Good vs Bad Answers to Questions

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

In fundraising the investor will ask the startup many questions.

The investor is often limited in their time and must go through a series of questions quickly.

It’s best to answer the question directly and only the question asked.

It’s not a good idea to give the full story to every question as that takes time and limits the number of questions the investor can ask.

Use the PREP model in answering investors questions.

PREP stands for Point, Reason, Example, and Point

Here’s an example:

Point:  Our startup is the first to market with a product to solve the throughput problem in data analytics.

Reason:  We have a superior team that has been working on this problem for five years.

Example:  Our algorithm increases data throughput by a factor of 10X.

Point:  We’re able to provide answers to queries at an order of magnitude faster than the competition.

This answers the question directly and provides not only the answer but why it’s valuable. 

Consider using the PREP model in your pitch to investors. 

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.

_______________________________________________________

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

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On this episode of Investor Connect, Hall welcomes Dr. Ronald Berenson, CEO of KitoTech Medical. Located in Seattle, Washington, KitoTech Medical specializes in developing innovative solutions for chronic pain management and wound care. The company has created a transformative technology based on micro-point devices approved for clinical use that not only addresses chronic pain but also offers effective wound closure options. With the current market opportunity expanding, KitoTech Medical is raising $3 million in a convertible note to further drive commercialization and scale production.

Dr. Ronald Berenson is a Yale and Stanford-trained medical oncologist with extensive experience in healthcare entrepreneurship. He has founded several successful biotech and medical device companies, many of which have gone public on NASDAQ. After serving as an entrepreneur in residence at the University of Washington, Dr. Berenson leveraged his medical expertise to develop KitoTech Medical's pioneering product, which has shown promising results in treating chronic pain—a prevalent medical issue affecting millions. His commitment to clinical trials and thorough testing underscores the efficacy of KitoTech’s products in providing pain relief.

In this episode, Dr. Berenson discusses the innovative technology behind KitoTech Medical's micro-point devices, particularly their dual use in wound closure and chronic pain management. He emphasizes the product's unique ability to provide long-lasting pain relief without the side effects associated with traditional pharmaceuticals, making it a viable option for consumers. Dr. Berenson also shares insights into the marketing strategy and partnerships essential for driving growth, aiming to capture a significant share of the estimated $600 billion chronic pain management market in the U.S.

Visit KitoTech Medical at https://www.micromendskinclosure.com/, LinkedIn, and on Twitter. Reach out to Dr. Ronald Berenson at www.linkedin.com/in/ronaldberenson and on Twitter.

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.

_______________________________________________________

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/ 
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How To Answer Questions Using Synthesis

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

Synthesis can help in answering questions.

Here are some key steps to answer questions:

First, understand the question.

If you don’t understand it, ask for clarification.

Try paraphrasing what was asked to ensure you understand the question.

Determine what form the answer will take.

For example, if the question starts with “How many”, then the answer will be a number

If the question starts with “Why”, then the answer will be a reason starting with “because”.

If you don’t know the answer, then admit to the limitations of your knowledge and give what information you can.

When you finish answering the question, then stop and wait for the next question.

Don’t start your answer until the question is completed.

In fundraising, keep your answers short and to the point.

Avoid telling a story for every question as this form takes a great deal of time.

If an investor asks how much revenue you have, then give the number, $10K MRR, $100K since inception, or we are pre-revenue.

Don’t tell the story about how you started the business. 

Synthesis helps you tune your answers to the questions asked.

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.

_______________________________________________________

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/ 
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What Are Critical Thinking Skills?

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

Critical thinking understands the connection between multiple ideas and concepts.

In building a pitch deck a founder needs critical thinking skills to create a logical flow throughout the pitch that highlights the main points to the investor.

Here are some key critical thinking skills to employ:

Ability to consider different viewpoints and see the business from other perspectives.

Ability to create a solid argument based on evidence.

Ability to draw logical conclusions from the evidence to make the case for the startup.

Ability to separate fact from fiction which creates a well grounded startup premise.

Ability to analyze the thinking process to find the flaws.

Consider applying these skills to your startup pitch:

Avoid bias in the pitch such as leaning to the technical side rather than the business side.

Apply solid research to your startup pitch rather than guesstimates.

Identify the problem you are solving not only on the surface but also other factors that influence the problem.

Approach the market with curiosity to learn more.

Consider the relevance of information by how it helps to make your case or detracts from it.

Apply these critical thinking skills to your pitch deck presentation.

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.

_______________________________________________________

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/ 
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What Is Critical Thinking?

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

Critical thinking is defined as the objective analysis and evaluation of an issue in order to form a judgment.

It’s a skill that determines what is true or false.  

It involves cognitive biases and logical fallacies.

Cognitive biases cause a bad decision when one thinks it is a good one.

Logical fallacies sound true but are in fact false.

Startup founders should practice critical thinking skills in developing their startup as it will help avoid mistakes.

Critical thinking helps you make better decisions.

It makes your proposal and pitch to investors more compelling.

Critical thinking is based on evidence.

The investor will review your pitch based on the evidence provided.

Solid evidence and logical conclusions will help convince the investor your startup will succeed and should be funded.

The goal of any startup pitch is to convince the investor that your startup will succeed with or without the investor.

Investors support those startups because the success is assured and does not rely upon the investor to provide heroic actions to achieve it.

Consider applying critical thinking skills to your pitch deck before presenting to investors. 

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.

_______________________________________________________

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

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For Investors check out: https://tencapital.group/investor-landing/ 
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How To Use Market Research With Investors

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

Market research not only informs the founder about the industry and how to build a startup.

It also informs the investor about making an investment into that startup.

Market research answers the questions investors will pose to startups such as the following:

How big is the market and what are the most profitable market sectors to pursue?

Who are the competitors and how are you different from them?

What do the current customers think about the competitors?

Use the market research to convince the investors to fund your startup.

Here are some key steps to follow:

After researching the market, build a slide deck showing the results of the market research in full.

Describe in detail the size, growth rate, sectors, and composition of the market. 

Show the current industry trends and state of technology.

Highlight the next generation of technology coming up.

Show the current competitors with their strengths and weaknesses.

Show the current distribution channels used in the industry and upcoming new ones.

Identify your target sector in the market and show how your company fits in.

Describe the product you are going to build.

Contact investors and indicate you have been researching a market segment.

Offer to share the results with them without any ask of them.

Investors find cogent, concise market research interesting as it informs them about the industry.

Show them the presentation and ask permission to keep them informed. 

When it comes time to raise funding, you’ll have a group of investors educated about your market and your approach to it.

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.

_______________________________________________________

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/ 
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Industry Analysis for Market Research

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

In researching a market for your startup it’s important to analyze the overall industry.

Analysis will help you forecast sales and growth rates for your startup.

It shows the competition in the industry.

It shows the life cycle of the industry which informs the type of startup to build.

It highlights missing elements that a startup could fill.

It forecasts the potential returns a startup could make.

It shows the current industry trends to use for building and selling a product.

Here are some key steps to analyze your industry:

Collect data from the industry by reviewing industry reports.

Analyze the data for the current players, the regulatory environment, and customer preferences.

Review the current state of technology in the industry.

In particular, notice the next stage of technology development.

Summarize your findings in a report showcasing the challenges and opportunities of the industry.

Once completed, use the report to select a position in the industry and a product to offer.

Design the product and delivery to effectively compete against the competition.

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.

_______________________________________________________

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/ 
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Primary vs Secondary Market Research

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

Market research falls into two categories:  Primary and Secondary research

Primary market research consists of gathering information directly from people through a variety of means.

Secondary market research consists of examining existing research through reports.

Primary market research can be done in the following ways:

Interviews -- talking with people directly about their experience.

Focus groups -- gathering a group of people together and asking for their opinions.

Surveys -- sending out a list of questions for people to answer.

Observation -- watching what people are doing.

Secondary Market research can be done in the following ways:

Industry analyst reports -- reports written about an industry segment.

Studies -- research reports written on a specific topic.

Market reports -- reports written about a specific market segment.

Primary research yields greater detailed information than secondary research.

It is useful for answering specific questions.

Secondary research can be reviewed more quickly and at a lower cost.

It is useful for identifying the key questions to ask. 

Consider using both primary and secondary market research in your project.

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.

_______________________________________________________

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/ 
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Segment the Market

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

Market segmentation divides your target market into logical groups based on needs, location, or other factors.

The purpose of market segmentation is to identify the most profitable customer segment to pursue.

This becomes your ideal customer profile. 

Segmentation also lets you customize your product for the customer based on their needs.

Market segmentation can be based on psychographic factors such as activities, interests, beliefs, and opinions.

Luxury brands use these factors to find customers who aspire to a higher lifestyle.

Demographic factors can be used.

Banks target customers based on their income, education, and marital status.

Behavioral factors can be used.

Online consumer sites look for buying patterns, brand loyalty, and location of purchase.

Finally, geographical factors can be used.

Those selling outdoor lawn equipment will segment based on geography, climate, and size of city.

Consider these factors in segmenting your market to find the ideal customer profile. 

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.

_______________________________________________________

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/ 
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Identify the Ideal Customer Profile

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

In researching a market it’s important to identify the ideal customer profile.

The ideal customer is the one who is best suited to buy your product or service.

A startup should focus on finding and selling to ideal customers instead of selling to anyone.

Here are the steps to identify your ideal customer profile:

Review your customers to identify the characteristics of the best ones.

List out their characteristics including:

What problem are they solving?

What size budget do they have to solve the problem?

What else do they bring such as education, experience, or training?

What position do they hold in their company?

Interview ideal customer candidates for the following:

What do they read?

Where do they hang out?

What are their overall goals?

What attracts them to events, content, or networks?

What do they not want?

What networks do they join?

What other activities do they engage in?

Combine the answers into an ideal customer profile that you can use for your sales and marketing activities.

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.

_______________________________________________________

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/ 
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How To Size the Market

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

Sizing the market is a key step in researching an industry.

Follow these steps to size the market for your startup.

Define the total available market which is anyone you can sell your product to.

Next, define the total serviceable market which is the segment of the market you can reach.

Then define the total serviceable obtainable market which is the portion of that market you can win.

With this information, you can calculate your market volume which is the number of transactions you can generate.

First, calculate the penetration rate which is the number of customers divided by the market size times 100. 

For example, if you sell to grocery stores in a state, then your penetration rate is the number of stores you currently sell divided by the total number of stores in the state times 100.

Now calculate market value which is found by multiplying the average sale per grocery store by the number of stores you have.

If you sold $20K per year to a store and you are in 100 stores, then your market value is $2M.

Finally, segment your market into logical groupings.

In our example, we could divide the stores by geography and treat the stores in each direction such as north, south, east, and west as a separate segment.

Use these steps to calculate your market size, volume, and value.

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.

_______________________________________________________

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

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Analyze Industry Trends

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

When conducting market research for your startup, it's crucial to differentiate between primary and secondary research.

Primary research involves gathering data directly from individuals, which provides firsthand insights into customer experiences and needs.

It helps you understand the target audience through methods such as interviews, focus groups, surveys, and observation.

Secondary research relies on existing studies and reports, enabling you to quickly gather industry information.

It allows you to analyze trends, benchmark competitors, and identify gaps that your startup could address.

Here are some key steps for conducting your market research:

Start with primary research by interviewing potential customers to gather their insights.

Conduct focus groups to obtain deeper opinions on your product concepts.

Utilize surveys to quantify customer preferences and behaviors.

Complement this with secondary research by reviewing industry analyst reports and studies relevant to your market segment.

Analyze the combined data to identify key trends, challenges, and opportunities that inform your business strategy.

Once you've gathered and analyzed the information, develop a dual approach using both primary and secondary research to refine your product and go-to-market strategy.

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.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
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On this episode of Investor Connect, Hall welcomes Merom Klein and Louise (Yochee) Klein, co-founders of Courage Growth Partners. Located in San Francisco, California, Courage Growth Partners specializes in helping startups cultivate a strong company culture to drive adoption and success. They work closely with emerging companies to develop techniques that enhance the pitching process and improve communication with investors. Their insights on organizational culture aim to create environments where innovation can thrive and align interests among all stakeholders.

Merom Klein is a business psychologist and leadership expert with extensive experience guiding startups in effective leadership and innovation practices. His partner, Louise Klein, brings expertise in strategic partnerships and organizational development, enriching their approach to supporting startups in navigating the complexities of early-stage growth. Together, they focus on building cultures that foster collaboration, engagement, and shared goals among teams, allowing startups to approach their pitches with authenticity and confidence.

In this episode, Merom and Louise share valuable perspectives on the importance of nurturing a strong enterprise culture from the very beginning of a startup's journey. They emphasize that as soon as a few individuals come together, a company culture begins to form—and being intentional about it can lead to significant advantages down the line. Among the highlights discussed are the five key strengths of a healthy culture that can resonate positively with investors, the need for a "win-win-win" mindset, and the concept of cultivating work as a service to enhance employee engagement and performance.

Visit Courage Growth Partners at www.couragegrowthpartners.com, LinkedIn, and on Twitter. Reach out to them at www.linkedin.com/company/courage-growth-partners and on Twitter.

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.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
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Identifying Competitors Through Market Research

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

In researching a market segment for launching a startup, identifying competitors is a key component of the work.

Competitors tell you a great deal about the customers, challenges, and composition of the market.

To find the competitors approach the market as a prospective customer and search for solutions online.

This includes searching both the web and social media for a solution to one of the problems you’ve identified in the market.

Capture the results in a competitor map.

In reviewing competitors look for their positioning in the market. 

Are they trying to be a differentiated solution or the lowest cost?

This will help define the careabouts of the market.

Map out the value chain of the market and notice where customers and competitors sit.

In a value chain, there are often multiple customers one could pursue. 

Look where the competitors are clustered and where they are not.

Check the competition's business model by how they make money.

Examine the amount of money each type of customer has to spend.

Compare the competitor map with the value chain map to see where opportunities may lie.

Look for open spaces that no competitors are directly targeting.  

Capture the results in a value chain and competitor map.

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.

_______________________________________________________

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/ 
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Questions To Use in Market Research

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

In researching a market use these questions to find out more:

Who are these people in the market?

Where can you find them?

What are their challenges?

What do they aspire to achieve?

What do they read?

What do they buy?

Who are their thought leaders?

Use these questions to find out more about their customers:

What dollar level do they deal in?

How do you reach them as customers?

How do the transactions flow?

Would you like them as your customers?

What do the customers complain about?

Use these questions to find out more about their competitors:

Who are the primary competitors?

What do they offer and what is their value proposition?

Use these questions to map out a potential solution for your target market.

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.

_______________________________________________________

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/ 
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How To Perform Secondary Research

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

Secondary research provides additional information about a market.

Typically the information is free and accessible online. 

This includes web searches, market reports, and industry news.

This research is easier to perform since you don’t have to reach out to people for interviews or surveys.

It helps define overarching trends which may not be clear from customer interviews.

It can inform your market research plan and help define what primary research may be needed.

Here are some key steps to perform secondary research:

Start with online searches using keywords around your product, industry, or problem to be solved.

Capture key documents available such as market reports, industry studies, and articles discussing the problem.

Build a list of competitors and research each one to learn more about their offering.

Capture the results into a competitor map.

Compare the information from multiple sources to gain a better understanding of the space.

Analyze the data and draw conclusions from it such as current challenges the customer faces, and trends showing where the industry is headed.

Make sure to verify the sources of the secondary data.

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.

_______________________________________________________

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/ 
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How To Research a Market

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

Market research provides many benefits including identifying your target market and your ideal customer.

Here are the steps to research your market:

Size the market by looking at it from three levels.

Total Available Market is the size of the market of everyone related to it.

Total Serviceable Market is the size of the market you intend to pursue with your startup.

Total Obtainable Market is the size of the market you can reach.

For example, you may want to only reach the US portion of the market. 

Review the competitors in the space for their product offerings.

Look at the price, feature sets, distribution channels, and leadership.

Note what channels competitors are using.

Research the available marketing channels and test to see what works for your startup.

Run trials and tests in each channel to check performance.

Identify keywords and phrases for SEO and conversion.

Test out various landing pages for signups.

Understand your target audience, in particular your ideal customer profile.

Find out what they care about, where they are located, what they read, and what channel reaches them.

Review social media to understand the topics, issues, and players in the industry.

Identify the industry leaders and their content profiles.

Gather the results of this research into one report to share with the team and investors.

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.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
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Types of Market Research

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

There are several types of market research one can use in studying a market segment.

Consider these types of research:

Primary research -- gathers information directly from the customer and industry-related contacts.

This can be useful in identifying key problems the customer is trying to solve.

It’s also helpful in identifying the ideal customer profile for a potential startup.

Secondary research -- gathers information by reviewing existing data on the subject.

This includes market reports, public data sets, industry trend reports and more.

Public data sets include the US census report, trade association reports, and private market research reports.

This helps size and segment the market.

Interviews -- first-hand encounters with customers in the market segment.

This can be useful in identifying the customer's workflow and how the problem impacts it.

Focus Groups -- a group of people in the target segment provide feedback on the current challenges. 

Usability research -- shows how the customer currently uses a product and their impressions of it. 

Observation research -- this research simply views the customer using the product.

This yields insight into what features are used and how the customer uses it.

Consider these types of market research for your startup.

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.

_______________________________________________________

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/ 
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Why Do Market Research

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

Market research is a key step in preparing to launch a startup.

Here’s a list of reasons why it’s important to give it proper time and attention.

Quality market research will help you avoid spending time on startup ideas that have no significant market demand.

It will help you find product-market fit faster.

Quality research shows the changes in a market and what the market needs.

It shows what customers to pursue and how to promote the product.

Market research will help you find more investors.

After completing your market research, take the findings and build a slide deck showing the size, growth rates, and trends.

Reach out to potential investors and invite them to learn more about the market segment.

In general investors look for quality research and take the opportunity to learn more.

Tell the investor you are not raising funding now but only researching the market and you want to show them the results.

Present the information to the investor and indicate you are going to work on a startup in the space.

Offer to give them updates on the market.

There’s no ask to the investor so it’s easy to gain access to them.

When the time comes to raise funding, you’ll have a group of investors who are educated on your market segment.

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.

_______________________________________________________

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/ 
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Closing the Raise Without a Lead Investor

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

There are more startups than there are lead investors.

Not every fundable startup will find a lead investor.

Here’s how to close your round without one:

Start your fundraise with a convertible note.

Make sure there’s a market-relevant valuation cap on the note.

The convertible note is a debt instrument that converts to equity later.

The valuation cap sets the upper limit of the valuation upon conversion.

There are many investors who are not lead investors but rather follow on investors.

Show how the valuation and final terms will be set on the next round and invite investors to join the fundraise.

The investments into the convertible note will help fuel the growth of the startup which in turn can lead to more investors joining.

Be on the lookout for a lead investor.

Look for an investor that wants equity and will invest at least $100K into the business.

For those investor prospects, discuss with them about leading the round.

Even if there’s no lead, the startup can raise the entire fundraise amount to carry on the business. 

In the next round of funding continue in the same way.

Use convertible notes to fund the business till you find a lead investor. 

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.

_______________________________________________________

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/ 
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For Feedback please contact info@tencapital.group   

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Closing a Lead Investor

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

A lead investor is important for raising funding.

They negotiate the terms and valuation of the deal and bring other investors to join the round.

Here are some key steps in closing a lead investor for your fundraise.

Identify the right investor for your startup.

Look for one that fits your sector and stage.

Generate interest from other investors to show the lead investor there is support for your deal.

Introduce the proposed lead investor to these investors.

Gather all the diligence documents into one place so the process doesn’t turn into a paper chase.

Provide background information about comps in the market to show the range of valuations in the sector.

Design an initial set of terms and a proposed valuation to provide a starting point.

Offer additional incentives to the lead investor such as warrants for leading the round.

Offer a paid advisory board position to the lead investor  upon completion of the round to compensate for the work.

In short, reduce the workload and provide incentives to the lead investor.

Consider these steps in closing a lead investor for your round. 

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.

_______________________________________________________

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/ 
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For Feedback please contact info@tencapital.group   

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Characteristics of a Lead Investor

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

Startup founders are looking for lead investors. 

Good lead investors exhibit these characteristics:

They believe in the founder and they tell other investors why they should too.

They are not trying to take over the company but rather support the founder.

They are easy to work with which is important since they will be there to the exit.

They exhibit a strong sense of ethics.

They have a strong reputation in the startup space.

They show their experience in leading rounds.

They have a track record of successful investments.

They know the investor networks and have access to them.

They invest in other deals aside from the founders giving them diversification.

Look for these characteristics in a lead investor for your startup.

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.

_______________________________________________________

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/ 
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How To Find a Lead Investor

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

Most investors do not lead the fundraise round but rather follow-on.

There’s a great deal of work and most investors are not signing up for it.

Some will express interest in investing after you have a lead investor.

Here are some steps to help find a lead investor for your fundraise:

Start with a convertible note for your fundraise.

Convertible notes bring investors into the deal without setting the valuation.

The founder can start picking up funding which helps fuel the growth of the business.

This validates the fundraise to the follow on investors.

Look at other startup fundraisers to see who led the round.  

Make contact with startups who raised from that lead investor and ask for a warm introduction.

Reach out to those who are known to lead investment rounds and show the fundraising traction already in place.

You may be able to attract a lead investor to lead your round. 

Another approach is to take two to three investors who are interested and gather them together into a group with a regularly scheduled meeting.

In the meeting they each share their questions and feedback.

Document the results of the meeting and share with the follow-on investors.

By gathering the three investors together you can create a lead investor group.

Once the lead investor group comes to agreement with the founder on valuation and the deal terms, you have a led deal.

Consider these steps in finding your lead investor.

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.

_______________________________________________________

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/ 
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On this episode of Investor Connect, Hall T. Martin has an engaging conversation with Paul, the founder of a pioneering AI-driven platform designed specifically for the restaurant industry. Paul shares his unique journey into tech after a promising career in professional hockey was derailed by an injury. His passion for innovation led him to create a comprehensive suite of solutions that enables restaurants to optimize operations using artificial intelligence. Together, they explore the fascinating landscape of the AI market today, especially within the context of hospitality—a sector that, as Paul describes, is ripe for technological disruption.

The discussion dives deep into the challenges faced by restaurant owners, particularly in managing marketing efforts and reducing operational costs. Paul explains how his platform alleviates these pain points by automating functions that have traditionally consumed excessive time and resources. With capabilities ranging from payroll management to real-time inventory tracking, he's built a system that not only simplifies restaurant management but also drives customer engagement and repeat business through intelligent, data-driven marketing strategies. Hall humorously notes the struggles of conventional restaurant marketing and the opportunity for Paul’s AI solution to drastically improve this crucial aspect of the business.

As they shift gears, Hall inquires about Paul’s recent fundraising efforts. Paul reveals that they raised $3.6 million in a friends-and-family round but quickly realized that more funding was necessary to achieve their goals. Currently, they’re in the midst of a seed round, having raised $1.7 million and looking to close the remaining $400,000 needed. The conversation reveals the importance of strategic investor relationships and how building a solid foundation of stakeholders can help propel startups to the next level. Hall’s insights into connecting with angel investors reflect his practical approach to securing needed funding.

Finally, the episode emphasizes the notion that having proprietary data can serve as an essential competitive moat in the AI landscape. Paul elaborates on the uniqueness of their data bundle, which combines various aspects of restaurant operations to generate actionable insights. Hall underscores the significance of integrating data for creating value and enhancing processes, ensuring that a startup like Paul’s can stand apart from competitors. The episode wraps up on this note of optimism and exciting potential in the AI-driven restaurant space, leaving listeners with a sense of the transformative impact technology can have on traditional industries.

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.

_______________________________________________________

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.