In this episode, Hall welcomes Geraldo Melzer of A.B.Seed Ventures. A.B.Seed Ventures focuses on investing in startups that seek seed investment, with a SaaS B2B business model. Their proposal goes beyond capital and network. They support entrepreneurs with the best SaaS marketing and sales practices in areas such as inbound marketing, inside sales, channels and customer success.

In this episode, Hall and Geraldo talk about the quickly growing Brazilian market. According to Geraldo, in 2010 the investment was about 10 million dollars and in 2019 was up to 2.5 billion in venture capital. Latin America, specifically Brazil, is waking up for VC investment and the market is maturing.

Geraldo also shares his advice to investors before writing their first check. If you have uncertainty around the environment, the sector, the segment, and the business model that the company is working on, your capacity to evaluate, analyze, and help will be minimal. So Geraldo suggests investing in something that you can study. This will help you form educated opinions and mitigate the risk.

In looking at cap tables, there are several red flags to watch out for.
Look for shares that are actually issued and not just verbally promised.
Is the cap table up to date with cancellations and repurchases? Many startups consider their cap table to be a work in progress so don’t be surprised if it contains “what ifs” and other “redos.”
The cap table is typically available in three versions:
First: The capitalization as it currently exists,
Second: The capitalization of the business as a fully-diluted version including any options, warrants, contracts, convertible debt, that could become shares,
Third: A proposed version including new employees, pending lawsuit settlements, or planned raises.
Check to see if there’s an attorney behind the scenes who is following up on the details as the management team is generally distracted by sales, development, and other issues.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today!