Tue, 2 June 2020
Investor Connect is proud to introduce a brand new Podcast series: Investor Perspectives. Over the next month, we continue our discussion on the Impact of the COVID-19 Economy on Startup Funding with experienced investors from the TEN Capital network. In today’s installment, we’re focusing on what our investors are doing to prepare for the market after the lockdown. Today’s episode features insights from: Ash Kaluarachchi of StartEd & EdTech Week We hope you enjoy listening to this informative new series. For more episodes from Investor Connect, please visit the site at: http://investorconnect.org
Direct download: Investor_Perspectives_Impact_of_the_COVID-19_Economy_on_Startup_Funding_Part_2A.mp3
Category: -- posted at: 11:12am CST |
Tue, 2 June 2020
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. When a Venture Capitalist makes an investment, they place a portion of their allocated investment upfront in the first round and save the rest for a follow-on round. Most VCs put criteria on the startup’s progress before joining the follow on round. This means the startup must achieve milestones such as revenue generated to get the follow-on funding. VCs have some of their funds invested in startups, some reserved for follow-on rounds on those startups, and some funds that are available for new startups. The funds for new startups are referred to as dry powder. This is the number you need to know before pursuing a fund because you could spend your time selling to an investor that has no money to invest. The last thing an entrepreneur wants to hear from an investor is, “That’s great, we’ll call you when we raise our next round of funding.”
Direct download: EG_Mar_2020_Startup_Funding_Espresso_--_Funds_held_in_Reserve.mp3
Category: -- posted at: 7:58am CST |
Tue, 2 June 2020
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Both angels and venture capitalists often invest in syndicates. In a syndicate, one of the investors leads the round and the other investors follow. Sometimes the syndicate is a formal group in which the lead investor receives compensation from other investors who join the round. Angel investors often join syndicates in which they pay a portion of their carry to the lead investor for organizing the deal. Other times, the syndicate is informal with investors sharing deals with each other for no compensation. VCs also syndicate deals with each other to help fill out the round as a way of attracting the better deals. They bring not only their own funding but can also attract additional capital.
Direct download: EG_Mar_2020_Startup_Funding_Espresso_-_Syndicates_and_Syndication.mp3
Category: -- posted at: 7:52am CST |
Tue, 2 June 2020
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. A venture fund brings a fiduciary responsibility to those raising the funds from limited partners. A fiduciary means the VC must act in the best interest of the investors. VCs who sit on the boards of their portfolio companies also have a fiduciary duty to that company. There are times when the two fiduciaries come into conflict. It’s best to have your duties to the investors stated in the PPM such as liquidation preferences, preferred shareholder treatment, etc. The VC must appear to be following a fair treatment of both parties and may need to engage in negotiations to resolve conflicts. VCs often use incentives such as offering additional equity to either the startup or the fund’s investors to resolve that conflict. For example, the investors may want to see an exit sooner rather than later. The startup founders want to wait to potentially gain a bigger exit. The VC can offer additional equity to the founders if they agree to an exit now.
Direct download: EG_Mar_2020_Startup_Funding_Espresso_--_Fiduciaries.mp3
Category: -- posted at: 7:47am CST |