57 representing an order book of more than US$8 million. In March 2009, the company had received fewer than 35 aircraft reservations, but by September 2009, they had doubled that to 70; , 100 reservations were on deposit representing potential revenues above US$25 million.