SaaS Growth Metrics

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

There are several key SaaS metrics to know in evaluating a startup.

Here’s a summary of the key metrics:

SaaS Quick Ratio  -- New MRR divided by the churned MRR.

This measures how efficient your growth is.  

Low efficiency will make scaling difficult.

LTV: CAC -- Lifetime value to Cost of Customer Acquisition

This measures how long customers continue to use the product and compares it to the cost of acquiring that customer.

An early-stage company should see a 3:1 ratio.

Over time, it should improve to 5:1 and later to 7:1

Churn Rate

This measures how many customers drop off during a time period, such as a month.

Segment the customers into groups to examine churn to see where the business is not succeeding.

40% Rule

Growth and profitability should add up to 40% or more.

There’s a tradeoff between growth and profitability.

The more invested in growth, the less profitability.

This shows the viability of the business regardless of whether or not they focus on growth or profitability.

Use these metrics to understand a potential startup investment.

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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How To Build Momentum in Your Fundraise

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

Fundraising has its ups and downs, including long patches of slow-paced activity.

Here are some key steps in building momentum for your fundraiser. 

Always break the total fundraising into smaller rounds.

This makes the raise manageable from the start.

Do the easy ones first.

Investors who know you and believe in the deal will sign up the quickest.

With those signups, you now have money in the deal.

Use this to spur the momentum to other investors who are not yet ready to invest.

Show why the other investors joined the round.

Strive to reach the halfway point.

From there, the optics on the deal will look better to the prospective investor.

The risk of the deal not getting funded goes way down.

Build a list of interested and committed investors.

Assign an amount to each one and map them out on the remaining portion to be raised.

Show all of them how this will close the round.

For the remaining investors on the list, give them a deadline and push them to pass.

This takes them off your list and lets you focus on closing the interested and committed 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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How To Show Your Market Size

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

The market slide in the startup fundraise pitch shows the total available market opportunity.

Here are some key steps in showing your market size.

Show the components of your market, including the number of buyers and average selling price.

Include the source of the market research so others can retrace your reference.

Define the market segments clearly so there’s agreement about what part you are pursuing.

Include serviceable and obtainable sizings as well. Avoid phrases such as “only 1% of the market gives us $10B in revenue”.

This means nothing to the investor.

In fact, the investor is left wondering how you will enter the market.

Instead, focus on the first twenty customers you’ll pursue.

Call this out as the beachhead market and show how you have already contacted the first twenty customers and have some traction with them.

It’s important to show the overall market as well as the initial segment you will pursue.

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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In this episode of Investor Connect, Hall T. Martin welcomes Herbert to discuss the pivotal role family offices play within the entrepreneurial ecosystem. Herbert highlights the importance of understanding local accelerators, venture capitalists (VCs), and other funding sources in the community during the investment due diligence process. He emphasizes that co-investment requests from family offices to VCs are typically more successful than those from individual entrepreneurs, as they signify a commitment and vested interest from the family offices, thus encouraging VCs to engage more readily.

Herbert also notes the unique contributions of family offices in supporting emerging managers within the venture capital space, often stepping in to fund those who have yet to build the extensive track records required by larger institutional investors like pension funds or foundations. 

In the latter part of the episode, Hall introduces Mark Depa of BIO Oxo, a biotech company pioneering innovative treatments for conditions like stroke. Mark pitches their leading compound, BIO 01, which is in phase two clinical trials for treating intracerebral hemorrhage, a type of hemorrhagic stroke. He explains the compound’s unique origins and mechanisms, derived from the saliva of ticks, and discusses its potential to address a significant unmet medical need. Mark also outlines the company's milestones, market potential, and funding strategy, emphasizing the strong backing and promising preliminary data that positions BIO Oxo for substantial growth and impact in the medical field.

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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Best Practices in Telling Your Story

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

Storytelling is a key skill in fundraising.

Use these best practices in telling your story in the pitch to investors:

Declare the problem as the villain in your story.

This sets up a conflict.

Raise the tension by creating a sense of urgency.

Raise your product as the solution to the problem.

Spark interest by noting the possibilities of what the solution can do.

“What if we could cure cancer with this?”

Show the benefits of your solution at a high level.

Don’t just predict your growth story, show it happening now.

Build confidence in the team by showing what they have done so far.

Talk about the solution and what it can do at scale.

Describe the big picture about where this is going.

Invite the investor to join you on the journey.

Investors want to make a return, but they also want to be a part of something great.

Use these best practices in telling your story to raise funding.

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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How Much Funding To Raise Based on Valuation

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

In planning the fundraiser, the amount of funding is a key factor to determine.

The funding amount should take the company to the next major milestone.

It should give the company 18 months of runway at a minimum.

Investors expect the valuation to be around 3X to 4X that of the funds raised.

Most investors want 20% to 25% of equity for each major round of funding.

Therefore, the founder needs to see the valuation be at 3X to 4X the raise amount to account for the dilution.

Each deal will vary based on the following factors:

Growth rate of the sector -- some sectors are growing faster than others and can command a higher valuation.

Location -- some regions offer higher valuations than others.

Team -- strong teams with a great track record will command higher valuations than first-time teams.

Traction -- those with stronger traction can command higher valuations.

Use the 3 to 4x rule to set your valuation and fundraising goals.

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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How To Wrap Up a Pitch

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

In a pitch to an investor, there’s no need for an agenda slide or a summary slide. 

The investor knows the format of the pitch and what topics will be covered.

There’s little time for summarization of what was covered.

To wrap up a pitch, consider the following:

Show your contact information, including phone number and email address.

Have a call to action so the investor knows what you expect from them.

Potential calls to action include let’s set up a call to discuss your questions or join our diligence meeting next week.

Most startups end their pitch with a slide labeled “Questions” and little else.

Use the space on the last slide to highlight a key value proposition.

This could be a call out, such as “We’re the A team working on the B project.”

It could be “Come join us in saving the planet from plastic.”

It could be a closed sale of a key account, such as “IBM is just the beginning of many companies we will win.”

Consider your most important value proposition and place a quote that highlights it.

Give the investor something to remember your pitch.

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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Basic Mistakes in Fundraising

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

In the startup world, there are mistakes founders make in their fundraisers.

Avoid these basic mistakes in fundraising

Raising less than $250K.

In the venture world, $250K is the lowest amount of funding to raise.

Below that level, it’s not possible to do something meaningful with the startup.

Raising funds from first-time investors.

Those who have never invested in startups will require a great deal of education.

The investor will need help on terms sheets, standard operating procedures, and more, taking the founder’s time away from other investors.

Not setting a minimum investment amount.

In the angel world, $25K is a common floor for an investment.

Too many investors with $5K and $10K checks can fill up the cap table.

Not raising sufficient funding.

The fundraising target should provide enough runway to take the company to the next level.

Not performing diligence on your prospective investors.

The investors will perform diligence on the startup, so the startup should do so with investors.

Signing up the wrong investor can create headaches for the founder later.

Avoid these mistakes in your fundraising.

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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Basic Due Diligence

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

Investors pursuing an investment in a startup should perform due diligence on the business.

The purpose is to evaluate the opportunity and ensure everything relevant is known about it.

Here are the basic steps to perform diligence:

Market -- this includes the target market and its size and segmentation.

It’s important to understand the current state of the market and the competition.

Is the market size large and growing, and is the competition fragmented or concentrated?

People -- this includes the founder, CEO, and other C-level people.

It’s important to know the experience and background of the team.

Do they have the skills necessary for the startup to succeed?

Financials -- this includes the cash runway, current revenue traction, and fundraising.

It’s important to know the startup has sufficient cash and time to achieve its objectives.

Does the fundraising match the stage of business, and will it be enough to go to the next level?

Product -- this includes the technology base, the core product, and secondary products.

It’s important to know the current state of the product, including features, position in the market, and competitive advantage.

Will the product win enough customers to achieve the financial forecast?

Legal -- this includes the legal entity and intellectual property.

It’s important to know what protection the business has and what legal entity it currently holds.

Will this give the business enough protection to achieve a place in the market?

Consider these basic steps in your due diligence process.

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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In this episode of Investor Connect, Hall T. Martin talks with Herbert Drayton, a partner at Highmark Capital, about the importance of building capacity before expecting change in the startup ecosystem. They delve into the legwork involved in preparing companies for investor engagement, including managing pitch events, and running marketing campaigns. Herbert shares his insights on the key components that make a startup successful, emphasizing the significance of infrastructure, mentorship, and community support. He discusses how Highmark Capital focuses on investing in AI startups led by underrepresented founders in the southeastern US, mainly in South Carolina.

Additionally, the episode introduces Ava, the new AI-powered assistant at 10 Capital that helps entrepreneurs find funding tips and investors locate their next big investment. Ava extracts knowledge from over 500 blogs, podcasts, and tools like the 'How Fundable is Your Startup' calculator to answer user questions efficiently.

For more information about the events and resources at 10 Capital, visit their website and poke around the 'Events' tab. Herbert addresses the crucial yet often neglected aspects of creating sustainable investments, such as ensuring the founders are ready to scale and providing them with robust ecosystems for long-term success. He illustrates how successful investment isn't just about providing capital but also about offering the necessary support systems, including mentorship, strategic partnerships, and continuous guidance. This comprehensive approach ensures that both the investments and the entrepreneurs have the foundation needed for impactful growth. 

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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Key Slides in Your Pitch Deck

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

In the pitch, there are specific slides that are key to the investor.

Here’s a list of key slides to include in your deck.

Problem -- provides the overall context for the startup.

It must be a big problem outlined with a few numbers.

Solution -- shows the product that solves the problem.

It’s important to make clear what the solution is and how you make money.

How it works -- shows the product in action with the customer’s situation.

Shows how the solution fits into the customer's workflow.

Traction -- shows the current status of revenue with customers. 

It’s important to state the current status as the investor needs to know where the startup is today.

Team -- shows who will take the business forward.

The team must have experience and be all-in on the startup.

Target market -- shows the market the startup will pursue.

The market must be large and growing. 

It’s also important to show where the startup will enter that market.

Fundraise -- shows the amount of funding sought and at what terms.

The fundraising ask must fit the stage of the company.

Be sure to include these slides in your pitch deck.

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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Burn Multiple

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

Burn rate is the amount of cash spent over and above the revenue received.

It’s typically calculated on a monthly basis.

Burn multiple is a metric that calculates the capital efficiency of a startup.

To calculate burn multiple divide the monthly burn rate by the net new ARR.

It shows how much revenue your startup is generating vs dollars spent.

The burn multiple shows the efficiency of the business unlike the CAC: LTV ratio which measures just sales and marketing.

In most startups raising venture capital the burn multiple ranges from 1X to 3X.

Anything below 1x is fantastic. 

From 1x to 2x is good

2x to 3x is a problem

Over 3x is a major problem.

Very early-stage companies may have a 3X burn rate because the revenue hasn’t come up yet.

At Series A many companies have a 2X multiple.

At Series B the burn multiple should drop down to 1X or less.

At break even, the burn rate multiple will drop to 0.

Check the burn multiple of startups in your portfolio to see if they are tracking for their stage.

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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Pre Seed Seed Seed+ Seed++ Series A

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

In startup funding, the raises come in rounds.  

The startup can raise a pre-seed round followed by a seed, then a Series A, Series B, and so forth.

Many founders view this approach as one step after the other.

The reality is there’s a large gap between the Seed and the Series A.

Some call this the Valley of Death.

This occurs because the startup often moves from family and friends and angel funding to institutional investors.

The gap is wide between the two investor types.

The funding reality is closer to Seed Seed+  Seed++ another $250K bridge round and then Series A.

One strategy is to find bigger and more lucrative customers as you move through the series so you can generate more revenue.

This reduces the amount of funding required to reach the next level.

Another strategy is to factor this many rounds into your fundraising strategy from the start.

Consider the valley of death and how you will cross it with your fundraising planning.

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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The First Raise Is a Minimum Round

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

In startup fundraising, many founders try to raise too much funding in the first round.

This causes dilution for the founder as the valuation will be low. 

In startup fundraising, the first raise is a minimum round.

Instead of raising everything you need to accomplish the goals, you should raise a minimal amount to get the initial product up and some revenue coming in.

The startup’s valuation will be at the lowest point in the life of the business so it’s best to raise the smallest amount possible.

As the startup builds more products, teams, and revenue the valuation will rise.

The majority of the funding comes later when the valuation is higher.

This strategy reduces the founder's dilution.

In structuring your fundraiser consider what can be done to generate the biggest bang for the buck with the least amount of funding.

Then add more capabilities to the product and more team members.

By tranching out the product features one can reduce the funding requirements.

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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Valuation Is the Primary Factor Impacting Returns

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

There are many terms in a startup fundraising terms sheet.

Valuation is the primary factor impacting investor returns.

Here’s an example showing the impact of valuation on the returns.

The pre-money valuation plus the investment yields the post-money valuation.

The investor's ownership is the investment divided by the post-money valuation.

For example, if a startup is raising $1M with a $4M pre-money valuation that yields $5M post-money.  

This gives the investor a 20% ownership stake as the post valuation is $1M divided by $5M.

In another example, a startup is raising $1M with a $19M pre-money valuation that yields $20M post-money.  

This gives the investor a 5% ownership stake as the post valuation is $1M divided by $20M.

There are terms that can help mitigate an outsized valuation such as a liquidation preference in which the investor receives their original investment first.

Of all the terms in the deal, the valuation is the primary factor to consider.

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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In this episode of Investor Connect, Hall T. Martin chats with Christopher Ezold, partner at Wisler Pearlstine, a Pennsylvania-based law firm specializing in business, employment, and corporate law. Christopher shares insights on emerging legal risks and trends that businesses should prepare for, especially amid economic uncertainties in 2025. Key topics include the importance of securing debt, the complexities of cybersecurity and privacy laws, the rise of labor and employment issues, and the challenges around mergers and acquisitions.

Hall and Christopher also delve into common legal missteps that lead businesses into lawsuits and emphasize the significance of proper documentation and early involvement of legal counsel. Christopher explains the nature of fraud, distinguishing between intentional deception and negligence that creates opportunities for fraudulent actions. He recounts complex fraud cases, including one involving a private equity fund's deceptive practices, and shares lessons learned from these experiences.

The conversation also touches on the fluid legal landscape of non-compete and non-disclosure agreements, offering advice on how to ensure these agreements are both necessary and enforceable. Christopher highlights various ways fraud can occur within a company, from overvaluing assets to manipulating earnings, and stresses the importance of internal vigilance and thorough investigation. Hall and Christopher discuss strategies for addressing potential fraud or legal violations, from preserving data and starting immediate investigations to understanding the impact and having flexible plans in place. Christopher underscores the importance of having a trustworthy attorney who understands the business and can provide early advice to avoid litigation.

The episode concludes with practical tips on engaging the right authorities for different types of fraud cases and the critical role of transparency and trust in the attorney-client relationship. 

For more information or to contact Christopher, visit www.wislerpearlstine.com or email him at cezold@wispearl.com. 

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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Consider Dilution in Setting Your Fundraise

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

In startup fundraising dilution is a key issue for founders.

At each stage of funding investors will demand a certain amount of equity.

Here’s how much each round will cost a startup in equity:

Pre-seed

Typically funded by family and friends the cost of funding is 5 to 10%.

Seed

Angels take 5 to 10% while venture capitalists take 10 to 25%.

Seed+

Most founders will need additional funding to carry the business forward.  

Seed+ rounds cost the same amount as seed rounds.

Series A

Venture capital investors will seek 15 to 25% of equity at this stage.

Series B

Later-stage VCs look for 10% to 20% of the equity at this point.

Series C and following.

Growth equity investors look for 10% to 15% at this level.

Consider the impact of dilution on your startup from fundraising. 

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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Diligencing AI Startups

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

Artificial intelligence or AI brings new capabilities and applications.

Many startups launch their business around AI technology.

Investors considering an investment in an AI startup should check the following:

Source of data.

Does the startup have access to data sets?

Unique data.

Does the startup have a data set that others do not have access to?

Clean data.

Is the data clean and ready for use or must it go through a costly cleaning process?

Quantity of data.

Does the startup have access to a substantial amount of data?

Cost of processing.

How much does it cost to process the data?

Machine learning. Also called  ML.

Do they have their own ML model or are they using an open-source one?

Core competency.

What is their core competency -- core data, machine learning, user interface, and others?

ML skills.

Does the team have a core skill set around developing ML?

Data collection regulatory

Does the team gather and use the data sets within compliance?

Consider these factors when you are conducting your diligence on an AI 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 

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Medical Device Milestones

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

The medical device startup has a well-defined list of milestones to achieve to bring a product to market.

Here’s a list of key milestones for the medical device startup:

Market requirements -- defines the current status of solutions and unmet needs of the market.

Product requirements -- defines the features and specifications of the proposed product.

Prototypes -- intermediate implementations of the product for testing, customer feedback, and fundraising with investors.

Clinical unit -- a version of the product to be used in clinical testing.

Pre-clinical validation -- clinical tests to determine safety and efficacy.

Clinical trials -- animal and human tests with the clinical unit.

CE Mark -- certification to sell the product in Europe.

FDA 510K approval -- for non-invasive products in a sector with previously certified devices this is the shortest path to FDA approval.

First orders from customers -- the initial purchase of the approved product.

Break-even -- the product achieves break-even on revenue with cost to build and sell.

A typical medical device will take three to five years to gain FDA clearance and reach the market.

Consider these steps for your medical device development.

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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Overcoming the Investors’ Hesitancy

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

In fundraising, there comes a time when the investor must decide to join or pass on the round.

Many investors hesitate to join as they try to decide.

Here are some steps founders should take to overcome the hesitancy:

Start the outreach to investors well ahead of launching the campaign.

Begin six months before contacting potential investors and indicating you are preparing a fundraise.

Use the six-month window from first contact to campaign launch to educate the investor and provide a few updates.

Craft a strong story and use case for your company.

Take the investor on the journey with you by keeping them up to date on the ups and downs of the business.

Show how short the time from launch to break even will be and how well-defined it is.

In the very early stages avoid forcing the investor to climb the valuation wall.  

The valuation wall is the challenge the investor undergoes to determine the correct valuation.

Instead, use a convertible note with a valuation cap which effectively kicks the valuation question down the road. 

Consider these steps to avoid the investor hesitancy phase.

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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How Private Equity Differs From Venture Capital

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

Private equity and venture capital are different types of investment.

Here are the key differences:

Risk level

Private equity takes less risk and thus a lower potential return than venture capital.

Private equity investments invest in firms with a positive profit line while venture capital investments run negative on the bottom line putting everything into top-line growth.

Control level

Private equity often takes a controlling position in the company.

Venture capital takes only an oversight position in most investments.

Stage of business

Private equity invests in mature companies with a history of revenue and profits.

Venture capital invests in early-stage companies with great promise.

Funding source

Private equity raises funding from institutional investors.

Venture capital raises funding from limited partners who are typically high-networth individuals.

Size of investment

Private equity often invests substantial amounts of money into the business to increase profitability.

Venture capital typically invests smaller amounts of capital to increase the growth rate.

Consider these differences in considering private equity or venture capital funding for your fundraise.

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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In this episode of Investor Connect, we dive into the world of live entertainment as a service with Jason Seitz of Ticket Rewards. Jason provides an insightful overview of how Ticket Rewards is transforming live entertainment by partnering with brands and venues to offer a seamless, engaging experience for consumers. With a significant inventory of tickets worth half a billion dollars, Ticket Rewards works with major brands like HBO Max, Celebrity Cruises, and United Mileage Plus to drive engagement and retention through exclusive ticket deals and loyalty programs.

This innovative approach helps these brands maintain customer loyalty and reduce churn by providing unique, emotionally resonant experiences that tie back to the brand itself. Jason also discusses some compelling case studies, such as the impact of their partnership with Celebrity Cruises, which saw a 40% higher open rate and 20% higher click-through rate for live entertainment emails. Similarly, their collaboration with HBO Max resulted in higher engagement rates and retention. The podcast further explores their revenue streams, scalability, and how they are striving to grow their client base amid increasing interest from new potential partners like Lyft, Travelzoo, and others. Their innovative business model and successful partnerships have helped them make commendable strides in the industry, including finishing the year on a profitable note.

Towards the end, Hall T. Martin and his guests delve into the intricacies of term sheets, offering a comprehensive breakdown of key financial parameters and how convertible notes like the 3x in 3 provide a flexible investment option. Hall emphasizes the importance of understanding term sheet dynamics, especially how these agreements can significantly favor either the founder or the investor. This episode is a must-listen for anyone interested in the intersection of live entertainment and innovative business models, as well as those keen on investment strategies in dynamic startup environments.

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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The Gap Between Seed and Series A

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

In startup funding, we talk about preseed, seed, Series A, Series B, and so forth.

It sounds like each stage is just one step after the other.

When you finish your pre-seed round you raise your seed.

In reality, there’s a gap between seed and Series A.

It often takes several rounds of funding to close it.

Most startups raise a preseed, seed, seed+, seed++, and another bridge round for $250K, and then go to Series A.

This is often a surprise to first-time founders.

The reasons are as follows:

In most cases, the Series A is the first institutional round of investment.

The requirements regarding revenue, growth, margins, churn, and other factors are fixed and rigorous.

Prior rounds of funding were often made regardless of the results of the business but rather on the promise of future results.

Series A investors have specific requirements around valuation and ownership stakes. 

This often requires better metrics and more revenue to make it work.

It’s often the case that the founders have a vision for a specific valuation.

Specific valuation targets often require better metrics from the startup.

Make sure you plan for the gap between the seed and Series A in your fundraise.

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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The Startups Advantage Over Big Companies

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

While big companies have size, resources, and reach, the startup holds advantages of their own.

Here’s a list of the startups' advantages:

Focus - the startup can focus all its energy and resources on one thing.

Big companies have an existing product line, team, and commitments they must maintain 

They cannot focus solely on one thing.

Speed -- the startup can move fast in building and iterating on a product.

Big companies must coordinate teams across department lines.

They cannot move fast given their structure, culture, and workload.

No legacy products -- the startup has no existing products to defend.

Big companies have legacy products they must support and sell.

In most cases, they must work around their current product lines.

No brand risk -- the startup has no historical brand to maintain.

Big companies have a brand and must protect it.

They cannot take on risky startup products as it puts their reputation at risk.

While big companies have a brand, scale, and resources, the startup is particularly well-positioned to pursue new products with disruptive technologies.

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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Startup Stages

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

The startup goes through several stages before it achieves product market fit and then scaling.

Here are the key steps that come before:

The founder establishes the team.  

This is often driven by a passion or a business opportunity.

The founding team develops a vision for the business they will build.

This is often improving the customer experience around a current problem.

The team envisions a product that provides value to the customer that solves the problem.

The team tests the market by talking with customers.

This often involves building minimum viable products and prototypes.

The team builds an initial version of the product and tests the business model.

The goal is to see if the customers use the product and if demand will spread.

The team takes the product out to a broader range of customers to check interest.

The initial customers are often family and friends and may be biased in their assessment of the product.

The team works on the product to achieve product/market fit.

The goal here is to make sure the product works well for the customer and meets their needs.

Consider these steps in establishing a startup for your idea. 

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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No NDAs Before the Investor Pitch

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

In startup fundraising, the NDA comes near the end of the process, not at the beginning.

An NDA stands for Non-Disclosure Agreement and requires the signatory to keep confidential any, and all information disclosed.

A founder asking an investor to sign an NDA before the pitch signals to the investor that there’s nothing protectable about the business.

In most cases, the investor will not sign the NDA and will take a pass on the deal.

A founder should give the investor basic information without an NDA.

The founder should focus on the benefits of their technology and business model instead of describing exactly how it works.

An example includes, our software reduces cost by 3x.

There is a place for NDAs later in the process.

When investors go into diligence, it’s appropriate for the founder to ask the investor to sign an NDA.

Other cases to use an NDA in the startup space include the following:

A potential acquirer wants to license a product or technology.

A potential acquirer wants to buy the company.

The diligence box has employee, customer, or partner information that is sensitive.

Keep the dialog on a non-confidential basis with investors so they can learn more about the business.

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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