In this episode, Hall welcomes Yigit Ihlamur of Vela Partners. Vela Partners is an investment firm, composed of five partners supported by technology, commercial and legal advisors. Their main focus is software companies, with investments spanning from angel to VC stages.

Before Vela, Yigit Ihlamur worked in Google’s Cloud division, at the company’s headquarters in Mountain View, on product strategy, management, and startup partnerships. Yigit’s tenure at Google also included several years spent in the company’s European headquarters in Dublin, where he was initiated into European business and technology working on technical operations for G Suite.

In this episode, Yigit shares his advice to first-time investors in startups, in particular in the machine learning and data sector. According to Yigit, see as many companies as you can. It’s easy to get excited about a good story and dream of what can happen. Visit with at least twenty to thirty companies before deciding so you can benchmark those companies.

Who should have access to the cap table in a startup?

The Cap Table which shows the ownership of each investor and those from the company is reserved for investors, board members, the CFO, and the corporate attorneys.

For employees, you want to create a culture of openness.

Employees and other shareholders get visibility into their ownership but in general they cannot see the ownership of others.

You want to discourage employees buying/selling shares with each other or investors as they should receive liquidity with everyone else.

On another note, what is a down round?

A down round is when a startup accepts an equity investment at a valuation lower than the previous established valuation.

This comes from raising too much capital at too high of a valuation previously.

Those who have a burn rate that is too high or have pivoted to a new business model may be subject to down rounds.

This hurts previous investors, founders, and employees whose options are now worth less.

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!