Always Have a Customer Update

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 show progress with customers.

In each interaction with an investor, bring up new information about a customer.

Investors care less about how the product works and more about how the customer is engaging with the product.

In each update, show new information about the customer interaction.

Here’s a list of customer updates to consider:

A list of care abouts from the customer for a solution.

A product specification.

The customer’s test results of the startup's product.

The startup’s pitch to the customer to buy the product.

The price negotiation for buying the product.

The customer’s buy rate and retention rate.

The customer’s comparison of the startup's product with a competitor's product.

Additional features the customer wants from the product.

How the product fits into the customer’s workflow.

Investors want to know how well the product works for the customer to understand product-market fit. 

Always have a customer update when talking 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.

_________________________________________________________

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Ideal Size of a Due Diligence Team

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

Due diligence works best when it’s a shared endeavor.

It can take a substantial amount of time to diligence a startup.

The ideal size of a due diligence team is six people.

Here are the key roles and responsibilities of the team:

The lead.

Takes responsibility for the overall diligence process and typically recruits the others on the diligence team.

Sales, marketing, and competition.

Investigate the sales of the startup, as well as the marketing strategy and the current competitors.

Financials.

Reviews the financial pro forma, income statement, and balance sheet to understand the financial health of the business.

Product and technology.

Reviews the status of the product and the technology underlying it.

Team.

Reviews the skills of the team and the commitment of each one to see if it meets the needs of the business objectives.

Terms sheet.

Builds and negotiates the terms sheet, including the valuation.

Consider joining an angel network to find others to help with due diligence.

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, host Hall Martin engages with Ron Ondechek Jr., a seasoned investment executive and the founding managing director of South Highland Ventures LLC.

With over 15 years of experience and a track record of leading more than 100 transactions totaling over 1 billion dollars, Ron shares insights on South Highland Ventures' investment mandate, deal sourcing, and diligence processes. He discusses the firm's strategic partnerships, including collaborations with family offices like Nova Stone Capital Advisors, to secure proprietary deal flows in the low mid-market acquisition fund sector. Ron emphasizes the importance of aligning motivations, communication, and the ability of entrepreneurs to navigate markets and work effectively as a team to ensure successful investments and growth. Drawing from his extensive experience,

Ron also highlights key factors that contribute to consistent value creation and pitfalls that destroy value in venture capital and private equity spaces. The conversation delves into specific strategies for working with under-recognized markets and mid-market companies, the importance of operational improvements, and the structure of search fund acquisitions. Ron also touches on the balance necessary in structuring deals, ensuring fair compensation and alignment of interests among all parties involved. For more insights and to connect with Ron, you can reach him via email or phone as provided in the show notes. 

Visit South Highland Ventures LLC at shvllc.com/   

Reach out to at www.linkedin.com/in/rondechek/  

_______________________________________________________

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Good Design Techniques for the Pitch Deck

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

The pitch deck is the primary tool in fundraising.

It’s important to develop a pitch deck that’s clear and engaging.

Here are some key techniques to improve the design of your pitch deck:

Use graphs and charts to show numbers and data.

Increase the impact of the data through charts with bold lines and colors that stand out.

Use colors and contrast to highlight key points.

The colors should be consistent with the color theme of the deck, which should complement the startup's logo.

Choose a font that’s clear and legible. 

Avoid big blocks of text and break paragraphs down into bullet points.

Align the style of the pitch deck with the startup and its mission.

Use glyphs and other design elements to communicate the message.

Add background images to create additional effects.

Show how the product works using a 3 to 4-step sequence.

Create a flow in the deck to tell the startup story in a seamless fashion.

Consider these steps in adding good design to 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.

_______________________________________________________

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How To Invest in Vertical SaaS

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

Vertical SaaS is a recurring revenue business that focuses on a specific application or a narrow vertical sector.

By narrowing the scope of the target application, the startup can focus its efforts more effectively on solving the problem.

Here are some key points to consider in investing in a vertical SaaS play:

While the target application may be narrow, make sure the market is big enough to support a venture business.

A vertical SaaS business starts with a specific application to win a place in a customer’s business.

Once inside, the vertical SaaS seeks to take on additional applications.

Later, the vertical SaaS business can extend to other businesses connected to the customer.

The key to a vertical SaaS play is to have a control point in the business, such as the core customer data, or an efficient platform for managing applications, or a technology such as Artificial Intelligence.

Once established, the control point opens the door to other areas in the customers’ business. 

Investors should look for the control point to see how the vertical SaaS play will grow.

Vertical SaaS businesses require less capital to launch and scale.

This reduces the amount of funding the startup needs to raise.

Consider these steps in investing in a Vertical SaaS 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 

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Advisor Shares

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

Startup founders can find additional support through advisors.

Advisors are typically experienced operators who previously ran a startup and now provide coaching and consulting services.

The startup brings in an advisor to coach on areas that are unfamiliar to the founder.

They often have industry connections, sales experience, or funding contacts. 

The advisor should have enough time and experience to provide value to the company.

Advisors are compensated with advisor shares.

They earn them over time through vesting with their consulting work rather than their investment dollars.

Advisors typically aren’t in a position to be an employee through lack of time on their part or lack of resources on the startup's part.

Compensating with shares incentivizes the advisor to do their best, as they’ll receive their payout when the company exits.

Equity shares paid to the advisor are typically a quarter to half of one percent of the outstanding shares.

These shares vest over a one to two-year period, typically without a cliff.  

This means the shares start vesting immediately.

It’s best to sign one-year agreements and no longer, as the startup will grow and its needs will change.

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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Impact of VC on the Entrepreneur Ecosystem

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

Venture capital plays a key role in entrepreneur ecosystems.

The VC sits at the nexus of startups, innovation, and entrepreneurship.

While not all startups receive VC funding, most startups seek investment from the VC.

Here is how the VC impacts the entrepreneurial ecosystem:

Providing funding for startups with venture-level potential.

Applying business skills to early-stage startups that may have inexperienced founders.

Attracting capital to the ecosystem.

This means drawing other investors into the ecosystem to provide funding. 

Networking the key players in the community together.

VCs foster needed interactions between startups, providers, and investors.

Creating new jobs for the ecosystem.

Funding creates new jobs that propel the startup forward and grow the ecosystem.

Fostering entrepreneurship and innovation.

The VC catalyzes the development of new products and business models.

Venture capitalists help spur the growth of entrepreneurship.

Consider attracting key venture capitalists to your entrepreneur ecosystem.

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 Write Concise Investor Updates

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

Founders should keep their investors up to date on the business. 

Investor updates on a regular basis are important.

Here are some key elements to include in your investor update:

Remind the investor what you do in one sentence.

Investors often have dozens of startups ongoing, so it’s helpful to remind them.

Start with the current month’s focus for the team.

Talk about wins as well as losses.

A few bullet points on each should suffice.

Next, show the metrics for key areas such as cash, revenue, and product development.

Discuss the team by showing who is coming and who is going.

Indicate where you need help at this moment.

Give a shout-out to those investors who helped you in the past month.

This will encourage other investors to contribute.

Summarize each topic into one sentence.

This gives the investor an overview in a short amount of time.

The investor update should show them how they can help.

Finally, always be open and honest with 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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In this episode of Investor Connect, Hall Martin welcomes Uli Chettipally, a distinguished physician, researcher, and healthcare innovator from Burlingame in the San Francisco Bay Area. Chettipally shares his journey and expertise in driving physician-led innovation and collaboration through his firm, Innovator MD.

He discusses how frontline medical professionals can identify unmet clinical needs and develop scalable solutions with the support of specialized education and networking opportunities provided by Innovator MD. 

The conversation delves into the challenges and opportunities in funding healthcare startups, the role of AI and data in improving patient outcomes, and the importance of involving physicians early in the innovation process for realistic and effective healthcare solutions. Chettipally also highlights his new venture, Sirica Therapeutics, aimed at revolutionizing autism treatment, and urges listeners to connect with him on LinkedIn for further collaborations.

Visit InnovatorMD & Sirica Therapeutics at www.siricatx.com/ 

Reach out to at www.linkedin.com/company/sirica-therapeutics/ 

_______________________________________________________

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

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The Challenge With Solo-Founder Startups

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

Many investors avoid investing in startups with a solo founder.

Here are some reasons why:

The company is at risk in case something happens to the founder.

There’s no one there to pick up the business.

The lack of additional founders often means the company has limited growth potential.

It takes multiple skills and people to grow a business.

It takes longer for the startup to accomplish the work because there is only one founder.

The solo founder startup has fewer family and friends for funding.

Early-stage funding is built on the founders' network.  

The fundraising takes longer as there’s only one founder to hold the meetings.

Multiple founders can cover more ground in following up with investors.

The startup has limited resiliency.

With more founders comes a stronger base to lead the company.

For startups with a solo founder, consider building a more robust team around the founder to avoid these issues. 

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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Incentives for Investors

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

Closing the fundraiser can sometimes be a challenge.

In down markets and uncertain economic conditions, investors hesitate to commit.

Consider incentives for investors to move the fundraising to a close.

Here are some key incentives:

Offer advisor shares to investors who invest above a minimum amount.

This gives the investor additional shares in return for their support.

Negotiate the value of the advisor shares based on the work the investor will provide.

Offer warrants to investors who invest within a certain time period.

Warrants give the holder the right to additional shares.

Finally, consider adding preferences to the terms sheet for investors who come into the round.

Preferences give the investor dividends, which in most cases will be accruing rather than paying out.

Put a deadline on the incentives to move the investors to action.

Consider a deadline in the 1-2 month range.

Consider these incentives to close investors to finish the 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 

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How To Answer Questions You Don’t Know

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

Investors ask many questions of startup founders.

Founders should know their business and, in particular, their numbers.

Sometimes an investor will ask a question that the founder doesn’t know.

Here are some key steps on how to answer questions you don’t know the answer to:

First, make sure you understand the question.

Probe to find out more about it.

If it’s a question requiring a simple answer that you don’t know, then state you don’t have it readily available, but that you will find it for them.

If it’s a deeper dive question, then break the question down into separate components and open a dialog on the subject.

Explain what you know so far.

Describe what you’re doing to learn more in this area.

List what you hope to accomplish with the answer.

Invite feedback on what to do as well.  

While this may not answer the question in a succinct fashion, it shows how you are approaching the situation.

Use the question as an opportunity to show you have a plan.

Demonstrate what you have done so far on 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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How To Perform Technical Due Diligence

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

Investors perform diligence on a startup before investing.

Most of the diligence focuses on the financial aspects of the business.

Technical diligence is just as important.

For startups, it’s also important to focus on the technical aspects.

Here’s a list of areas to review for technical due diligence:

Architecture

Review the technical architecture for scalability and robustness.

Check the architecture for fit with the application.

Code

Review the code for quality and documentation.

Are there processes for testing and verification?

Security

Review the code for security measures.

Perform penetration exercises to check its strength.

People

Interview the technical team for their technical background and skills.

See if the skills match the project requirements.

Intellectual property

Review the intellectual property to see if the key technical features are covered.

Consider these steps in performing technical due diligence on a 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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Benefits of Family Office Funding

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

Family offices bring many benefits over other investor types as a funding source.

Here’s a list of reasons why family offices should be considered for your fundraising:

Family offices have deeper pockets than angel investors.

This allows them to make more follow-on investments.

Family offices are not tied to a ten-year fund cycle as venture capitalists are.

This allows them to be more patient for the exit. 

Family offices will fund deals outside the traditional venture model.

This provides capital for a wider variety of startups.

Family offices typically don’t have a Limited Partner base to appease.

This allows them to invest at other times in the startup's life cycle.

Many family offices have deep experience in business.

This gives the startup another source of mentorship for growing their business.

Family offices can take the role of a passive investor.

This gives the startup the freedom to take the company in the direction they want.

Consider these benefits of taking family office 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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In this episode of Investor Connect, Hall Martin welcomes Abe Kwon, a partner at Lowenstein Sandler, LLP, a renowned national law firm with a strong focus on emerging companies, venture capital funds, and investors. Abe Kwon shares his extensive experience as a startup venture capital lawyer and provides key insights into the critical legal considerations for early-stage fundraising, especially regarding venture capital, SPACs, and alternative capital vehicles.

The conversation delves into best practices for governance and board structuring as companies grow, emphasizing the importance of trusted legal counsel in navigating these complex waters. Abe Kwon discusses the growing trend of cross-border investments and the complexities early-stage startups face when hiring contractors or employees abroad. He highlights the resurgence of crypto and digital securities, providing his perspective on evolving legal requirements and the importance of staying updated with regulations. The episode also covers strategies for preparing for M&A and IPO events, stressing the importance of having a solid legal framework from day one to ensure smooth exits.

Abe Kwon shares lessons learned from challenging deals and offers practical advice for founders in choosing the right legal partner and preparing for due diligence. The discussion wraps up with an exploration of trends in the ESG and impact investing space and how legal frameworks are adapting to sustainability-based capital. Abe Kwon also touches on his involvement in national innovation ecosystems and the impact on local startup communities. 

Visit Lowenstein Sandler LLP at www.lowenstein.com/

Reach out to at www.linkedin.com/in/abekwon/; akwon@lowenstein.com

_______________________________________________________

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How To Hone Your Deal Selection Process

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

Investors funding startups go through a great number of deals to find the ones to fund.

The investor won’t know for several months or years if the deal is going to work out or not.

The startup’s fundraising is typically over after six months or a year. 

The investor often brings their personal business experience to the selection process.

For startups, this may or may not be the best way to screen startup deals.

Markets and technologies change over time, so it’s important to keep up to date with one's selection process.

Here’s how to hone your deal selection process:

For the next twenty-five startups, write out which ones you would invest in and why.

Do the same for those you would not invest in and state why.

Revisit those twenty-five startups three to six months later to find out what happened to them.

Compare their outcomes with your written projections. 

This will tune your selection process by giving you more factors to consider.

From time to time, hone your selection process to find out what’s working in the startup world and what is not.

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 KISS Note

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

KISS in the startup world stands for Keep It Simple Security.

It’s similar to a convertible note.

Here are the differences between a KISS and a convertible note:

The KISS gives the holder the right to participate in future funding rounds.

Convertible notes only convert the current debt into equity.

The KISS gives the holder a “most favored nation” clause, which means the holder gets the best terms of any investor in the round.

The KISS gives the holder additional liquidation preference rights.

Convertible notes give no liquidation preferences.

The KISS note is more investor-friendly than a convertible note.

In addition, the KISS note provides representation and warranties, which means the founder has disclosed all relevant information and is liable if not.

The KISS can be transferred to others without permission from the founder.

The KISS, like convertible notes and SAFE notes, is easy to use and simple to apply. 

Consider a KISS note for your fundraiser.

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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Under Promise, Over Deliver

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

In fundraising, the startup founder should underpromise and overdeliver to the investor.

Here are some key areas to apply this:

Forecasting.  

Most founders overpromise and underdeliver on their sales forecast.

Instead of over-promising on the revenue results, forecast a lower number and then show how you exceeded the forecast.

Planning.

Most founders overpromise on their progress in building products.

Instead of overpromising, set a less aggressive goal and show the investor how you are ahead of plan.

Hiring.

Most founders set an aggressive goal for how many team members they need.

Instead of hiring the full headcount, show how you accomplished the goals with a smaller headcount.

Fundraise.

Most founders set ambitious goals for their fundraisers.

Instead of proposing the ideal fundraising timeline, set a lower goal.

In the updates to the investor, show how you are ahead of schedule on the raise.

Apply these steps to under-promise and over-deliver to the 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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How To Use Framing in Your Pitch

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

In pitching investors, framing can be used to position the startup as a successful business.

Framing is how you structure your message to shape how your audience perceives it.

It can be used to generate credibility and overcome objections.

Start with a problem statement and a compelling solution.

Position the team as credible and trustworthy.

Articulate the benefits of the solution throughout the pitch.

Show how it aligns with the goals of the investor, which is to make a return.

Contrast is a framing technique.

Use it to show the difference between the current problem and the promised future of the solution.

Start with what you want the audience to think and work back to the solution that creates that result.

Positioning is another framing technique.

Use it to place your startup as superior by showing the competitive advantage.

Use framing in your fundraising 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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For Investors check out: https://tencapital.group/investor-landing/ 
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The Myths of Biotech Investing

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

Biotech investing differs from tech investing.

There’s often no revenue traction to assess.

The startup must navigate the FDA path while dealing with cutting-edge devices and therapeutics.

Here are some myths of biotech investing:

Myth 1-Biotech startups are building companies.

In many cases, the biotech startup will sell during the clinical trials or at FDA approval.

They rarely proceed to launching a business.

Myth 2- Biotechs take much longer than tech companies to exit.

Most biotech startups exit in the 3 to 5 year range, which is often shorter than tech companies.

Myth 3- Regulatory is the key hurdle to overcome.

In reality, it’s proving the therapeutic works.

Most drugs fail in clinical trials and never reach FDA submission.

Myth 4-Reimbursement is the key to a successful biotech therapy.

In reality, it’s showing value to the physician and patient through high efficacy and low toxicity, which is the key to success.

Consider these myths in analyzing biotech startups for 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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In this episode of Investor Connect, Hall Martin speaks with Rachna Dayal, a global health biotech and venture investment expert, founder of Sugati Ventures. 

Rachna shares her transition from corporate roles at Johnson & Johnson and Philips to founding and running a venture fund focused on transformative health tech startups. She talks about the major differences between working in large corporations and managing a small VC fund, emphasizing the importance of flexibility and addressing high unmet needs in healthcare through innovative solutions in medical devices and AI-enabled platforms. 

Rachna highlights her investment thesis around consumer-first, purpose-led brands, particularly focusing on life-saving devices and enhancing quality of life, and discusses the crucial role of founder-market fit and diverse backgrounds in fostering innovation in the healthcare space. She also touches on current trends such as the rise of AI in healthcare and the impact of economic conditions on venture capital, offering advice for new investors and emphasizing the need for perseverance during tough times in the investment landscape. 

Visit Sugati Ventures at sugativentures.com/

Reach out to at www.linkedin.com/company/sugati-ventures/

_______________________________________________________

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

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How To Close a Strategic Investor

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

Strategic investors are large companies that use startup investments to further their business objectives.

They rarely invest to make a financial return.

They fund startups to stay abreast of new technologies and markets.

They often invest in advance of buying the startup.

To close a strategic investor funding, consider the following:

The investor doesn’t care about the market size, competitor analysis, or go-to-market.

They care about furthering their own strategic goals.

Align the presentation with how the startup will help them reach their objectives.

Focus the effort on building products and testing markets that are important to the strategy.

Use these tools to gain an introduction to the key people at the strategic level and their priorities.

Point out the key value propositions of the startup and where they should look for entry points into the market. 

Identify the key decision makers and keep them informed of your progress.

Be patient with the corporate process, as it will take time. 

There’s typically a small number of people focused on funding startups at their company, so don’t expect significant resource commitments.

Consider these steps in closing a funding round from a strategic corporate partner. 

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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Tips on How To Follow Up

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

In raising funding, investor follow-up is the critical work of the campaign.

Timeliness is a key factor.

Each day that passes without the follow-up degrades the value of the interaction.

Here are some tips on how to follow up with investors:

After a pitch, set up a follow-up schedule starting with the day after the pitch.  

Then repeat the follow-up three days later, one week later, and two weeks later.

This keeps the founder top of mind.

Each follow-up provides new information about the business and how it is doing.

Use the follow-up process to build a relationship with the investor.

Set up a system to track investors and plan out updates.

Take casual conversations with investors and turn them into coffee meetings to discuss further.

Take investor questions seriously and answer the next day.

Send a thank-you note to those who made an introduction and the results that came from it. 

Timeliness of follow-up is as important as the content provided.

Consider these tips on how to follow up with 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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For Investors check out: https://tencapital.group/investor-landing/ 
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Best Practices in Raising a microVC Fund

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

In raising a microVC fund, consider the following:

It takes 12 to 18 months to raise an initial fund.

Most funds start off in the $10M to $25M range.

With a successful funding record, one can move up to the $35M to $50M range.

Limited partners will be family offices and high-net-worth individuals.

In raising funds, consider these best practices:

Show how your fund is unique and differentiated from other funds.

Make clear the vision for the fund and what it will accomplish beyond the return to the investor.

Show the competitive advantage of the team and its network. 

Highlight the track record of the team in deploying capital. 

Look for an anchor investor who will lead the fund and place a sizable amount to start.

Build out the team so the fund is not a solopreneur endeavor.

Fund closings range from 3 to 5 rounds over the course of the raise.

Give incentives to investors to join the fund, such as access to direct investments that are doing well. 

Consider these best practices for your microVC 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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Investors Want To Know How the Business Will Be Successful

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

Most first-time startups pitch their product to the investor rather than their business.

They often spend a great deal of time on how the product works.

Investors want to know how the business will be successful, not how the product works.

Shift the focus on the product from how it works to how it enables business success.

Describe how the business will create the product at a reasonable cost.

Show how customers will discover it and what steps the business will take to make them successful with it.

Discuss how the product impacts the customer, such as saving them time, money, or effort.

Show the monetization model and how customers will pay for it.

Show why the customer will continue using it over time.

All of these elements point to a successful business.

Focusing on how the product works misses the point the investor seeks.

Instead, show how the business will be successful.

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 LPs Look for in First-Time Fundraisers

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

Limited Partners investing in venture capital funds are similar to startups raising funds from venture capitalists.

In pitching LPs to invest in a fund, include the following:

They need to know the basic context of the fund.

Show the sector, stage, investment thesis, and the target fund amount.

Summarize this information so it’s clear and easy to find.

Show why the target sector is ripe for investment today.

Investors want to know the track record of the team.

While the team may not have raised funds before, they must have experience with funding startups, such as angel investing.

Show the track record from this work.

Showcase the team’s diligence process and how they screen and analyze startups.

Articulate the team’s competitive advantage.  

This is most often from their network of who they know.

Include the cost of the investment, such as management fees and carried interest.

Note the payback terms to the VC and when it starts.

This is often after the investor receives their initial investment back.

Showcase this information in summary form on the first slide of the deck, as investors will want to know more before digging into the details.

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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