In this episode of Investor Connect, Hall T. Martin welcomes Brian to discuss emerging opportunities in deep tech spaces. Brian emphasizes life sciences and healthcare technologies, highlighting investments needed to innovate and control costs. He points out the inefficiencies in the current healthcare system and the potential for AI-driven remote patient monitoring to shift care from hospitals to homes. Additionally, Brian identifies robotics, automation, and energy management technologies as other promising areas for deep tech advancements. The conversation also touches upon the commercialization of university innovations and proprietary IP management, shedding light on how startups can navigate these aspects effectively.

The discussion wraps up with Brian's views on the future of alternative energy, particularly the significant role nuclear technology might play amidst growing global energy demands. In the second part, we transition to Chris, who presents on ATE Technology, a FinTech company focused on collections and recovery software. Chris delves into the company's journey, market strategy, and future plans, emphasizing their growth and innovative solutions. ATE Technology has demonstrated strong revenue growth and proven products that address the needs of banks and credit unions. Chris explains how their SaaS-based solutions provide compliance and efficiency in managing disputes and collections, touching on the company's impressive client base and strategic partnerships.

The presentation also highlights the management team's extensive experience in the FinTech industry and outlines their plans for leveraging AI to further enhance their offerings. An engaging Q&A session follows, providing deeper insights into ATE Technology's business model, investment opportunities, and potential exits. The episode concludes with an invitation for listeners to reach out for further discussions and explore potential collaborations.

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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Showing Traction at the Seed Level

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

At the seed stage, the product is just going into the market.

The customer engagement is beginning.

Here are some steps to show traction at the seed level:

Show signs of repeatability.

This can come in several forms as follows:

Customers are using the product repeatedly.

Show daily, weekly, and monthly active uses.

Customers are buying the product repeatedly.

Show the number of customers making repeat purchases.

Show a repeatable process for acquiring new customers.

This could be a sales funnel with a repeatable process for acquiring and closing.

Show partners providing leads repeatedly.

Show qualified leads coming from the sales funnel repeatedly.

Also, virality is a good measure at the seed level.

Show how many customers are referrals from existing customers.

This demonstrates that customers are happy with the product and tell others about it.

In short, the startup has business processes in place for acquiring and retaining customers, and it’s working.

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 MicroVC Pitchdeck

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

MicroVCs need to raise funding to invest in startups, just as startups need to raise funding for their own business.

For MicroVCs raising funding, consider these points in building the pitch deck:

Call out two to three trends in the market.

Highlight the insights to be gleaned from those trends.

State the investment thesis to show the criteria for investing in a startup.

Show the strength of the team and their ability to execute on the investment thesis.

Show the community the team has and how it helps them source deals.

Call out the resources the team has for vetting deals.

Demonstrate the competitive advantage the team has in winning the best startups.

Finally, show the track record from past investments by the team.

It helps to show a portfolio company as an example.  

Include how the team found the deal and why the fund invested.

Call out why the startup chose to take funding from the MicroVC.

End with the value the team provided to the startup.

Investors care little about the general record of similar funds.

Each fund is unique, so the investor wants to know how this fund will be successful.

Include these elements in your MicroVC 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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Investor Access to Customers

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

In the diligence process, investors may want to talk with the startups' customers.

Their goal is to determine how well the product works and how committed they are to the startup's solution.

This can be a sensitive topic for founders as their customer relationships are highly confidential and often kept close to the chest.

It’s best to have a few customers who will talk with investors and give them a positive review of the product and the company.

This can be accomplished by providing great service and, in some cases, an additional discount.

This can be a negotiated point between the founder and the customer.

The customer often asks for a discount, so the founder counters with an additional ask, such as taking interviews from prospective investors.

Keep the more sensitive customers off the list.

Also, make the customer interviews the last step in the diligence process.

The founder should continue the negotiations with the investor by indicating that if the customer passes the investor’s test, then the investor commits to funding.

This prevents too many investors from contacting the same customers with only a potential investment on the table.

Consider these steps in handling the investor interaction with the startups' customers. 

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 CEO Leads the Fundraise

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

In a fundraiser, the CEO should lead it by setting the strategy and engaging investors.

This doesn’t mean the CEO must do everything by themselves.

It does mean that the CEO does the pitching and investor follow-up.

CTOs and CFOs can be helpful, but not by pitching the investor.

The investor wants to hear from the CEO as they want to know more about them.

Can they communicate well?

Do they have a clear vision?

Do they know their business well enough to cite the growth numbers?

What is their story?

Do they have all the key elements lined up to be successful, such as a great team, a solid product, and a large target market?

Others can help in building the pitch deck, researching the investors, and lining up investor pitches.

Advisors and investors can help by making warm introductions to other investors.

They can coach on fundraising strategies.

They can also help make decisions around oversubscribing fundraising rounds and other key points.

Make sure the CEO is signed up to lead the fundraising round, but line up additional support throughout the 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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Non-Dilutive Funding Options

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

Startup funding comes in two forms: dilutive and non-dilutive.

Equity funding is dilutive in that the fundraising reduces the ownership of the founders.

Debt is non-dilutive in that the fundraise doesn’t change the founders’ ownership.

Here’s a list of non-dilutive funding options.

Loans -- these tend to be short-term loans from a bank. 

Grants -- these are most often acquired from government agencies that make grants to startups to foster innovation.

Rewards/prepay crowdfunding -- this generates funding for startups in the form of prepayment for a product to be delivered later.

Licensing -- funding comes in the form of licensing the technology to other companies who use the technology in their product.

Tax credits -- funding comes in the form of tax breaks, such as an angel tax credit offered by many states.

Factoring -- funding comes in the form of short-term loans for manufacturing the product.

Venture debt -- a form of loan that uses the startups' raised capital as collateral.

Subscription-based financing -- loans to startups with recurring revenue that use the subscription revenue as collateral. 

Consider these non-dilutive funding options 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 

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In this episode of Investor Connect, Hall T. Martin, CEO of 10 Capital, introduces co-host Kat DeLillo and special guest Brian Wood of Wave Ventures. Brian delves into the innovative approach of Wave Ventures in partnering with universities to commercialize intellectual property. He shares the backstory of Wave Ventures' collaboration with Baylor University and how this partnership successfully accelerated the university's research status to R1 in record time. Brian outlines their unique model which allows Wave Ventures to hold over 80% equity in their startups, and how they strategically place business experts to guide these deep tech innovations from conception to market.

The discussion covers various successful projects, including advances in digital display technology, novel ventilator systems, and significant improvements in propeller design for drones and aircraft, all sourced from university partnerships. Brian also shares personal anecdotes about his unexpected journey into the venture capital space, highlighting his background in medicine and previous success in the entrepreneurial world.

This episode provides a comprehensive view of how Wave Ventures is not only financing the next generation of deep tech startups but also de-risking these investments to secure substantial returns. For more information on Wave Ventures' projects and their innovative investment strategies, stay tuned to Investor Connect. To engage with Wave Ventures and learn more about their upcoming initiatives, please visit their website and explore their wide range of high-potential startups transforming deep tech landscapes.

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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When To Consider Venture Debt

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

In startup funding, there is venture capital and venture debt.

Venture capital takes an equity stake in a startup in return for funding.

Venture debt makes a loan to the startup for that funding.

Both have their place in the startup ecosystem.

Venture capital comes in at the early stage of the business as the startup needs funding but has no revenue to pay it back.

Venture debt comes in at the later stage of the startup because the business has revenue with which to repay the funding.

Venture capital launches the business, but venture debt continues the growth.

As the startup grows from the early stage to the later stage, equity becomes worth a great deal more.

At the later stages, the founders calculate the value of their equity and compare that to the cost of a loan. 

Dilution in the form of equity funding becomes expensive to the founders.

Founders turn to venture debt when the dilution from the funding costs more than the loan repayment.

Consider the use of venture debt in replacement of equity funding from venture capital for 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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How To Stand Out From the Crowd

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

In raising funding, it helps to stand out from the crowd of other startups pitching.

Most founders will give the standard pitch, often with slides in the same order.

Here are some key pointers to make your startup stand out.

Show your business model in unit economic terms.

Show your growth story with a chart that goes up and to the right at a 45-degree angle.

This demonstrates there’s a growth story happening in your business.

Point out the recurring and repeating revenue streams you already have.

Show the skill set in its entirety that your team brings to the table.

List the team's exits and other performance wins.

Show your business with numbers that the investor can digest.

Choose three compelling metrics and show them in the presentation.

The investor will have a hard time remembering more than three, so choose the best.

Show the customer engagement with your product in terms of daily, weekly, and monthly active users.

Show how you have figured out customer acquisition and its repeatability.

Show your ideal customer profile.  Make it clear you know who you want.

Consider adding these points to your 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 

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Show the Business Model Unit Economics

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

Early-stage companies pitching investors often have little revenue traction.

In place of traction, show how the business model performs on the unit economic level.

Calculate the cost of acquiring a customer and the expected lifetime value of that customer.

Show the ratio between the two and make a note of it.

Show how your business model is profitable at the unit economic level.

This will resonate with investors who seek working business models.

Discuss the variability of the costs and how the costs will scale with the business.

Make a note of the gross margins and the profit margins at the early stage.

Some investors judge the business based on the margins and the variability of costs.

This allows the startup to ride the economic waves of good times as well as bad times.

Show how the business is close to breakeven already.

Note how few customers it will take to reach break-even.

Show how the business is profitable at the very early stages.

Show the business model in unit economic terms when pitching to an 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 

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Raising Funding in a Down Market

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

The best time to start a new business is during a down market.

Labor is plentiful.

The competition is on their heels.

Yet, customers are still looking for a solution to their problem.

In a down market, it can be even more difficult to raise funding than in an up market.

The outlook is gloomy, and uncertainty about the future hangs in the air.

Here are the key steps to raise funding in a down market:

Bring your A-game to the table.

Show all the values in the business, including a strong team and a large target market.

Also, show your key insights into the customer problem and your unique solution.

Show initial interest and traction with customers.

Highlight the robust margins in the business.

Talk about the short timeline to break even.

If your business requires a long timeline and has thin margins, rethink your business model.

Investors look for robust margins and short runways to profitability.

Show how the business is up and running and stable, and can weather uncertain economic conditions.

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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What Angels Look For

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

Angel investors are not professional investors in the same way as venture capitalists.

Angel investors are typically successful business people who want to invest in startups.

The old angel saying is, they want to make a little money, do a little good, and have a little fun.

They often have a broad or general investment thesis.  

They don’t focus on one sector or niche in most cases.

They look for startups that are solving a big problem with a differentiated solution, and led by a strong team with experience.

They look for product validation and market validation.

The product works, and people will pay for it.

Most importantly, they look for startups demonstrating the growth story.

The revenue is growing, and the startup is making good progress on building the business.

There needs to be a large potential reward but it doesn’t have to be 100X as in the case with many VCs.

They avoid companies that need to raise a large amount of additional capital, as this will dilute them.

They get excited about an opportunity that has recently reached an inflection point.  

This could be closing a lighthouse customer, launching the final version of their product, or hiring a team to accelerate sales.

In raising funding, position your deal for angel investors with these care abouts.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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First Meeting With an Investor

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

After a number of calls with a prospective investor, there comes the first meeting in person.

Here are some key steps in running that meeting:

Introduce yourself and your team.

Show the market you are pursuing.

Present your solution.

Show your sales process and how it works.

Explain your go-to-market strategy.

List the milestones you plan to achieve with the funds raised.

Define the fundraising status, including the amount, terms, and how much has been raised so far.

Make the presentation a collaborative effort, taking questions along the way to ensure everyone is tracking with you.

Answer questions directly and to the point. 

If the question begins with How many or How much then the answer should be a number.

If the question begins with When, then the answer is a time or date.

Stay on topic and avoid long, meandering stories.

Finally, come prepared knowing your numbers.

Consider these points when preparing for your investor meeting.

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 welcome Alan Foreman, the CEO of Be Secure, who discusses the transformative journey of his company in the realm of heart health. Alan shares that he founded Be Secure nine years ago after a lengthy career in Accenture's Life Sciences division. Currently, the company is on a $12 million growth raise to commercialize its breakthrough heart health technology, which received FDA clearance recently. Be Secure focuses on making preventive rather than reactive heart health solutions, leveraging their powerful, device-agnostic software that offers high accuracy ECG readings in consumer and medical devices alike, such as the latest versions of the Whoop and Fitbit devices.

Alan elaborates on how the recent challenges faced by Philips, a significant player in heart monitoring technology, present both a testament to the need for better solutions and an opportunity for Be Secure to make a substantial impact on the market. Alan details the company's innovative use of cybersecurity experts and detailed signal processing to develop technology that bridges consumer wellness and medical-grade ECG technology. He highlights how Be Secure's cloud-based and on-device solutions offer transformative accuracy and efficiency in heart monitoring, even earning the interest of major insurers like Blue Cross Blue Shield. The conversation turns to the scalability and swift deployment of Be Secure’s solutions in medical environments, emphasizing how their data quality can accelerate and improve diagnosis in cardiologists' workflows. Alan stresses the importance of their upcoming scale-up and commercial focus, particularly in filling the funding gap to expedite the deployment of their remarkable technology in the healthcare space.

We also learn about Be Secure's financials and investment strategy, which involves contributions from venture capital and venture debt providers. Alan emphasizes ongoing discussions with top medical companies and the anticipated rapid revenue growth fueled by the latest FDA clearance. The episode wraps with Alan addressing some practical questions about scaling, design timelines, and the lifecycle of deals with their partners, giving a comprehensive view of Be Secure's promising future. For more updates and opportunities to engage with Alan and Be Secure, stay tuned to Investor Connect. 

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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Early Stage Traction

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

In the very early stage of the life of a company, traction can be more than just revenue growth

Here are some key traction points to look for.

The founder has an idea.

The founder has an idea and a pitch deck.

The founder has an idea, a pitch deck, and an MVP or minimum viable product

The founder has an idea, a pitch deck, an MVP, and a customer.

The founder has an idea, a pitch deck, an MVP, and a customer with revenue.

The founder has an idea, a pitch deck, an MVP, and a customer with revenue that is growing.

The founder has an idea, a pitch deck, an MVP, a customer with revenue that is growing, and a repeatable process for signing up customers.

By breaking the early stage into phases, one can better understand if the startup is making progress.

Startup investors look for signs of traction and momentum in the deal before investing.

Consider this more nuanced version of traction in assessing very early-stage startups.

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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Why Now?

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

In raising funding, it’s important to instill a sense of urgency in the fundraiser.

One of the key elements is describing why now is the right time for this fundraiser.

Follow these steps to show how everything is aligned for success:

The team is experienced and in place.

The product is ready and has been validated.

The market is ripe for disruption.

The window of opportunity has been opened by a recent event.

An inflection point now gives the startup an advantage over the competition.

Show how all the elements have lined up to make this a successful endeavor.

It’s important to show the why now, as investors may assume that the startup can raise funding at any time.

Make it clear, now is the time to pursue this opportunity.

The chance of success is at its greatest.

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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Build Your Presence With a VC Fund

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

In raising funding from a VC fund, it’s important to understand the partner team.

Each VC fund has a number of senior partners, junior partners, and others such as analysts and scouts.

One of the partners will bring the founder to a weekly group meeting of the team to hear pitches from the founders.

The partner bringing in the founder is the advocate.

The founder pitches to the team.

The team discusses and decides to pursue or pass.

This process can play out over several weeks.

The advocate’s job is to convince the team that they should pursue the startup.

The founder’s job is to arm the advocate with updates and information to help close the team members.

Each team member has their own list of founders they want the fund to support.

The advocate must bring compelling information and overcome objections from others.

In raising from a VC fund, provide your advocate with enough ammunition to build your presence within the VC fund.

It’s helpful to know more about the team and their careabouts.

It’s a must to always go through your advocate.

Consider these points when raising funds from a VC fund.

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 Say No to a Startup

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

Investors receive pitches from startups almost every day.

Many of these startups simply don’t match the investment thesis of the investor.

Here’s how to say no to a startup.

Respond with the same level of effort that the founder put into the outreach.

For an automated email, simply don’t respond.

For a personalized email outreach, respond with a message “thank you for your outreach, this doesn’t fit our investment thesis.  We look for” and explain your target area.

For a warm introduction, respond with what you like about the deal, but admit this doesn’t appear to be a fit.

It’s often the case that the founder will come back with more information.

In this case, respond with feedback on how to make the deal more interesting.

If the deal is missing key information, then advise the founder to include those key points.  

This provides value to the interaction between the investor and the founder. 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

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In this episode of Investor Connect, Hall T. Martin talks with Mike Sloan, CEO and founder of Simple Labs, about their groundbreaking product, Cogni. Mike shares insights from his background in both bourbon and wine country, emphasizing the industry's challenges such as significant losses from evaporation and spoilage. Cogni offers a comprehensive barrel monitoring solution, leveraging real-time data to optimize quality, efficiency, and profitability. The discussion spans their impressive ROI, their expansion plans across various spirit and wine markets, and their substantial growth potential, backed by existing patents and no direct competition. Mike also highlights their successful beta testing with major brands and raises the company's anticipated Series A funding to accelerate growth.

Following Mike's presentation, Hall introduces Andrew Dahl from Biomes, who presents their end-to-end technology for diagnostics that captures raw patient samples and delivers lab-quality results with ease. Andrew emphasizes the uniqueness of their platform, which converts existing FDA-approved lab tests to point-of-need or at-home use, making sophisticated diagnostic tests accessible anywhere. The discussion includes their first-to-market canine Alzheimer's urine test in partnership with Hill's Science Diet, the team's extensive expertise, and their strategic business model targeting global brands for further growth. Together, Mike and Andrew showcase how innovative technology can revolutionize traditional industries, providing efficient, real-time solutions to long-standing challenges. They both illustrate the importance of having a strong, knowledgeable team and the strategic partnerships necessary for scaling and achieving success in the competitive market landscape.

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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Don’t Play the Scenario Game in the Pitch

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

Founders are confronted with many options for their fundraising.

If they raise more, they can achieve more milestones.

If they raise less, they can achieve fewer milestones.

Some founders play out these scenarios in the pitch to investors.

This is a mistake.

Multiple scenarios of varying amounts of funding with differing outcomes only confuse the investor.

Investors often try to figure out what the startup is doing.

Adding complexity with several fundraising options only makes the process harder.

It’s best to choose a fundraising amount and decide what can be done with it.

Present this to the investor.

If multiple investors indicate this is not the best path forward, then consider changing it.

It’s okay to have multiple versions of the pitch, each geared to a different investor type.

Choose the appropriate version of the deck for the one you are pitching.

Avoid the multiple-scenario game in the 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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Raising a Series B Round

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

In raising a seed or Series A round, the story carries the fundraising pitch.

Investors in those rounds are looking at a seven to ten-year trek to the exit.

In Series B, the time to exit is much shorter.

The fundraising pitch here focuses on the numbers.

The Series B deck shows the repeatable, predictable process that generates money.

Investors expect all the systems to be up and running and the bugs to be worked out.

This means putting a process on every program and a funnel on every output.

The Series B fundraise goes faster than the seed.

The investor’s focus shifts from the pitch deck to the data room.

Make sure your data room contains all the relevant information about the deal.

View your data to predict what questions the investor will ask. 

Key questions from the investor focus on growth capacity.

Without any more funding, how far can you go with revenue growth?

What will be the limiting factor?

How far will each fundraising dollar take you?

The pitch deck for seed and Series A shows how you will sell the product.

The Series B deck shows how you will scale it by highlighting the drivers behind cost and revenue.

Consider these points for your Series B 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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European Waterfall Model

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

Venture capital funds use different payback structures.

Each varies the structure for how the Limited Partners receive their returns.

The European waterfall model does not pay back the carried interest to the general partners until the limited partners have received all their capital and return.

The American waterfall model pays the general partners on a deal-by-deal basis.

This spreads the risk over several deals and throughout the life of the fund.

The American model works at the deal level.

The European model works at the fund level.

The American model gives equal precedence to the managers and the investors.

The European model gives precedence to the investors.

Other factors to consider include the carry rate and the management fee.

In raising funds, consider the payback structure for the 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 Performance-Based Valuations Work

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

In startup funding, the valuation is often fixed and does not change.

Performance-based valuation changes the valuation if certain conditions are not met.

Here’s how performance-based valuations work:

Let’s take an example.

The startup proposes a valuation of $10M and forecasts revenue to reach $1M by the end of the year. 

The investor agrees to a $10M valuation.

If the startup does not achieve the revenue forecast, then the investor claws back some of the equity. 

In the example, if the revenue falls short, then the valuation goes from $10M to $8M.

The startup must achieve certain performance requirements to maintain the valuation.

This provides an incentive to the founder to achieve the milestone promised to the investor.

This compensates the investor in the event the milestone is not achieved.

Consider a performance-based valuation 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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Roadmap for Medical Device Startups

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

The path for a medical device startup is clearly defined.

In building a medical device startup or diligencing one, consider this roadmap.

Market requirements -- establish the current state of the market, including size, needs, and current solutions.

Product requirements -- define the requirements a medical device product must have to be successful with customers.

Clinical unit -- a prototype that is used to run initial clinical tests.

Preclinical validation -- initial test results with the clinical unit.

First in human test -- clinical trials with human subjects.

Clinical validation -- in human clinical test results.

CE Mark -- regulatory approval to sell a product in Europe.

First European orders -- initial sales of the product in Europe

510 K clearance -- regulatory approval to sell the clinical device in the US.

First US orders -- initial sales of the product in the US.

Break even -- sales equal operating costs.

Growth then scale -- sales continue to grow.

In reviewing a medical device startup, it’s important to know the steps ahead and plan your fundraising for 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 

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In this episode of Investor Connect, Hall Martin chats with Christopher Ezold, a partner at the Pennsylvania-based law firm Wisler Pearlstine, which specializes in business, employment, and corporate law. Christopher dives deep into the fiduciary duties of board members, emphasizing the duty of care, loyalty, obedience, and confidentiality.

He explains that these duties are crucial at every stage of a company’s lifecycle and discusses the complexities that arise when board members have conflicting interests, particularly in startups seeking venture capital investments. Christopher highlights the importance of having a diverse board, the significance of transparent documentation, and the hazards of self-interested decisions by board members. 

Additionally, he touches on the repercussions of failing to meet these duties, ranging from shareholder lawsuits to regulatory sanctions and loss of trust among stakeholders. Hall also brings up a personal anecdote about dealing with a CEO who manipulated the board for self-benefit, with Christopher offering actionable advice on handling such situations.

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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Building the Competition Slide

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

The startup pitch deck should contain a competition slide.

Some founders start the pitch with, ‘we have no competition’.

Avoid this, as investors will interpret this as if there is no market.

The purpose of the competition slide is to show your competitive advantage.

What do you have that others don’t have?

It’s important to know your market and the players within it.

It’s also key to know what customers value -- price, performance, other?

Here are the steps in building the competition slide:

List out the direct competitors -- those who compete with you head-on.

List out the indirect competitors -- other options the customer has, such as doing nothing.

Show your market positioning -- where do you stand relative to others.

Call out your differentiation -- how you are unique.

Show potential competition that may arise.

Show the product from the customer’s point of view.

If possible, define your competitive advantage with numbers.

For example, our product reduces cost by 3X.

Use these steps to build your competition slide.

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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Party Rounds – Going Without a Lead Investor

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

In raising funding, many founders believe they can’t raise funding without a lead investor.

At the seed level, this is not necessarily the case.

Founders should launch their fundraising campaign with a convertible note so it’s easy for the investor to join the round.

Since valuation is not set, there’s no need for a lead investor to start it.

There is a valuation cap, but this means the valuation will be set later.

At the seed level, it can be hard to agree upon valuation, so it’s best to set it when there’s more information available.

Founders can fund their early rounds without a lead investor.

At the seed level, founders can find enough funding to close the round.

This is called a party round.

Many but not all investors will provide support to the startup.

In launching a Series A raise, one should start with a convertible note to pick up funding from investors while in pursuit of a lead investor.

Consider a party round for your seed 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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