Risks and Assumptions

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In diligencing a startup, it’s important to articulate the risks and the assumptions you have about the startup.

Start by identifying the risks in the deal.

The team, product, market, technology, and competition are key sources of risk. 

List out each one and what risks the company faces. Prioritize the most important at the top and list in descending order.

Write out the assumptions you are making about the deal. 

I find new information often comes to light through the due diligence process, so it’s important to track what you believe to be true about the deal.

Articulate the investment thesis for how this will become a successful investment and not just a successful company.

Writing out the investment thesis forces you to think it through more carefully.

Seeing it written out gives you a sanity check.

For the investment thesis, estimate the potential size of the company, the probability of success, and the return that can be achieved.

Will this become a billion-dollar company or just a few million dollars?

Are there a handful of competitors in the market or thousands?

Are the buyouts in the space in 9-figure exits, 8-figure exits, or less?

Writing out the risks and assumptions will help you gain a better understanding of the deal.


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.
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On this episode of Investor Connect, Hall welcomes Stefano Gurciullo, Partner at Redstone VC.

Redstone is a Berlin-based venture capital firm managing multiple VC funds and working with corporate venture funds. They reinvented corporate venture capital through their VC-as-a-Service model, which connects industry leaders with ambitious founders.

Together with their industry partners, they activate corporate capital, knowledge, and network to support their entrepreneurs in growing their businesses. In addition to their investment service, they provide tailored intelligence that empowers partners to make better-informed strategic decisions and stay informed about future digital trends.

Redstone is run by experienced entrepreneurs and investors with deep roots in the German and European technology ecosystem. Their founding partners have built and advised some of Europe's largest technology companies over the last two decades.

Stefano leads the Future Industry Ventures, the firm’s industrial technology and sustainability fund. He invests in European entrepreneurs building solutions making manufacturing more energy-efficient, more secure, and decarbonised. Prior to Redstone, Stefano held various positions as a data scientist and investor in sustainable finance. He has also consulted public institutions such as the European Commission, UNDP, and EU Climate KIC at the intersection of technology and climate. Stefano holds a Ph.D. in Financial Computing from University College London, where, as a complex systems scientist, he worked on the use of data to understand and prevent financial and climate-related economic shocks. 

Stefano shares with Hall what excites him now and advises startups and investors. He discusses the state of startup investing and the biggest change he thinks we will see in the next 12-24 months.

You can visit Redstone VC at https://redstone.vc/, on LinkedIn at www.linkedin.com/company/redstone-venture-capital/, and on Twitter at www.twitter.com/redstonevc.

Stefano can be contacted at stefano@redstone.vc, on LinkedIn at www.linkedin.com/in/etste/, and on Twitter at www.twitter.com/etste. 

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For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.