Thu, 31 August 2023
Flat-Rate Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Flat rate pricing is the simplest pricing model. There’s one price for the product or service no matter what features are included or how often the product is used. It acts similarly to the traditional software licensing model. It’s often used as a premium pricing model that includes everything the company has to offer. The advantage of flat-rate pricing is that it’s simple and easy to implement. The sales force can focus their effort on one priced product. The disadvantage is that one cannot segment the customer base to capture higher-value users. For simple products, the flat-rate pricing model works well. For complex products and a diverse customer base, it may be insufficient to capture the necessary revenue to grow the business.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 30 August 2023
Tiered Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Tiered pricing offers multiple price points for a product with varying levels of functionality or service. It is the most often used pricing model. The advantage of tiered pricing is as follows: It gives the user multiple options to choose from. The better the fit to the customer's budget the more likely the customer will sign up and retain. Captures more revenue from the customer because it fits their business better. This decreases the number of customers who would pay more for the product. Provides a growth path for users. Customers can upgrade as their need for the service grows. The drawbacks to tiered pricing are as follows: Too many choices will confuse the customer. Too broad of an offering may lack focus. Most tiered pricing solutions offer three choices.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 29 August 2023
Number of User-Based Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The number of user-based pricing sets the price based on users. This works for enterprise customers where there are a number of workers who need to access the platform. This makes it easy to forecast and budget the cost of the product. The downside is that the customer may end up paying for users that don’t use the product. For a number of users-based pricing, consider the following: This pricing disincentives the company to add more users to the system. It can increase churn as a customer with a larger number of users will have a higher churn rate than those with a smaller number of users. The product's value will vary from one user to the next without capturing revenue from the higher-value group. It opens the door for misuse as some customers may have their workers share logins to hide the number of users. Instead of pricing on a fixed user count, price on active users which provides a more accurate usage than seats.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 28 August 2023
Usage-based pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Usage-based pricing focuses on how much of the product or service the customer uses. The more the customer uses the product the greater the price they will pay. To apply usage-based pricing to your product, identify your value metric and then assign a price to it. Those using the service at a high volume may look for alternative solutions as the cost may grow too high. To increase the usage of the product, consider the following: Make it easy for customers to access and use. Make the pricing simple and transparent. Offer several levels of service to accommodate the small user as well as the large one. Offer a lower per-unit rate if the monthly usage goes above a threshold. Offer premium services to customers whose usage goes above the threshold. Usage pricing is a good way to price the product as the price to value is clear to the customer.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 25 August 2023
On this episode of Investor Connect, Hall welcomes Anthony Santaro (Venture Capital Associate) & Somak Chattopadhyay (Founder and managing Partner) at Armory Square Ventures. Located in Syracuse, New York, USA, Armory Square Ventures provides the first round of institutional capital for companies targeting the largest industries across New York State and select emerging cities across the Northeast. They are actively involved in all aspects of company growth—from recruiting senior talent, customers, and co-investors to providing general management support. Armory Square Ventures was launched in 2014 and they consider themselves fortunate to be backed by the region’s most respected institutions, corporations, and foundations. They recognize startups need far more than capital to survive, scale, and thrive. They help their startups elevate their operations to generate outsize returns. Somak Chattopadhyay has been operating and investing in early-stage startups in New York State and other emerging venture regions since 1999. Before launching ASV in 2014, he was a partner at Tribeca Venture Partners (formerly Greenhill SAVP, “Tribeca”), where he was instrumental in nearly every investment of its first fund and helped launch its second fund. As a venture capitalist at Edison Ventures, Somak sourced and evaluated investments in the tech-enabled service sectors managed deal flow referral networks, and identified emerging growth companies in under-venture-invested regions across the Northeast. Anthony is a member of the investment team at Armory Square Ventures. His responsibilities include sourcing new deals, analyzing potential opportunities, and supporting the firm’s portfolio companies. Prior to ASV, Anthony was an analyst at Wells Fargo's investment bank in New York City. He is also on the board of directors for the Young Citizens Committee for New York City, a non-profit that aids low-income New Yorkers in improving their neighborhoods. Anthony is a graduate of Johns Hopkins University. Somak highlights the parallels between venture capital and the hospitality industry, emphasizing the importance of providing exceptional experiences. Anthony shares his interest in marrying his venture capital experience with his family's history in the trucking space, highlighting the potential for innovative solutions in this area. Both guests share the significance of optimism in entrepreneurship and investing, and discuss the value of strong syndicates for supporting startups. Visit Armory Square Ventures at www.armorysv.com, and on www.linkedin.com/company/armory-square-ventures. Reach out to Somak at somak@armorysv.com, www.linkedin.com/in/somak-chattopadhyay-7662a, and Anthony at anthony@armorysv.com and www.linkedin.com/in/anthony-santaro-5b88ba109. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 25 August 2023
Value-Based Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Value-based pricing focuses on what value the customer derives from the product rather than the cost for the producer to build and deliver it. This pricing model focuses on how the customer perceives the product and what problem it solves for them. To apply value-based pricing to your product assess what price the customer is willing to pay for the product. Look for customer segments that will pay more for the product and focus there. To increase the value, consider the following: Make the product easy to use. Generate branding around the product. Create a herd effect in the market and highlight critical users of the product. Generate scarcity around the product. Increase customer service and support. In addition to adding value, these steps also help differentiate your product from the competition.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 24 August 2023
Promotional Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Promotional pricing gives your product an immediate sales boost. This is often used around holidays and special events. Offering a flash sale or a short time-only discount can generate some immediate revenue for your business. Holiday specials can also be used to spur additional sales. Typical examples include the following: Buy one get one free offer. Digital coupons to use on the next purchase. Flash sales which last only a few hours. Loyalty programs provide points to use for purchasing the product. Holiday offers such as Black Friday. To set your promotional price consider the incremental cost of sale to ensure you don’t discount below your product cost. Use promotional pricing sparingly as it impacts the brand. Too much discounting trains the customers to wait till the next promotion before buying.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 23 August 2023
Competitor-Based Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In pricing your product consider the competition. In well-established markets where the competition is entrenched, you may need to set the price in the same range as the competition. Review the competitors for their pricing structure. Take note of the price per unit and positioning of the competitors’ products in the market. Premium products set the upper bound for the price while value products set the lower limit. Competitors may be pricing to gain market share rather than revenue. You’ll need to take this into consideration as your strategy may differ from the competition. Look for ways to differentiate your product and thus charge a higher price. This could be better branding, more features, better partners or more. Consider the category you are in and ask if you could reposition your product to another category with a higher growth rate and a higher price. If using competitive pricing then you’ll need to monitor the competitors pricing quarterly to stay updated.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 22 August 2023
Good Better Best Pricing Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In pricing your product consider the Good, Better, Best model This model gives you three price points with which to cover the market. The Good price is set to capture the low end of the market. The key here is the core feature the customer wants and will pay for. For a product with many features, this may be difficult to determine. Choose the basic feature that the majority of customers want. For the Better priced product, include additional features that let you capture more users but the price is somewhat higher. For the Best priced product, include everything you have in the product to cover all users and use cases. The Good priced product should come in at or below your competition. The Best priced product should be priced high enough to signal it’s a premium buy. The Better priced product should be priced between the Good and Best price at the two-thirds point above the Good price. This pricing encourages users to move to the Best price as the price differential is small but the additional features are numerous. The Good Better Best pricing is an easy-to-use model for pricing your product.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 21 August 2023
How To Price a SaaS Product Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Pricing a SaaS product is different from a traditional product. A SaaS customer pays on a recurring basis such as every month or year. Since the customer is paying for a service for a period of time, then the price must reflect that usage. There are two pricing considerations in a recurring revenue model -- cost of customer acquisition and lifetime value. The price must be low enough to fit into the customer’s monthly or annual budget. The price must be high enough to deliver to the company a healthy lifetime revenue stream. Too low a price and the company won’t be able to grow because there's not enough revenue from the product to cover the cost of delivering the product. Leaving money on the table hurts the business as it will need the revenue to hire more salespeople and improve the product. Too high a price and the company will incur a higher cost of acquisition. To price your SaaS product, consider the following: Identify the value metric of your product or service. Review your cost of customer acquisition in unit economic terms from your initial cohorts. Look at the churn rate which is the rate customers are dropping out to estimate your lifetime value. If you lower your price, your cost of customer acquisition should go down. By making the product cheaper it should take less sales and marketing spend to close the sale. If it does not, then you should consider raising your price and check the impact on your churn rate. Finally, review the competition to see what others in the industry are doing.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 18 August 2023
On this episode of Investor Connect, Hall welcomes Tanika De Souza, CEO at High Octane Teams (HOT). HOT is an offshore staffing agency, focused on systemizing your process to streamline growth. It is focused on hiring Virtual International Staff to fit the client’s specific needs and company culture. Their VAs come in to not only handle the workload but to help clients systemize and document their processes. Their goal is to help them be more organized to reduce defect rates and increase productivity. Tanika started her first business in 2009 and grew it to over 100 employees. Her virtual staff is trained to create SOPs, systemize your business processes, and report KPIs for their department. She has extensive knowledge and expertise in hiring and managing teams. Tanika shares the transformative power of virtual international staffing in response to shifts in the US job market, with an emphasis on the intersection of AI and staffing processes. Tanika talks about the delicate balance between AI verification and applicant misrepresentation, highlighting the importance of candidates skilled in AI tools to remain valuable in the workforce. Tanika also explores the challenges and rewards of the staffing industry, revealing the potential to positively impact lives in various countries through remote work opportunities. Visit High Octane Teams at highoctane.team, and on www.linkedin.com/company/high-octane-teams. Reach out to Tanika at tanika@highoctaneteam.us, www.linkedin.com/in/tanika-de-souza-ma-99b902196. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 18 August 2023
Price Comes Before Product Development Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Most startups build a product and only then start a discussion with customers about how much they will pay for it. The pricing discussion should come before product development. In fact, the decision to build the product will depend on how much you can charge for the product. Before starting product development, create a one-page description of the product. List out the key features and benefits along with the price. Make several test mailings and in-person discussions to check what price the target customer is willing to pay. Vary the price from one test to the next and check the results. Never put a higher and lower price on the page and then ask which one to choose. The prospect will always choose the lower price. Instead, put one price on the page and then ask, would you buy it or not? In each test case, note which customers would pay a higher price and which would only pay a lower price. This will help you determine the buyer personas and how to price a good, better, best product offering.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Price_comes_before_product_development.mp3
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Thu, 17 August 2023
Calculating Your Value Metric Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Your value proposition is what the customer is buying from you. Stating it in unit economic terms is called your value metric. It could be storage space usage, transactions on a marketplace or other. Sometimes the metric is clearly assessed such as traffic driven to a website while at other times it can be difficult to pin down such driving revenue. For difficult situations choose a metric that comes closest to capturing it. In the revenue example, the number of customer visits could be used to track progress. Identify your value metric and assign a dollar amount to it. Now you can create a series of pricing levels for the customer. One pricing strategy is the good, better, best approach. This gives the user three options to choose from. If there are too many choices then the customer may find it difficult to decide. You can also price the product based on value metric usage. Assign a value to each unit and then charge based on the usage rate. Figure out your value proposition and define it in unit economic terms.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 16 August 2023
Identifying Your Customer Profiles Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Your value proposition is what the customer is buying from you which drives the pricing for your product. In setting the price for your product first segment your customers and identify their personas and how they will use the product. Figure out their key care-about and match them to the features of the product. This should be no more than three or four types. Define a pricing strategy that covers each persona. Take into account their budget and how much they can pay. Also, consider the cost of customer acquisition for each type. There may be customer personas who are too costly to acquire and satisfy with the product. Remove these from your target customer persona list. The more you know about your customers the more accurately you can define your pricing.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 15 August 2023
Pricing Based on Strategy Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Your product strategy drives your pricing model. There are three strategies to consider which are driving revenue growth, gaining market share, or driving profits. For startups raising funding, driving revenue growth is the best strategy as investors want to see traction and growth. Regardless of the competition or the state of the product, the startup should put revenue growth first. Take all sales opportunities to maximize revenue. For startups not raising funding but looking to win market share, start with a low price and then increase it with premium features or by usage. Look for opportunities left open by the competition for your sales efforts. For startups looking for profitability, start with a small number of customers that will pay a higher price. As you grow the business you can look for additional profitable business opportunities that allow for premium pricing. Avoid low-margin products by letting other companies provide them. You can use partners to complete the solution for the customer if necessary. Set your business strategy before setting your pricing strategy.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 14 August 2023
Bad Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Not all revenue is the same. In fact, some revenue is bad revenue. Bad revenue comes from products that are underpriced. Without enough revenue to cover the costs of delivering the product, the company struggles. Customers become unhappy when they fail to receive the expected product or service. If done over a long timeframe, the company suffers from employee burnout. Some companies overcompensate for this by hiring more employees which decreases profitability. Good revenue ensures there’s enough funding to cover the cost of delivering the product or service and help grow the company. Be wary of offering large discounts as this is one of the most common ways to turn good revenue into bad revenue. Make sure the price you charge covers the cost of delivering the product or service.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 11 August 2023
On this episode of Investor Connect, Hall welcomes Erwin Jager, Founder and CEO at Wreckdock Vessel Recycling. Located in Dubai, Saudi Arabia, Wreckdock is an innovative offshore recycling company that completely dismantles seagoing vessels. Wreckdock collects, processes, and recycles all released materials and resells them to international market parties. Wreckdock includes the trade and supply of steel products, financial buying and selling operations and international trade in ferrous and non-ferrous metals and oil. Wreckdock is developing a new sustainable facility including a complete employee compound based in Saudi Arabia. Erwin Jager is committed to reversing waste in the maritime industry, generating jobs, and strengthening the local economy in the Kingdom of Saudi Arabia. The new maritime recycling facility is set to launch in 2025, with the potential to transform the industry's approach to ship recycling and dismantle sustainably. Under his leadership, the company has the mission to become one of the most respected and successful ship recycling companies in the Middle East and Asia.
Erwin talks about his background, how he transitioned to vessel recycling, the opportunities he sees in the market, and the reasons behind establishing the company's operations in Saudi Arabia and Iraq. Erwin underlines the environmental significance of vessel recycling and the potential for growth in this industry.
Visit Wreckdock Vessel Recycling at http://www.wreckdock.com, and on www.linkedin.com/company/wreckdock Reach out to Erwin at erwin@wreckdock.com, and on www.linkedin.com/in/e-r-w-i-n-j-a-g-e-r-2-0-2-3-.
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 11 August 2023
Contribution Margin vs. Gross Margin Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The contribution margin is the same as the gross margin but without the fixed costs included. It includes only direct costs and variable costs. This means the contribution margin will always be the same or higher than the gross margin. The contribution margin is used for setting the selling price of a product and determining the profitability of the product. Fixed costs are considered sunk costs and should not be used in the calculation of product prices. Contribution margin can be used to understand the profitability of each product as it eliminates non-direct costs from the equation. The profits from the contribution margin calculation can be applied to the company’s overhead. Consider using contribution margin in your pricing and product performance calculations.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 10 August 2023
Gross Margin Is the Comparator Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Since not all revenue is the same, how does an investor compare one company to another? Gross margin is one key comparator. It measures how much revenue is available to invest in the growth of the business. Gross profit is calculated by taking revenue minus the cost of goods sold. Gross margin is calculated by taking gross profit divided by revenue. The higher the gross margin the more capital efficient the business. This means the company can go further with less funding. Companies vary in their gross margin. Some have very efficient product delivery models while others have high-cost models. While not all revenue is the same, gross margin predicts funds available for future growth. Consider the gross margin in your investment analysis of a business.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 9 August 2023
More Characteristics of Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Not all revenue is the same. There are several characteristics that define the quality of revenue. Here’s an additional list to consider: Repeatable -- if the revenue is not recurring but rather repeatable then it has a greater value than the revenue that is a one-time event. Strategic -- if the revenue comes from a strategic source rather than a tactical source it will most likely provide greater value to the business in the long run. Product/Market fit -- if the revenue comes from a source of strong product/market fit it will have greater value than revenue that comes from a weak product/market fit. Long-term value -- if the revenue comes from a strategic channel then it will have greater value than if it comes from an opportunistic channel. Look for these characteristics to understand the quality of your revenue.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 8 August 2023
Characteristics of Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Not all revenue is the same. There are several characteristics that define the quality of revenue. Here’s a list to consider: Predictability -- if the revenue is recurring it has higher predictability and thus a greater value. Concentration -- the more sources you have the stronger the revenue as you avoid over-concentration of customers. Diversity -- the greater the number of use cases for the product drives diversity which provides greater value as your revenue is not at risk of changes in the market. Contracts -- having contracts gives greater value to the revenue as it strengthens the predictability of it. Customer solvency-- revenue from a customer that is profitable has greater value as it increases the chance that it will continue. Look for these characteristics to understand the quality of your revenue.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 7 August 2023
Marginal Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Marginal revenue is the revenue for each additional unit sold. The additional unit comes with a marginal cost which is the additional cost on that unit. As the startup scales costs will rise and at some point, the marginal cost per unit will increase. Startups should raise their prices as they grow so the marginal revenue stays ahead of the marginal cost. By adding more features to the software platform or expanding the product to have more benefits, the product should command a higher price. You calculate marginal revenue by taking the change in revenue divided by the change in quantity. Change in revenue is calculated by taking the total revenue and subtracting the last unit sale revenue. Marginal revenue and marginal cost are good indicators for predicting the direction of profit. For startups, this helps determine your cash runway.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 4 August 2023
On this episode of Investor Connect, Hall welcomes Dr. Chris Apfel, Founder, CEO, & Chairman of the Board at SageMedic Corp. Located in Palo Alto, CA, USA, SageMedic Corp. (SAGE) is a cancer diagnostic company that brings precision medicine to the next level by overcoming the limitations of genomic testing. Specifically, because only 1 out of 4 patients have genomic mutations, in most cases oncologists don’t have the tools to predict which therapy, if any, is likely to work for an individual patient. Hence, SAGE has developed the SAGE Oncotest™, a proprietary patent-protected ex-vivo, high-throughput 3D assay that predicts a patient’s tumor response to traditional chemotherapies and targeted therapies, independently of any potential genetic mutations, and that within just 1 week. With only $4.0M of funding SAGE has been able to develop this assay and is now a registered California lab that has very recently become fully accredited according to the Clinical Laboratory Improvement Amendments (CLIA) by the Commission on Office Laboratory Accreditation (COLA) and Center for Medicare and Medicaid Services (CMS), hence at the verge of starting commercialization to generate early revenue and clinical case studies. Dr. Chris Apfel is an impact investor, and the Chair of the Life Sciences at the Northern California chapters of the Keiretsu Forum. He has led numerous due diligence efforts and has since made over 20+ investments in life science companies including Mission Bio, CorInnova, Pathware, Raydiant Oximetry, etc. Before that, Dr. Apfel was an Executive Director of Cadence, where his health economic research on a non-reimbursable drug showed a $500 per patient cost savings after which Cadence was acquired for $1.3 billion by Mallinckrodt. Before he moved into the industry, he was a practicing clinician and professor at the University of California San Francisco (UCSF) with over 100 publications that have been cited over 20,000 times in the literature. Dr. Apfel received his MD/PhD from the University of Giessen, Germany, and his MBA from The Wharton School of Business, University of Pennsylvania, PA. Dr. Chris shares the need for a strong and experienced team and game-changing technology, while also acknowledging the regulatory challenges in the life science space. He shares his belief that successful FDA approval can lead to high rewards and discusses the significance of reproducibility in academic research and the importance of forming independent opinions when evaluating startup opportunities. Visit SageMedic Corp at www.sagemedic.com, and on www.linkedin.com/company/sagemedic. Reach out to Dr. Chris at capfel@sagemedic.com , and on www.linkedin.com/in/chrisapfel.
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 4 August 2023
Operating Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Operating revenue is revenue from the core business. Non-operating revenue is revenue that comes from other sources. For example, if the company sells a service, that revenue is considered operating revenue. If the company sells a piece of furniture, that revenue is considered non-operating revenue. By separating the operating from the non-operating revenue the financial metrics will be more accurate. Operating revenue is calculated as the gross revenue minus variable costs of goods sold. Net operating revenue is the operating revenue that takes out the operating expenses. Investors often look for the revenue that represents the core business. Operating revenue is a good way to present it.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 3 August 2023
Accrued Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Accrued revenue is revenue that has been earned but has not yet been paid for. This could be project work that is billed when completed. The unpaid balance for the work done is considered accrued revenue. This applies to project work as well as loans in which the interest income is considered accrued revenue. Revenue should be recognized in the accounting period in which it occurred. Accrued revenue is considered an asset on the balance sheet. The opposite of accrued revenue is deferred revenue in which you receive payment in advance of providing the service. It’s considered unearned revenue and is posted as a liability on the balance sheet. Work with your bookkeeper to capture this information into your accounting system.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 2 August 2023
Unearned Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. SaaS businesses charge a subscription fee for the product on a monthly or annual basis. For those charging on an annual basis, the revenue generated at the beginning of the contract is considered unearned revenue. Unearned revenue is revenue received before the service actually occurs. The unearned revenue is not an asset, but rather a liability until it is earned. It must be reported in the balance sheet as a liability. As the revenue is earned, you must move it out of the unearned revenue account credit. This is typically done on a monthly basis. In running a SaaS business it’s important to understand when to recognize revenue and how to account for it in the financial statements. Contact your accountant to help set up your books properly at the start of the business.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 1 August 2023
Components of Revenue Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Revenue or sales stands for the amount of funds a company earns. This comes from the goods or services the company sells. This is often called Gross Sales or Total Sales as it’s the total amount of the proceeds. Net sales are the gross sales minus any returns, discounts, or other price reductions offered to customers such as rebates. The cost of goods sold is the cost to produce the goods or services. In a consumer product goods company, it’s the cost to build the product. In a SaaS business, it includes the cost of servers and software used to provide the service. Gross margin is the Net Sales minus the cost of goods sold. Gross margin percent is calculated as gross margin over total sales. This is a key factor for many investors as it represents the amount of funds you have available for sales and marketing. The higher the gross margin, the greater the capability of the company to sell it. Finally, there’s the cost of sales. These are the costs directly related to selling the product such as commissions. It’s important to understand these elements in calculating your sales and presenting them to investors.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
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