Investor Connect Podcast

Key Elements of a Purchase Agreement

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

In selling your business, the purchase agreement outlines the key terms.

It’s important to review it carefully.  

Here are some points to consider when evaluating a purchase agreement:

Check the definitions section to understand what the key terms mean.

Review the price and how payment will be made. 

There may be price adjustments impacting the price such as working capital requirements.

Review the warranties and representations section carefully for what you are representing about your business.

Review the indemnification clause which states what happens if the warranties and representations are not met.

Consider the termination provisions which state what conditions cancel the deal.

Typically, there are fees associated with a breakup.

The closing conditions list the requirements for what must be met to consummate the transaction.

Finally, the covenants section outlines what each party must do during the transaction process.  

Review each of these sections carefully as they impact the completion of the buyout.

 

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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Category:general -- posted at: 5:00am CST

How to forge genuine connections with angel investors and family offices? How can AI integration revolutionize healthcare?

If you are interested in these questions this episode is for you! Welcome to another episode of Investor Connect - How to Raise Funding Series, with Hall T. Martin. In this episode we discuss effective strategies to build strong networks with angel investors and family offices. We also share how companies can generate a sense of urgency and excitement among potential investors.

How does Ten Capital work? In this episode, we explain how Ten Capital helps startups raise funds from a variety of channels, especially angel groups and family offices. Emphasizing the importance of recurring interactions with potential investors we provide a rich insider perspective on the startup funding landscape. 

What are the benefits of integrating AI into healthcare models? We discuss the unique challenges and possibilities it opens up. From automating image acquisition to providing live feedback, the power of AI is a game-changer for healthcare startups.

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Category:general -- posted at: 5:00am CST

Characteristics of an Interested Investor

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

In selling your business, check the buyer’s interest in the deal.

Here are some key points to look for:

The buyer accesses the data room to review key information.

Questions from the buyer indicate they are looking for alignment in the company and not just shopping for general information.

The buyer remains engaged in the transaction process and does not put it on the back burner.

The buyer demonstrates interest in the relevant parts of the business and doesn’t side-track on secondary details.

The buyer doesn’t make excuses for delays.

The buyer doesn’t waste your time asking for the same information already provided.

The buyer doesn’t use the diligence process solely to negotiate better terms.

Look for a buyer who is honest, efficient, and transparent in their 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 

Check out our other podcasts here: https://investorconnect.org/ 
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Category:general -- posted at: 5:00am CST

Price and Terms of the Deal

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

In negotiating the M&A transaction both price and terms will be discussed.

While the top-line buyout number is the main focus, the underlying terms should also be considered carefully.

Here’s a list of terms to review:

Payment amount -- how much and when will the payout occur?

Who gets paid -- payment goes to those on the cap table but there may be other factors at play.

Payment structure -- how you structure the deal with regard to taxes and the legal entity of the company is a key factor to consider.

Employee impact -- what is the plan for integrating the companies and how will it impact the employees?

Customer impact -- in the event the buyout is to shut down a competitor then consider how it will impact those customers.

Earnouts -- In the event of an earnout, the payment could be higher if sales targets are met.

The top-level price is important, but the underlying terms often determine if it is a good deal or 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 

Check out our other podcasts here: https://investorconnect.org/ 
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Category:general -- posted at: 5:00am CST

The Letter of Intent in M&A

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

In an M&A transaction, the letter of intent or LOI defines the general terms of the deal.

Here are the key components of an LOI:

Key players -- define the buyer and seller in the deal.

This makes clear who is buying whom. 

High-level overview -- defines the structure and key numbers for the transaction including earnouts and timelines. 

This also includes cash versus stock offers and general terms of the deal. 

Diligence -- this gives a general indication of diligence to be done.

These tend to be standard boilerplate descriptions of the diligence process. 

Exclusivity -- a timeframe for the buyer to perform diligence.

The seller cannot entertain other offers during the exclusivity period which typically lasts 90 days. 

The LOI indicates the buyer is serious and may soon initiate diligence. 

It’s a key milestone in the M&A 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 

Check out our other podcasts here: https://investorconnect.org/ 
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Category:general -- posted at: 5:00am CST

Understanding the Buyer’s Strategic Roadmap

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

In selling your business, it’s important to understand the buyer's strategic roadmap.

Here are some reasons why you should know it well:

You can position your business for acquisition more effectively if you know how your business fits into the buyers’ roadmap.

You can communicate the value proposition of your business better.

You can adjust the risk-reward characteristics of the acquisition to fit the roadmap.

You can show your business has a competitive advantage over competitors.

You can better show how your business is synergistic with the buyer’s business.

You can provide multiple scenarios for how to merge your business into the buyer’s business.

You can provide a better integration path by knowing the buyer’s business.

Research the buyer’s strategic roadmap with these points in mind. 

 

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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Category:general -- posted at: 5:00am CST

Ideal Buyer Characteristics

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

In selling a buyer on acquiring your business, you’ll want to create an ideal buyer profile.

Here’s a list of characteristics to consider when building it:

Financial vs strategic -- Are you looking for a buyer looking for a financial-only deal or one who wants a strategic fit?

Type of company -- Are you looking for a startup or a large company to buy your business?

Culture fit -- What type of company culture would best fit your business?

Capability -- Does the buyer have the capability to take over your business?

Affordability -- Does the buyer have the ability to pay for your business?

Motivation -- Does the buyer have a motivation to buy your business beyond the immediate financial gains?

Values -- Does the buyer share the same values as you?

Check these conditions for each potential buyer to see if they are a fit for your target buyers list.

 

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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Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Jean Anne Booth, CEO of UnaliWear, headquartered in Austin, TX, USA. 

Jean Anne Booth, a serial entrepreneur, brings over 30 years of high-tech experience and has raised over $100M in venture capital for her startups. UnaliWear's Kanega watch, the only 24/7 medical alert with fall detection, features a patented quick-swap battery system. Jean Anne Booth was the founder of Luminary Micro, creators of the Stellaris® microcontroller platform, which was acquired by Texas Instruments in 2009, and Intrinsity, sold to Apple in 2010.

UnaliWear’s Kanega watch is the ONLY 24/7 medical alert with fall detection, featuring a patented quick-swap battery system. The company’s patented RealFall(TM) technology is revolutionizing fall detection and response.

Jean Anne shares the importance of consistent investor communication and effective cap table management. She highlighted the untapped potential in the silver tech space, urging investors to recognize the significant purchasing power of the 60+ population and challenge cultural biases.

Visit UnaliWear at www.unaliwear.com, and connect on LinkedIn: Jean Anne Booth and UnaliWear. Follow them on Twitter: @JeanAnneBooth and @UnaliWear.

Reach out to Jean Anne Booth at jeananne.booth@unaliwear.com

_______________________________________________________

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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Category:general -- posted at: 5:00am CST

Why Build a Target List of Buyers

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

In preparing to sell your business you’ll need to build a target list of buyers.

Here’s a list of reasons for why it’s important:

Focus -- the list focuses your efforts on those who are the best fit for your business so you know who to work with.

Time -- the list saves you time by not wasting efforts on those who are not a fit. 

Price -- the list helps you maximize your selling price by focusing on the buyer’s key care.

Terms -- the list helps you negotiate the best terms for your deal.

Efficiency -- the list puts efficiency into the process by eliminating sub-optimal buyers.

Mission -- helps you achieve the company’s mission and goals by finding the right buyer.

Ideal -- helps you identify the ideal buyer providing the best outcome for the team.

Unlike fundraising in which you talk with any potential investor, selling your business requires a focus upfront on the ideal buyer list.

 

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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Category:general -- posted at: 5:00am CST

Valuation Methods for an M&A Deal

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

There are several methods for calculating the valuation of a company for an M&A deal.

Here are some key methods to consider:

Multiples of revenue or earnings -- each industry segment has a commonly used multiple based on revenue or earnings for valuing the company. 

To calculate, take several recent exits of businesses in the same industry and calculate the multiple.

Comps -- this stands for comparables and uses exits from similar companies to calculate the valuation.

To calculate, identify five companies that have the same revenue, growth rate, and monetization model and calculate the exit valuation.

Cost to replace -- this calculates what it would cost to replace the business you are selling.

To calculate, and identify the cost of development, marketing, and sales to build a company to the size you have.

Discounted cash flows -- this uses the future cash flows from the business and discounting back to today.

To calculate, make a ten-year financial projection of revenues based on the current growth rate and apply a discount rate to set the valuation.

Calculate your valuation using all of these methods to determine which one puts your business in the best light.



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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Category:general -- posted at: 5:00am CST

Factors Impacting Valuation

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

Valuation is a major issue in selling your business.

Here are some key factors impacting the price:

The size of the company buying your business -- the bigger the company, the higher the potential price.

Demand for your company -- the more buyers in the mix, the higher the valuation.

Form of payment -- taking stock will typically generate a higher selling price.

Earnouts -- the use of earnouts can increase the valuation.

Competitive advantages -- the more advantages your business has, the higher the price.

Current economy -- the stronger the current economy and market, the higher the price.

Target use of the company -- the higher the value of the combined company, the higher the buying price.

Past valuations -- the higher the valuation from previous funding rounds often results in a higher buying price.

Relationships -- the stronger the relationship with the buying team, the higher the price in some cases.

Consider these factors in preparing your business to sell. 

 

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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Category:general -- posted at: 5:00am CST

Financial Projections for M&A

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

In selling your business, the prospective buyer will want to see financial projections showing how you expect the company to perform.

There are three financial statements to complete:  Income statement, Balance Sheet and cash flow statement.

It’s important to develop a realistic projection.

The projections should take into account the buyer and their plans for the company.

The goal is to show how acquiring your business will help them.

The buyer may want to reduce cost, or increase sales, or maintain the status quo.

The buyer will review the financials for any outstanding obligations such as debt or accounts payables.

They will want to understand the assumptions used to build the numbers.

They want to know how much you believe in the forecasted numbers and may ask you to take ownership of achieving the forecast.

It’s important to understand why the buyer wants to acquire your company before building your financial projections.

The goal is to show how your company can help solve the buying company’s problems.

 

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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Category:general -- posted at: 5:00am CST

Financials and Key Metrics for M&A

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

In selling your business, the buyer will look for key financial metrics.

Here are some key metrics to include in your pitch:

Total revenue -- revenue before discounts, returns, and adjustments.

This shows top-line sales for the company.

Sales in units -- the number of units sold over a period of time.

This helps the buyer in estimating forecasts.

Cost of customer acquisition -- the cost to acquire new customers.

This shows how much is required to gain a new account.

Gross margin -- revenues minus cost of goods sold yields gross profit.  

Gross margin is the gross profit divided by revenues and shows how much revenue is left over for sales and marketing expenses.

Growth rate -- percent increase in sales month over month, or year over year.

This shows how fast your startup is growing 

Burn rate -- the amount of cash spent over and above the incoming revenue.

This shows how much cash is required to maintain the current business level.

Fixed costs -- the costs that are fixed regardless of the amount of units sold.

This shows the overhead required to run the business.

EBITDA -- the revenue minus the cost of goods sold and sales and marketing costs.

This shows the amount of revenue available to reinvest in the business.

Acquirers will want to see these numbers to consider buying your company.

 

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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Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Ivan Maltsev, General Partner at 3x Capital.

3x Capital is an investment and advisory firm focused on seed-stage web3 startups. Visit 3x Capital at www.3xcapital.fund.

Holding an MS in Business Law and being a PhD candidate in International Economy, Ivan transitioned into crypto investments in 2016, focusing primarily on BTC and ETH. Since 2017, he’s been actively managing his own crypto portfolio and investing in early-stage tokens.

Ivan shares the importance of education for both investors and founders in the blockchain space. Ivan highlights the challenges of talent acquisition and stresses the need for more experienced founders in the industry. That is why 3x Capital decided to launch 3x Education in order to help investors and founders to overcome challenges. Visit the website of the program: www.3xcapital.fund/education

Connect with them on LinkedIn at www.linkedin.com/company/3x-capital and with Ivan personally at www.linkedin.com/in/ivanxmaltsev.

_______________________________________________________

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

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Painting the Vision of the Value Proposition

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

In preparing to sell your business it’s important to paint the vision of the value proposition.

The value proposition is the reason a company wants to buy you.

To gain the best price you must show how your company combined with the acquirer provides a better future for the buyer.

If the buyer only sees a price based on the multiple of your revenue or assets, then the negotiation will revolve around the price for that revenue or asset.

Move the negotiation away from the revenue and assets to the vision of the combined companies.

This focuses the discussion around potential gains the buyer can achieve. 

This includes resolving current problems the buyer has or taking the buyer’s company to a new level.

Show the proposed outcome of a combined company with new capabilities and prospects.

Align the vision around the buyer’s goals and aspirations and not yours.

Articulate the branding opportunities as well as the growth prospects.

Focus the negotiation on the opportunities the combined company will bring. 

 

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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Positioning Your Business To Sell

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

In selling your business it’s important to articulate all the values in the business a buyer may desire.

Here’s a list of sources of value to consider:

The products or services generate revenue.

This includes current and future revenue potential.

The intellectual property that protects those products.

This includes trademarks, copyrights, and trade secrets.

The customer list you have.

This includes prospects and previous customers as well.

The team you have.

This includes the partner relationships you have built.

The datasets you have.

This includes any data that can be mined to improve sales or processes.

The process and programs you have built.

This includes all business functions such as sales, marketing, finance, and administration.

Make a list of all of the values in the business before launching your campaign to sell.

 

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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Category:general -- posted at: 5:00am CST

Advantages of a Self-Running Business

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

In preparing to sell your business, make sure you are setting up a business that can run by itself at some level.

Here are some key points to consider:

Make sure the company doesn’t have the founder's name on it.

Build a great team that can carry on without the founder. 

For every function in the business that requires the founder, the price will drop by some amount.

Run the business as a leader that can pass the reigns to someone else.

Setup processes and procedures so the business can continue without you.

Buyers put a price premium on self-running businesses.

Businesses that require hand holding by the founding team are priced lower.

Businesses that require the founding team to run it will require the founders to remain with the business even after the purchase.

 

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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Category:general -- posted at: 5:00am CST

Reasons To Sell Your Business

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

There are many reasons to sell your business.

Here are some to consider:

You may want to scale up to reach more customers.

By selling you can move into a business with more reach and greater resources.

You may want to see greater operational efficiency.

By selling you can join your company with partner firms to provide a more efficient operation.

You may find hyper-growth has peaked.

By selling the business you can find a place for it with another company.

You may have a once-in-a-lifetime offer.

By selling the business you can lock in a phenomenal gain.

You may find that the market has changed and fundraising in your sector is no longer viable or easy.

By selling the business you find an exit for your investors.

You may want a career path for your team.

By selling the business you create an opportunity for your workers.

You may find yourself at the end of the road with the current business.

By selling it you can focus on other things.

 

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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Direct download: Reasons_to_sell_your_business.mp3
Category:general -- posted at: 5:00am CST

Value of an Investment Banker

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

In selling your business you may want to use an investment banker. 

Here are some reasons to consider:

Investment bankers know how to prepare the dataroom and what documents will be needed for the transaction.

Most founders are new to the sell-side process.

They know how to present your business so it matches the needs of the acquirer.

Each acquirer will have a unique set of care about.

They know how to set proposed valuations for the candidate acquirer.

The valuation will change from one buyer to the next.

They understand the transaction process and what it takes to complete it.

The process for selling a business is more involved than a standard fundraise.

They have a network of potential buyers to pursue.

You want as big a network as possible to sell your business. 

They have access to investors who can fund the deal to complete the transaction.

It’s often the case you will need to raise funding to put your business into the best possible position for a sale.

Consider using an investment banker to sell your 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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Category:general -- posted at: 5:00am CST

When it comes to fundraising, do you think it's better to aim for a big round or break it down into smaller tranches? Have you experienced the power of in-person interactions in the business world? Stick around to find out which strategy might work best for your startup.

Welcome back to another episode of Investor Connect: How to raise funding series, with Hall T. Martin. In this episode, we distill crucial strategies for success, focusing on pitch deck essentials, fundraising tactics, and the power of face-to-face interactions.

It's advised to present the product, team, and fundraising goals succinctly, rather than overwhelming the audience with exhaustive details. We also talk about structuring a fundraising round with a three-tranche approach.

Take action, stay focused, and keep pushing forward. Until next time, keep innovating and chasing your dreams!

_______________________________________________________

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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Category:general -- posted at: 5:00am CST

Why Acquisitions Fail?

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

Not all acquisitions succeed.

Here’s a list of why some fail:

The buyer wants to eliminate a competitor by taking them off the market.

The acquisition was simply a means to an end and there was no intention of continuing the acquired business.

The investment thesis did not play out.

The proposed synergies of combining the two businesses never materialize.

The two companies don’t integrate well.

The proposed merger plan didn’t take into account culture differences, mission variances, and other factors that make combining the companies sub-optimal.

The company managers are not skilled at integration and make false assumptions about the prospects of a combined company.

The market conditions often change eliminating the initial thesis for merging the two companies.

Make sure you have a clear understanding of what the combined company will look like. 

 

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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Category:general -- posted at: 5:00am CST

 Why Companies Acquire Other Companies?

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

Companies acquire other companies for many reasons.

Here’s a list of potential reasons to consider:

Companies seek to acquire a customer list.  

They want to grow their business by adding more customers.

Companies seek to acquire intellectual property.

They want the IP so they can expand their technology base.

Companies seek to acquire talent.

They want to build out their team.

Companies seek to acquire new products and services.

They want to build out their product line.

Companies seek to acquire a cash-generating asset.

They want to make a financial gain. 

Companies seek to achieve a dominant position in the market. 

They want to increase their market share. 

Companies seek to acquire competitors.

They want to eliminate competition.

 

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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Category:general -- posted at: 5:00am CST

Acquirer Expectations

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

In selling your business it’s important to understand the expectations of the acquirer.

Acquirers will look for your accounting to be clean and well-organized.

Make sure your contracts, loans, and intellectual property documents are in order.

Acquirers will invest substantial time and expect you to do the same.

This could be several hundreds of hours over the next six to twelve months.

Acquirers are taking on risk and expect you to share in that risk.

A one-sided deal where one side takes all the risk usually doesn’t get done.

Acquirers expect you to focus your attention on the transaction and keep the business up and running.

Make sure your day-to-day operations are covered while you work on the transaction.

Avoid putting the acquirers in a place that makes them look bad.

Make sure you are setting up the deal so the acquiring team looks good in their reports.

 

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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Direct download: Acquirer_Expectations.mp3
Category:general -- posted at: 5:00am CST

The Founder's Exit

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

The cap table shows the ownership of the business.

It’s often the case in venture-funded startups that the founder ends up with less than double-digit ownership.

There’s the issue of liquidation preferences and other terms that pay investors before the founder.

In fundraising, make sure the founder’s position is covered and has a path to an exit.

In negotiating the sale, beware of earn-outs in which case the company must meet certain goals to achieve the stated buyout.

A typical earnout is ten to twenty percent of the buyout paid over the course of three years based on achieving sales targets.

The funds used to pay the earn-out are held in a holdback account under escrow.

The control conditions must also be negotiated as it determine who has control over the business and how much control during the earnout.

It’s important to understand earnouts as they impact the founder's exit. 

Without a founder’s exit, there’s no motivation to carry the business forward.

 

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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Category:general -- posted at: 5:00am CST

Are you curious about the future of high-end dining? You're in for a treat!

In this episode of Investor Connect, we're joined by Jim Bowen, the visionary Chief Development Officer at Debut Development Group.

Located in Toronto, Ontario, Debut Development Group is a developer, owner, operator, and consultant for high-end hotels, resorts, restaurants, and entertainment venues with worldwide experience and credentials.

They are also the Exclusive franchisee in Canada for Fogo de Chāo, the renowned Brazilian restaurant brand with plans to roll out 10 locations in Canada’s major cities, starting with Toronto and Vancouver in Q2 2024. This year, Debut is also working on the 5-star Grand Hyatt Resort in the Cayman Islands and a 5-star Lifestyle Resort in Tulum, Mexico.

Jim Bowen is a Business development professional with 30 years of experience launching and managing international businesses, primarily in the real estate development and commercial design industries. His involvement in commercial real estate developments internationally has given him a unique perspective on fresh concepts for mixed-use retail developments.

Jim discusses their exclusive franchise with Fogo de Chão in Canada and their plans to open 10 locations. He emphasizes the importance of creating a unique dining experience, especially in the competitive restaurant industry. Jim also highlights the profitability of Fogo de Chão restaurants and their focus on accommodating various dietary preferences. He addresses challenges in the restaurant industry, including fluctuating ingredient costs.

Visit Debut Development Group at www.debutrends.com/, or www.linkedin.com/company/debutrends/?originalSubdomain=ky.  

Reach out to Jim at jim@debutrends.com, https://www.linkedin.com/in/jimbowenasia, jbowen@fogodechaoca.    

_______________________________________________________

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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Direct download: Jim_Bowen.mp3
Category:general -- posted at: 1:49pm CST

Make a List of Target Acquirers

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

It takes twelve months to sell a business.

The first six months will be spent finding the buyer.

The second six months will go to completing the transaction.

To find the buyer consider the following:

Start with a list of 250 companies and the names of their CEO and VP of Corporate Development as potential buyers.

If you have a list of companies that have enquired about buying the business before, then include them as well. 

Choose companies with a strategic interest and consider it broadly.

Reach out to the CEOs by email stating your interest in selling the business.

This should generate forty to fifty calls and meetings. 

Half of these contacts will want to learn more so prepare an Acquisition Memorandum which gives the status of the company with a marked date.

If after the acquisition, the company conditions change materially, then the acquirer has legal recourse based on this document.

Two to four of the contacts will send a letter of interest (LOI) with proposed terms and conditions for buying the company.

From there the process goes into due diligence by examining the prepared data room which contains financial, legal, and other information about the company.

Start with a wide range of companies in searching for an acquirer.

 

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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Direct download: Make_a_list_of_target_acquirer.mp3
Category:general -- posted at: 5:00am CST

Mistakes in Emailing an Investor

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

In emailing an investor avoid these mistakes:

Skip the research and just treat the investor as you would anyone else.

Try and tell them everything in the hopes that something will stick.

Skip the attachments and make them ask for a deck.

Ask for funding in the first email.

Make the investor fit into your schedule rather than fitting into your schedule.

Skip the follow-up by making the email a one-and-done.

Email the investor even if your deal doesn’t fit their stated criteria.

Email the investor when you are still trying to figure out what you want the startup to be.

Skipping the ask and letting the investor guess what the next step is.

Including several projects in one email to see which one the investor may go for.

Asking a great deal from the investor without making clear why they should do so.

Avoid these mistakes in emailing 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 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Direct download: Mistakes_in_emailing_an_investor.mp3
Category:general -- posted at: 5:00am CST

Adding Social Proof to Your Investor Email

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

Social proof makes your email more compelling to the investor.

Here’s how to add social proof to your investor email:

Highlight key advisors you have brought on board.

This demonstrates your startup has enough momentum to engage others.

Showcase the customers you have engaged with.

This demonstrates the product’s value proposition has merit.

Include media mentions.

This demonstrates your technology is newsworthy.

List key investors in the deal.

This demonstrates your business proposition can attract funding.

Highlight key team members you have recruited to join.

This demonstrates your business prospects can attract talent.

Use social proof in your investor email to showcase the strength of your deal.

 

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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Direct download: Adding_social_proof_to_your_investor_email.mp3
Category:general -- posted at: 5:00am CST

Best Practices for Emailing an Investor

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

Here are some best practices for emailing an investor:

Put the name of your company in the subject line.

Use social media for making contact but not for pitching.

Spellcheck the email to eliminate any typos.

Refine the email to exclude filler words and phrases to make it as tight as possible.

Don’t use a docsend as it can come across as invasive.

Keep the email to less than 150 words.

Include three key metrics to show traction and performance.

Attach a pitch deck or one-page teaser with additional information.

Include a call to action.

Create a sense of urgency by mentioning some upcoming target dates.

Use the email to update the investor and build a relationship.

Finally, keep it friendly.

 

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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Direct download: Best_practices_for_emailing_an_investor.mp3
Category:general -- posted at: 5:00am CST

Investor Email Essentials

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

In emailing an investor consider these essential todos.

Avoid sales-like verbiage as investors have their guard up against sales pitches.

Focus on what value you can provide the investor.

Keep the email short and concise.

Remember, long rambling stories will not get read.

Use numbers to make your case as it provides specificity and demonstrates your knowledge of the subject matter.

Don’t forget to tell the investor what you want them to do.

Without a call to action, the investor simply goes to the next email.

Finally, include these key points in your email:

The problem you solve.

The solution you offer.

Current traction.

Fundraise status

Call to action.

 

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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Direct download: Investor_email_essentials.mp3
Category:general -- posted at: 5:00am CST

When To Send an Investor Email

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

Timing is important in sending an email to an investor.

Consider these points in scheduling the send of your investor email:

Your email should come at a time when there’s little competition for the investor's attention.

Tuesdays, Wednesdays, and Thursdays are the best days to send.

Mondays and Fridays can be crowded with preparing for the week or closing out for the weekend.

Avoid early morning and early afternoon as the investor receives many emails at that time.

Target 10 am to 11 am and 2 pm to 3 pm.

This drops the email into their inbox with the lowest number of other emails.

There are some investors who check email late Sunday afternoon to prepare for the week.

Friday afternoon and Saturday are almost completely dead as investors are elsewhere.

In setting up an email make sure you know how the schedule send function works.

In emailing the investor take into account the investor's schedule and attention.

 

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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Category:general -- posted at: 5:00am CST

Welcome to another episode of Investor Connect with Hall T. Martin. This marks the second episode of our new segment, "How to Raise Funding," where we delve into real-life examples and insights from individuals seeking the most effective strategies and approaches for success in the world of finance.

In today's episode, we talk about Ten Capital Network. With over a decade of experience, we specialize in running investor relations and introduction campaigns. We range from angel investors to family offices and actively engage with early-stage startups.

We also talk about the importance of building relationships and trust with investors, which often requires more than just a pitch deck. We emphasize the value of in-person events, such as private dinners, to facilitate meaningful connections between entrepreneurs and potential backers.

Additionally, we discuss the concept of breaking down fundraising into multiple rounds and running deadline campaigns to keep investors engaged and committed.

Whether you're an entrepreneur seeking funding or an investor looking for opportunities, you won't want to miss this informative discussion.

_______________________________________________________

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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Direct download: NEW_Segment_EP02.mp3
Category:general -- posted at: 5:00am CST

How To Capture the Investor's Attention in an Email

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

In emailing an investor it’s important to capture their attention.

The subject line and the first line in the email are the two best opportunities.

Here are some techniques to consider:

Key off a past investment made by the investor and call it out as a proxy for your deal.

This connects your deal to their portfolio.

Tie your deal into the investor’s industry focus whether it be medical device, software, healthcare, or other.

This connects your deal to their investment thesis.

Mention a referral source that is familiar to the investor.

This connects your deal to their network.

Find an article or blog post the investor wrote and highlight what you found interesting.  

This connects you to their work.

Once you have the investor’s attention follow up with key points about your startup to generate further interest.

You’re looking to connect your deal to the investor and their world.

 

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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Direct download: How_to_capture_the_investors_attention_in_an_email.mp3
Category:general -- posted at: 5:00am CST

The Investor Update Email

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

After you have pitched an investor it’s important to update them on the progress of your startup.

Investors look for momentum and traction in the startup before investing.

Forecasting high revenue is not the same as actually demonstrating a growth story in progress.

The update should go out no less than once a month.

The email should be short and to the point.

In the subject line put the name of your company and the word update with the month and year. 

Remind the investor that they heard your pitch and list in short, bullet points updates about sales, team, product, and fundraising.

Investors look for the progress you are making and not market news or competition updates as they want to know what you are doing.

In most cases, they will not reply.

It’s not the depth of information that counts but rather the consistency of the updates that matters.

It takes seven touches to close a sale so it takes seven touches to close an investor.

Each email lets the investor peel back another layer of the onion and become more familiar with you and the startup.

It’s not the pitch that motivates the investor, but rather it’s the follow-up.

Focus on key points about the business such as sales pipeline, team activities, product development status, and planned fundraising amounts with valuations.

Ask for advice and feedback as well to engage the investor.

Finally, an investor email campaign will be far more effective if you’ve built a list of investors who know your deal.

 

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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Direct download: The_investor_update_email.mp3
Category:general -- posted at: 5:00am CST

Building Your Network for the Fundraise

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

Before launching your email campaign, build out your network of investors.

As you meet investors it’s important to collect their emails into a list to provide updates.

Sort the list by type of investor -- angel, venture capitalist, family office, etc.

Note their investment interest -- consumer, enterprise software, healthcare, or other.

Capture names of connectors -- those who know investors and can connect you to them.

Six months before launching your fundraising campaign go out to your network with the message 

‘We’re not raising funding now but in six months we’ll do so.  May I keep you informed of our progress.’

This requires no commitment from the investor so most will say yes as many want to see what you have.

Over the following months, send updates to the investors educating them about your deal.

Focus on key points about the business such as sales pipeline, team activities, product development status, and planned fundraising amounts with valuations.

Ask for advice and feedback as well to engage the investor.

An investor email campaign will be far more effective if you’ve built a list of investors who know your deal.

 

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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Category:general -- posted at: 5:00am CST

Generating Investor Interest in Your Email

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

Most investor emails are filled with stories, details, and other extraneous information in an effort to inform the investor.

This typically creates long winding emails with big blocks of text.

Instead of informing, you should intrigue the investor.

In writing an investor email the key goal is generating interest by the investor to learn more.

To generate interest consider these points:

Research the investor so you know what they are looking for and use that information in your email.

Start your email with intriguing facts about your startup such as the current traction or problem you are solving.

State in five words or less what you do as this provides context.

Once you have their attention, you must keep it.

Provide key points showing validation of your business idea and traction.

Use numbers such as metrics, market sizing, and growth rates to make your case.

Use short, concise wording.

The goal is to provide compelling information that keeps the investor reading. 

When presented with a long, rambling email most investors skim the email to find out what it’s about before committing to read it.

Make it easy for the investor to figure out what it is about.

 

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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Direct download: Generating_investor_interest_in_your_email.mp3
Category:general -- posted at: 5:00am CST

An Example Investor Email Format

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

For writing the investor email here is an example email format to follow:

Start with why you are sending this email.

This could be seeking investment, asking for advice, or requesting a referral.

If raising funding, write about the current status of the business and the fundraise that is currently open.

Follow up with validation points including current traction, status of the product development, and the activities of the team.

Include some metrics around the business as numbers show specificity and make the business traction concrete.

Highlight the current customers and what they are saying about the product.

Give more detail about the team by mentioning their past experience including company and project names.

Provide more detail about the current fundraise including funds sought, raised, and the valuation.

Ask for the opportunity to provide more information in a call or meeting.

Keep each point to two or three sentences.

Avoid long winding stories and big blocks of text.

Investors want to know the core details about your business upfront before deciding to spend more time on it.

The core four areas of interest are sales, team, product, and 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 

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Category:general -- posted at: 5:00am CST

Embarking on the funding journey for your startup can be a formidable task, filled with uncertainties. Questions about the right amount to raise, where to find investors, and how to deliver a compelling pitch often loom large. 

In this engaging segment, we've gathered live insights from startup founders who've successfully navigated these very challenges. We share practical strategies and firsthand accounts to guide you on your own path to financial success. 

How much should you raise? Where do you find investors? And how do you pitch them? In this segment, how to raise funding for your startup, we'll answer those questions and more. Here are live outtakes with startup founders on how to raise funding. I hope you enjoy this episode.

_______________________________________________________

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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Category:general -- posted at: 5:00am CST

What the Investor Looks for in the Email

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

In writing an email to an investor keep in mind the investor’s viewpoint.

Here’s what investors ask themselves when opening an email:

In looking at the email sent name, the investor asks how do I know this person?

When reading the subject line,  the investor asks should I open it?

In opening the email,  the investor asks what do they do and is it relevant to me?

In reading the email, the investor asks do they have any momentum?

In reading about the team, the investor asks what can they do?

In reading about the business, the investor asks do they have any validation that the product works and someone will buy it?

In reading the ask, the investor asks what do they want me to do?

In writing your email, make sure you answer these questions in a concise manner.

 

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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Direct download: What_the_investor_looks_for_in_the_email.mp3
Category:general -- posted at: 5:00am CST

How To Write the Subject Line

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

In emailing an investor the most important line is the subject line.

This gets read by every recipient even if they don’t open the email.

To make the best subject line consider the following:

Draw from your research of the investor and include key points that are relevant.

Include the name of your company and what it does such as ‘Merexis launches first to market a medical device.’

If the investor funds recurring revenue startups, then include recurring revenue in the subject line.

Demonstrate a milestone in the subject line such as ‘Hit $10K MRR revenue.’

Focus on key wins that resonate with investors such as increasing revenue, hiring a team member, or closing a lead investor.

Investors scan subject lines for what may be familiar or relevant to them.

If you have a referral call out the name of that contact.

Keep it short and to the point.  Long subject lines may not get read.

Avoid the funny and cute as this is a business email and not ad clickbait.

Keep the subject line descriptive and avoid filler words.

Avoid generic phrases and make each word descriptive.

The goal is not to tell the investor everything but rather pique their interest so they open the email to find out more.

 

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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
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Category:general -- posted at: 5:00am CST

Investor Email Best Practices

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

Fundraising requires contacting many potential investors through email.

Here are some best practices to consider:

Keep the email short and to the point with no more than 200 words. The shorter the email the more likely it will be read.

Start the email with the why.   Why are you reaching out to the investor?

Narrow the target list of investors. The more narrow, the more you can customize the email.

Research the investor and call out the key points that are important to that investor. Show how your email is relevant to them.

Include the pitch deck.  If the investor is interested they can learn more.

Call out one or two key metrics that put your business in the best light. Numbers show specificity.

Email only one person at the firm.   Emailing too many people reduces the value of the email to that contact.

Don’t ask for NDAs upfront.   Investors are not going to sign an NDA to find out what you have to offer.

Don’t use doc-sharing programs.   It comes across as stalking.

 

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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
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Direct download: Investor_email_best_practices.mp3
Category:general -- posted at: 5:00am CST

How To Personalize the Investor Email

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

In emailing an investor consider using the following to personalize it for the investor:

Start with common connections and indicate any referrals made.

Mention the names of mutual contacts who you’ve recently spoken with and give an update about them.

Indicate a common range of interests and expertise such as a common position, skill, or experience.

This could be holding a similar position at a company or an interest in the same technology or business sector.

Demonstrate that you researched the contact and what you learned from it.

This shows you did your homework and found it informative.

Include information about the investor that you found interesting.

Show how your deal fits into the investment thesis of the investor by pointing out the salient features.

This demonstrates you understand what is potentially interesting to the investor and your deal is relevant.

Show how other investors in the same industry and stage are looking at the deal.

This shows the investor will be in good company if they engage.

The goal is to personalize the email so the investor feels comfortable with reaching out to learn more about it.

 

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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
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Direct download: How_to_personalize_the_investor_email.mp3
Category:general -- posted at: 5:00am CST

Outline for the Investor Email

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

In emailing an investor consider using the following layout:

In the subject line include the name of your company, what you do in 5 words or less, and a recent milestone.

In the body of the email expand on what your startup does in just a sentence.

This could focus on achieving a recent milestone such as closing a big sale.

Follow it with a sentence on what is great about the company.

This could be about how great the team is, or how effective the technology is.

Tell the investor why you are writing and what you want.

This could be about seeking advice, an introduction, or funding. 

The entire email should be no more than five or six sentences.

The investor wants to know what the email is about before reading it all.  

The faster you get to the point of the email, the more likely the investor will engage.

Emails that are graciously short and to the point will get read.

Emails with long,  rambling stories will most likely be skimmed or not read at all. 

 

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.

_______________________________________________________

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

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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Direct download: Outline_for_the_investor_email.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Jacob Kehoe, Associate Director of the Baylor Angel Network.

Located in Waco, TX, USA, Baylor Angel Network (BAN) is an investment network that provides early-stage capital to entrepreneurial companies. As an active investment network, BAN provides a collaborative platform for experiential learning by students of Baylor University, creating a mutually beneficial experience for investors, students, and entrepreneurs.

Jacob Kehoe is the Associate Director of the Baylor Angel Network (BAN). In this role, Jacob assists with the operations of the network, deal sourcing and assessment, investment and communications strategies, and operational oversight of BAN’s student analysts.

Before this role, Jacob gained experience in various industries, including technology, finance, and automotive, by working with multiple startups. During his collegiate years, he founded a machine-learning startup that utilized drones for roofing damage assessments. This venture ended with a successful acquisition shortly after his graduation from Baylor University in 2019. Additionally, Jacob possesses Series 63 and SIE licenses.

Jacob discusses various aspects of angel investing and startups. He talks about BAN's investment approach, focusing on strong teams with market validation. Jacob emphasizes the importance of authentic representation for startups seeking funding, cautioning against exaggerations. Jacob also expressed interest in white-labeled technology and discussed the need for meaningful AI applications. 

Visit Baylor Angel Network at www.baylorangelnetwork.com, and on linkedin.com/company/baylorangelnetwork.

Reach out to Jacob at jacob_kehoe@baylor.edu, and on www.linkedin.com/in/jacobkehoe

_______________________________________________________

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

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Direct download: Jacob_Kehoe.mp3
Category:general -- posted at: 5:00am CST

Challenge in Cold Emailing an Investor

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

In raising funding a founder will need to contact investors.

For those contacts the founder knows, this is a simple process.

For the rest of the potential investors the founder does not know, this presents a challenge.

Cold emailing an investor is difficult for the following reasons:

Investors receive many emails and proposals every day.

Their time is short and must be spent on high-quality outcomes so they budget little time for digging into a deal without some indication of promise.

Many founders overpromise or over-hyped their deal so the investor is skeptical from the get-go.

Investors don’t understand your market space to a great extent and cannot appreciate what value you bring until you can demonstrate it.

They are looking to bucket your deal into the pass, follow, or engage category at first.

Many investors use warm introductions to filter the deals using their network as a screening tool.

They know most deals are too early for them and have a mindset to avoid wasting time.

Keep these issues in mind when preparing a cold email outreach 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.

_______________________________________________________

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

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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Direct download: Challenge_in_cold_email_an_investor.mp3
Category:general -- posted at: 5:00am CST

How Not To Email an Investor

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

Founders raising funding can use cold email outreach to find investors.

In emailing an investor for your fundraise avoid the following mistakes:

Start the email by telling your entire story in one go.

Investors want to know what it’s about before committing to hearing your whole story.

Skip the research and send a deal to an investor that doesn’t fit. 

Research the investor to see if it meets their criteria.

Mention what your startup does at the end of the email.

This requires the investor to scan through the entire email to figure out what you do.  

Investors need to know this upfront as it provides context.

Fail to personalize the email by starting with Hi there.

This shows the investor it’s a mass email and not meant for them personally.

Use a generic subject line such as “New Deal”

This doesn’t tell the investor anything and indicates a lack of effort in crafting the email.

Leave out the call to action.

You need to tell the investor what you want them to do.

This could be to set up a call, log in to an upcoming investor briefing, or make a referral.

Make the overall email lengthy with big blocks of text.

This signals to the investor a substantial time commitment to figure out what it’s all about.

Investors want to know there’s a high probability that this will be a good fit for them so it’s best to indicate that up front.

Avoid these mistakes in your email outreach.

 

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.

_______________________________________________________

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

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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Direct download: How_not_to_email_an_investor.mp3
Category:general -- posted at: 5:00am CST

How To Email an Investor

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

Founders raising funding can use cold email outreach to find investors.

In emailing an investor for your fundraise consider the following:

Research the investor and include key details in the email to show you have done so.

Make the subject line informative so that even if the investor doesn’t open and read the email, they at least read the subject line.

Start the email with the reason for the email in a short and to-the-point format.

In the body of the email show the problem you are solving and the solution you offer.

Articulate the value proposition of your solution.

Show the current status of the company with key traction points.

Call out the fundraiser you have underway and the current status including interest, committed, and invested funds.

Show the use of the funds at a high level -- building products, generating leads, closing sales, etc.

Attach your pitch deck to the email so the investor can learn more.

Focus on accomplishments and recent milestones and avoid spending too much time forecasting the future.

Include your contact information and offer to set up a call or meeting to provide more information.

The goal of the email is to set up a call -- not to get a check.

 

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.

_______________________________________________________

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

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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Direct download: How_to_email_an_investor.mp3
Category:general -- posted at: 5:00am CST

Price Elasticity

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

Price elasticity measures how much a price increase will decrease overall revenue.

If an increase in price results in no reduction in revenue then the price is considered inelastic.

Test your product’s price elasticity by increasing the price by 10% then measure the overall revenue after a month.

If the overall revenue has gone down then the price is elastic which means the market is sensitive to price changes.

On the other hand, if the overall revenue goes up, the price is inelastic.

To calculate the price elasticity metric consider the following:

Price elasticity is calculated as the percentage of overall revenue increase divided by the price increase.

If in our example our overall revenue goes up by 15% from a 10% price increase then the price elasticity is 1.5.  

This means the price is inelastic.

If in our example our overall revenue goes up by 5% from a 10% price increase then the price elasticity is 0.5.

This means the price is elastic

This indicates how sensitive customers are to price increases and what latitude you have in moving the price to account for inflation and other factors.

It’s important to understand the price elasticity of your product as it shows how a price increase will impact overall revenue.

 

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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Direct download: Price_Elasticity.mp3
Category:general -- posted at: 5:00am CST

Per Seat vs per Use Pricing

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

Many SaaS businesses use either per-seat or per-use pricing.

Per seat pricing offers a fixed price for the customer making it easy to budget.

It also provides a consistent revenue stream for the provider especially when applied with annual contracts.

Per-use pricing works best for the provider whose cost scales with the product usage.

Usage pricing is often used in a ‘land and expand’ strategy in which customers can start with a low price but limited use.

As the customer uses more of the product, the price increases. 

It also works well when customers don’t use the product consistently.

This type of customer will consider the product to be too expensive if paying per seat.

Combining the per-seat and per usage price could create a new pricing model.

In this case, the provider could charge a base price for the platform and then charge a variable amount based on the usage.

Consider combining pricing strategies into new revenue models for your 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/ 
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Direct download: Per_Seat_vc_Per_Use_Pricing.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Michael Cardamone, CEO and General Partner at Forum Ventures.

Located in New York, NY, USA, Forum Ventures is the leading early-stage fund, program, and community for B2B SaaS startups. Founded in 2014 as Acceleprise, they are on a mission to make the B2B SaaS journey easier, more accessible, and successful for early-stage founders, through pre-seed and seed-stage funding, high-touch programming, corporate perks and introductions, and an active SaaS community. 

With over 250 portfolio companies, Forum founders have gone on to raise from NEA, Andreessen Horowitz, Uncork Capital, 8VC, Founders Fund, Menlo Ventures, Canaan, Bowery Capital, Susa Ventures, Salesforce Ventures, SV Angel, True Ventures and many more.

Michael Cardamone focuses on developing our investment strategy with the mission to make the B2B SaaS journey easier, more accessible, and more successful for early-stage founders. As one of the first 30 employees at Box, as well as leading partnerships at AcedemixDirect, Michael has had direct experience growing SaaS companies from small startups to large-scale enterprises. He is also an angel investor in a dozen companies including a seed investment in Flexport.

Michael shares insights about his background in tech, the evolution of Foreign Ventures, and their unique approach to investing in startups. He discusses the challenges of raising pre-seed capital in the current market and outlines the criteria they look for in founders and startups. Michael also explains the differences between Foreign Ventures and other venture funds, emphasizing their hands-on approach and extensive resources. 

Visit Forum Ventures at www.forumvc.com/, and on www.linkedin.com/company/forumvc/.

Reach out to Michael at mike@forumvc.com, and on www.linkedin.com/in/michaelcardamone.

_______________________________________________________

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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Category:general -- posted at: 5:00am CST

Premium Pricing

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

Premium pricing sets the price well above the competition for a product.

Use this pricing model to signal luxury.

It's the counter strategy to value pricing which offers the most product features for the least amount of money.

Premium pricing positions the product as the best on the market to be used by the elite.

To use this pricing you must create a brand that exudes luxury, exclusivity, and prestige.

The price must have a high quality factor although it doesn’t have to be the best.

This strategy works when products can be differentiated with features and is not a commodity product where all the products have the same features.

The higher price burnishes the brand and provides higher margins for the company.

The target audience is a segment of the overall market.  

Typically the premium brand attracts higher end customers who have the money to pay for the product and don’t need financing or other support to buy it.

The premium price reinforces the customer perception of the product and their position.

Premium pricing is similar to skimming pricing which sets the price high and then lowers it to skim customers at each pricing level.

Skimming captures the most revenue from the market. 

Premium is different in that it doesn’t lower the price to capture non-premium 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.

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Category:general -- posted at: 5:00am CST

Volume Pricing

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

Volume pricing offers a discount for products or services bought in volume.

Traditionally a discount was justified if a customer bought ten or more units of a product because the cost of sales was lower.

Sellers used it as an incentive to encourage larger order sizes.

Traditionally, a discount price would be set on unit sales from 10 to 50, and a higher one for 50-100, and so forth.

The discount would increase as the user bought more products.

The advantage of volume pricing is that it encourages higher purchases.

Often competitors offer volume discounts requiring you to do the same.

It can be used as part of the promotion of the product as well.

The disadvantage to volume pricing is that it cheapens the value of the brand as it treats the product as a commodity.

Also, it reduces the revenue.

To set your volume pricing first consider your core pricing model and maintain it.

Review the competition to see what is offered and how customers will compare you to.

Know your cost to build and deliver the product and don’t go below that price in discounting.

Identify typical purchase volumes and set up discounts for each tier.

Set your discounts to last a limited amount of time so if the market conditions change you can modify your discount pricing.

 

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_______________________________________________________

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Category:general -- posted at: 5:00am CST

Bundle Pricing

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

Bundle pricing sets the price on a package of services that is lower than if you bought each service individually.

This generates more demand for the product since the price is lower.

It can increase sales because the product bundle has more features and usability than an individual product.

It can also be used to create a higher perceived value at a lower cost.

Bundling works with products that are complementary such as a game console and a game.

To set a bundle pricing consider the following:

Select the main product that customers want and then add complementary products to the bundle. 

Choose complementary products that increase the usability of the main product. 

Set the price of the individual items at a price that encourages the customer to buy the bundle.

Know your cost of products and don’t set the price below cost.

The downside to bundles is that if the bundle doesn’t achieve higher sales, then it reduces the profit.

 

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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Category:general -- posted at: 5:00am CST

Dynamic Pricing

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

Dynamic pricing varies the price based on the current supply and demand.

This pricing can be used to increase the price when demand is high and then lower it when supply catches up.

This is often used in ride-sharing services which charge more during the rush hour.

To use this pricing model consider the following:

Calculate the cost of delivering the product or service.

Never drop the price below the cost.

Determine your pricing strategy -- market share, revenue generation, or growth.

This aligns your dynamic pricing with your overall pricing strategy.

Choose a pricing model such as competitive pricing or cost-plus pricing.

This determines how to set the price based on the conditions.

Capture your pricing model into a set of rules to implement.

Test the pricing rules to see how well they work.

Look for overpriced and underpriced situations.

Estimate the demand for your product or service based on forecasted location, time, or event to set your sales forecast.

 

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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Category:general -- posted at: 6:36am CST

Freemium Pricing

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

The freemium pricing model is used to expedite customer adoption of the product.

Many companies use this as part of a tiered pricing model.

The freemium model gives users some experience with the product.

These are the advantages of a freemium model:

It’s easy to implement as the price is zero for a period of time or usage.

Customer usage shows the company which ones to pursue for upgrades and paid services.

Freemium models can generate virality.

There are disadvantages to the freemium model, as follows:

There is a cost to supporting free users including support and technical costs.

Customers often don’t value what they don’t pay for.

It can be difficult to move customers off the free service into the paid service.

To use the freemium model effectively you must have a set of features that customers will pay for.

If you give those compelling features away for free, then it will be hard to upsell them to paid 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.

_______________________________________________________

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Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes José Luis Silva, Co-founder and Managing Partner at Dux Capital.

Located in Austin, Texas, USA, Dux Capital is a standout in American venture capital, prioritizing early-stage Latinx-led startups to counter the disproportionate funding gap they face. Committed to fostering diversity, equity, and inclusion, Dux Capital empowers underrepresented voices in investments, nurturing portfolio companies with an eye on both financial and societal gains. 

Their 2018 fund of $8 million, backed by Institutional LPs and high net worth individuals, cemented their role as vital supporters of Latinx entrepreneurs, making them a natural choice for those seeking seed funding. Dux Capital's influence illuminates a path of positive change through finance, spotlighting the potential for transformation, one investment at a time.

José Luis Silva, the visionary co-founder of Dux Capital, is celebrated for his fervent pursuit of growth, financial expertise, and startup innovation, alongside a passion for golf and tennis. At the helm of the fund, he orchestrates a symphony of roles, shaping investment strategies, curating portfolios, nurturing emerging startups, and sculpting pivotal portfolio investments, including Refly, aTexto, Trato, Epica, Mozper, Koomkin, and Boundless Robotics. 

Beyond Dux Capital, José Luis's dynamic entrepreneurial journey spans Insurtech, Foodtech, Consultancy, and Advertising, marked by inventive business models, successful fundraising campaigns, and a global perspective enriched by academic laurels from IE Business School in Madrid and Singapore Management University. Jose holds a BA in Finance from Instituto Tecnológico y de Estudios Superiores de Monterrey

Jose shares his investment thesis, the value of active and non-invasive investment, leading rounds, and fostering relationships. He also highlights resourceful platforms like PitchBook, Crunchbase, and Quaida for venture capital insights. Silva envisions combining blockchain, crypto, and FinTech to revolutionize remittance services for Latinos, closing the funding gap while creating a sustainable impact.

Visit Dux Capital at https://www.duxcapital.vc/, https://www.linkedin.com/company/duxcapital/about/, and on @DUX_Capital. 

Reach out to Jose at jl@duxcapital.vc, www.linkedin.com/in/jlsdux, and on @jl_silvav. 

 

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Category:general -- posted at: 5:00am CST

Flat-Rate Pricing

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

Flat rate pricing is the simplest pricing model.

There’s one price for the product or service no matter what features are included or how often the product is used.

It acts similarly to the traditional software licensing model.

It’s often used as a premium pricing model that includes everything the company has to offer.

The advantage of flat-rate pricing is that it’s simple and easy to implement.

The sales force can focus their effort on one priced product.

The disadvantage is that one cannot segment the customer base to capture higher-value users.

For simple products, the flat-rate pricing model works well.

For complex products and a diverse customer base, it may be insufficient to capture the necessary revenue to grow the business.

 

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_______________________________________________________

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Category:general -- posted at: 5:00am CST

Tiered Pricing

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

Tiered pricing offers multiple price points for a product with varying levels of functionality or service.

It is the most often used pricing model.

The advantage of tiered pricing is as follows:

It gives the user multiple options to choose from.  

The better the fit to the customer's budget the more likely the customer will sign up and retain.

Captures more revenue from the customer because it fits their business better.

This decreases the number of customers who would pay more for the product.

Provides a growth path for users.

Customers can upgrade as their need for the service grows.

The drawbacks to tiered pricing are as follows:

Too many choices will confuse the customer.

Too broad of an offering may lack focus.

Most tiered pricing solutions offer three choices.

 

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

Let’s go startup something today.

_______________________________________________________

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Category:general -- posted at: 5:00am CST

Number of User-Based Pricing

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

The number of user-based pricing sets the price based on users.

This works for enterprise customers where there are a number of workers who need to access the platform.

This makes it easy to forecast and budget the cost of the product.

The downside is that the customer may end up paying for users that don’t use the product.

For a number of users-based pricing, consider the following:

This pricing disincentives the company to add more users to the system.

It can increase churn as a customer with a larger number of users will have a higher churn rate than those with a smaller number of users.

The product's value will vary from one user to the next without capturing revenue from the higher-value group.

It opens the door for misuse as some customers may have their workers share logins to hide the number of users.

Instead of pricing on a fixed user count, price on active users which provides a more accurate usage than seats.

 

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Let’s go startup something today.

_______________________________________________________

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Category:general -- posted at: 5:00am CST

Usage-based pricing

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

Usage-based pricing focuses on how much of the product or service the customer uses.

The more the customer uses the product the greater the price they will pay.

To apply usage-based pricing to your product, identify your value metric and then assign a price to it.  

Those using the service at a high volume may look for alternative solutions as the cost may grow too high.

To increase the usage of the product, consider the following:

Make it easy for customers to access and use.

Make the pricing simple and transparent.

Offer several levels of service to accommodate the small user as well as the large one.

Offer a lower per-unit rate if the monthly usage goes above a threshold.

Offer premium services to customers whose usage goes above the threshold.

Usage pricing is a good way to price the product as the price to value is clear to the customer.

 

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Let’s go startup something today.

_______________________________________________________

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Value-Based Pricing

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

Value-based pricing focuses on what value the customer derives from the product rather than the cost for the producer to build and deliver it.

This pricing model focuses on how the customer perceives the product and what problem it solves for them.

To apply value-based pricing to your product assess what price the customer is willing to pay for the product.

Look for customer segments that will pay more for the product and focus there.

To increase the value, consider the following:

Make the product easy to use.

Generate branding around the product.

Create a herd effect in the market and highlight critical users of the product.

Generate scarcity around the product.

Increase customer service and support.

In addition to adding value, these steps also help differentiate your product from the competition.

 

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

Let’s go startup something today.

_______________________________________________________

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On this episode of Investor Connect, Hall welcomes Anthony Santaro (Venture Capital Associate) & Somak Chattopadhyay (Founder and managing Partner) at Armory Square Ventures.

Located in Syracuse, New York, USA, Armory Square Ventures provides the first round of institutional capital for companies targeting the largest industries across New York State and select emerging cities across the Northeast. They are actively involved in all aspects of company growth—from recruiting senior talent, customers, and co-investors to providing general management support.

Armory Square Ventures was launched in 2014 and they consider themselves fortunate to be backed by the region’s most respected institutions, corporations, and foundations. They recognize startups need far more than capital to survive, scale, and thrive. They help their startups elevate their operations to generate outsize returns.

Somak Chattopadhyay has been operating and investing in early-stage startups in New York State and other emerging venture regions since 1999. Before launching ASV in 2014, he was a partner at Tribeca Venture Partners (formerly Greenhill SAVP, “Tribeca”), where he was instrumental in nearly every investment of its first fund and helped launch its second fund. As a venture capitalist at Edison Ventures, Somak sourced and evaluated investments in the tech-enabled service sectors managed deal flow referral networks, and identified emerging growth companies in under-venture-invested regions across the Northeast. 

Anthony is a member of the investment team at Armory Square Ventures. His responsibilities include sourcing new deals, analyzing potential opportunities, and supporting the firm’s portfolio companies. Prior to ASV, Anthony was an analyst at Wells Fargo's investment bank in New York City. He is also on the board of directors for the Young Citizens Committee for New York City, a non-profit that aids low-income New Yorkers in improving their neighborhoods. Anthony is a graduate of Johns Hopkins University.

Somak highlights the parallels between venture capital and the hospitality industry, emphasizing the importance of providing exceptional experiences. Anthony shares his interest in marrying his venture capital experience with his family's history in the trucking space, highlighting the potential for innovative solutions in this area. Both guests share the significance of optimism in entrepreneurship and investing, and discuss the value of strong syndicates for supporting startups. 

Visit Armory Square Ventures at www.armorysv.com, and on www.linkedin.com/company/armory-square-ventures.

Reach out to Somak at somak@armorysv.com, www.linkedin.com/in/somak-chattopadhyay-7662a, and Anthony at anthony@armorysv.com and www.linkedin.com/in/anthony-santaro-5b88ba109.

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Category:general -- posted at: 5:00am CST

Promotional Pricing

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

Promotional pricing gives your product an immediate sales boost.

This is often used around holidays and special events.

Offering a flash sale or a short time-only discount can generate some immediate revenue for your business.

Holiday specials can also be used to spur additional sales.

Typical examples include the following:

Buy one get one free offer.

Digital coupons to use on the next purchase.

Flash sales which last only a few hours.

Loyalty programs provide points to use for purchasing the product.

Holiday offers such as Black Friday.

To set your promotional price consider the incremental cost of sale to ensure you don’t discount below your product cost. 

Use promotional pricing sparingly as it impacts the brand.

Too much discounting trains the customers to wait till the next promotion before buying.

 

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

Let’s go startup something today.

_______________________________________________________

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Category:general -- posted at: 5:00am CST

Competitor-Based Pricing

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

In pricing your product consider the competition.

In well-established markets where the competition is entrenched, you may need to set the price in the same range as the competition.

Review the competitors for their pricing structure.

Take note of the price per unit and positioning of the competitors’ products in the market.

Premium products set the upper bound for the price while value products set the lower limit.

Competitors may be pricing to gain market share rather than revenue.

You’ll need to take this into consideration as your strategy may differ from the competition.

Look for ways to differentiate your product and thus charge a higher price.

This could be better branding, more features, better partners or more.

Consider the category you are in and ask if you could reposition your product to another category with a higher growth rate and a higher price.

If using competitive pricing then you’ll need to monitor the competitors pricing quarterly to stay updated.

 

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

Let’s go startup something today.

_______________________________________________________

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Category:general -- posted at: 5:00am CST

Good Better Best Pricing

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

In pricing your product consider the Good, Better, Best model

This model gives you three price points with which to cover the market.

The Good price is set to capture the low end of the market.

The key here is the core feature the customer wants and will pay for.

For a product with many features, this may be difficult to determine.

Choose the basic feature that the majority of customers want.

For the Better priced product, include additional features that let you capture more users but the price is somewhat higher.

For the Best priced product, include everything you have in the product to cover all users and use cases.

The Good priced product should come in at or below your competition.

The Best priced product should be priced high enough to signal it’s a premium buy.

The Better priced product should be priced between the Good and Best price at the two-thirds point above the Good price.

This pricing encourages users to move to the Best price as the price differential is small but the additional features are numerous.

The Good Better Best pricing is an easy-to-use model for pricing your product.

 

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

Let’s go startup something today.

_______________________________________________________

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Category:general -- posted at: 5:00am CST

How To Price a SaaS Product

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

Pricing a SaaS product is different from a traditional product.

A SaaS customer pays on a recurring basis such as every month or year.

Since the customer is paying for a service for a period of time, then the price must reflect that usage.

There are two pricing considerations in a recurring revenue model -- cost of customer acquisition and lifetime value. 

The price must be low enough to fit into the customer’s monthly or annual budget.

The price must be high enough to deliver to the company a healthy lifetime revenue stream.

Too low a price and the company won’t be able to grow because there's not enough revenue from the product to cover the cost of delivering the product.

Leaving money on the table hurts the business as it will need the revenue to hire more salespeople and improve the product. 

Too high a price and the company will incur a higher cost of acquisition.

To price your SaaS product, consider the following:

Identify the value metric of your product or service. 

Review your cost of customer acquisition in unit economic terms from your initial cohorts.

Look at the churn rate which is the rate customers are dropping out to estimate your lifetime value.

If you lower your price, your cost of customer acquisition should go down. 

By making the product cheaper it should take less sales and marketing spend to close the sale.

If it does not, then you should consider raising your price and check the impact on your churn rate.

Finally, review the competition to see what others in the industry are doing.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: How_to_Price_a_SaaS_Product.mp3
Category:general -- posted at: 5:00am CST

Price Comes Before Product Development

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

Most startups build a product and only then start a discussion with customers about how much they will pay for it.

The pricing discussion should come before product development.

In fact, the decision to build the product will depend on how much you can charge for the product.

Before starting product development, create a one-page description of the product.

List out the key features and benefits along with the price.

Make several test mailings and in-person discussions to check what price the target customer is willing to pay.

Vary the price from one test to the next and check the results.

Never put a higher and lower price on the page and then ask which one to choose.

The prospect will always choose the lower price.

Instead, put one price on the page and then ask, would you buy it or not?

In each test case, note which customers would pay a higher price and which would only pay a lower price.

This will help you determine the buyer personas and how to price a good, better, best product offering.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Price_comes_before_product_development.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Tanika De Souza, CEO at High Octane Teams (HOT).

HOT is an offshore staffing agency, focused on systemizing your process to streamline growth. It is focused on hiring Virtual International Staff to fit the client’s specific needs and company culture. Their VAs come in to not only handle the workload but to help clients systemize and document their processes. Their goal is to help them be more organized to reduce defect rates and increase productivity.

Tanika started her first business in 2009 and grew it to over 100 employees. Her virtual staff is trained to create SOPs, systemize your business processes, and report KPIs for their department. She has extensive knowledge and expertise in hiring and managing teams.

Tanika shares the transformative power of virtual international staffing in response to shifts in the US job market, with an emphasis on the intersection of AI and staffing processes. Tanika talks about the delicate balance between AI verification and applicant misrepresentation, highlighting the importance of candidates skilled in AI tools to remain valuable in the workforce. 

Tanika also explores the challenges and rewards of the staffing industry, revealing the potential to positively impact lives in various countries through remote work opportunities. 

Visit High Octane Teams at highoctane.team, and on www.linkedin.com/company/high-octane-teams.

Reach out to Tanika at tanika@highoctaneteam.us, www.linkedin.com/in/tanika-de-souza-ma-99b902196.

_______________________________________________________

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Direct download: Tanika_de_Souza.mp3
Category:general -- posted at: 5:00am CST

Calculating Your Value Metric

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

Your value proposition is what the customer is buying from you.

Stating it in unit economic terms is called your value metric.

It could be storage space usage, transactions on a marketplace or other.

Sometimes the metric is clearly assessed such as traffic driven to a website while at other times it can be difficult to pin down such driving revenue.

For difficult situations choose a metric that comes closest to capturing it.

In the revenue example, the number of customer visits could be used to track progress.

Identify your value metric and assign a dollar amount to it.

Now you can create a series of pricing levels for the customer.

One pricing strategy is the good, better, best approach.

This gives the user three options to choose from.

If there are too many choices then the customer may find it difficult to decide.

You can also price the product based on value metric usage.  

Assign a value to each unit and then charge based on the usage rate.

Figure out your value proposition and define it in unit economic terms.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Calculating_your_value_metric.mp3
Category:general -- posted at: 5:00am CST

Identifying Your Customer Profiles

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

Your value proposition is what the customer is buying from you which drives the pricing for your product.

In setting the price for your product first segment your customers and identify their personas and how they will use the product.

Figure out their key care-about and match them to the features of the product.

This should be no more than three or four types.

Define a pricing strategy that covers each persona.

Take into account their budget and how much they can pay.

Also, consider the cost of customer acquisition for each type.  

There may be customer personas who are too costly to acquire and satisfy with the product.

Remove these from your target customer persona list.

The more you know about your customers the more accurately you can define your pricing.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Identifying_your_customer_profiled.mp3
Category:general -- posted at: 5:00am CST

Pricing Based on Strategy

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

Your product strategy drives your pricing model.

There are three strategies to consider which are driving revenue growth, gaining market share, or driving profits.

For startups raising funding, driving revenue growth is the best strategy as investors want to see traction and growth.

Regardless of the competition or the state of the product, the startup should put revenue growth first.

Take all sales opportunities to maximize revenue.

For startups not raising funding but looking to win market share, start with a low price and then increase it with premium features or by usage.

Look for opportunities left open by the competition for your sales efforts.

For startups looking for profitability, start with a small number of customers that will pay a higher price.  

As you grow the business you can look for additional profitable business opportunities that allow for premium pricing.

Avoid low-margin products by letting other companies provide them.

You can use partners to complete the solution for the customer if necessary.

Set your business strategy before setting your pricing strategy.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Pricing_based_on_strategy.mp3
Category:general -- posted at: 5:00am CST

Bad Revenue

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

Not all revenue is the same.

In fact, some revenue is bad revenue.

Bad revenue comes from products that are underpriced.

Without enough revenue to cover the costs of delivering the product, the company struggles.

Customers become unhappy when they fail to receive the expected product or service.

If done over a long timeframe, the company suffers from employee burnout.

Some companies overcompensate for this by hiring more employees which decreases profitability.

Good revenue ensures there’s enough funding to cover the cost of delivering the product or service and help grow the company.

Be wary of offering large discounts as this is one of the most common ways to turn good revenue into bad revenue.

Make sure the price you charge covers the cost of delivering the product or service.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Bad_Revenue.mp3
Category:general -- posted at: 5:00am CST

Contribution Margin vs. Gross Margin

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

The contribution margin is the same as the gross margin but without the fixed costs included.

It includes only direct costs and variable costs.

This means the contribution margin will always be the same or higher than the gross margin.

The contribution margin is used for setting the selling price of a product and determining the profitability of the product.

Fixed costs are considered sunk costs and should not be used in the calculation of product prices.

Contribution margin can be used to understand the profitability of each product as it eliminates non-direct costs from the equation.

The profits from the contribution margin calculation can be applied to the company’s overhead.

Consider using contribution margin in your pricing and product performance calculations.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Contribution_Margin_vs_Gross_Margin.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Erwin Jager, Founder and CEO at Wreckdock Vessel Recycling.

Located in Dubai, Saudi Arabia, Wreckdock is an innovative offshore recycling company that completely dismantles seagoing vessels. Wreckdock collects, processes, and recycles all released materials and resells them to international market parties. 

Wreckdock includes the trade and supply of steel products, financial buying and selling operations and international trade in ferrous and non-ferrous metals and oil. Wreckdock is developing a new sustainable facility including a complete employee compound based in Saudi Arabia.

Erwin Jager is committed to reversing waste in the maritime industry, generating jobs, and strengthening the local economy in the Kingdom of Saudi Arabia. The new maritime recycling facility is set to launch in 2025, with the potential to transform the industry's approach to ship recycling and dismantle sustainably. Under his leadership, the company has the mission to become one of the most respected 

and successful ship recycling companies in the Middle East and Asia.

 

Erwin talks about his background, how he transitioned to vessel recycling, the opportunities he sees in the market, and the reasons behind establishing the company's operations in Saudi Arabia and Iraq. Erwin underlines the environmental significance of vessel recycling and the potential for growth in this industry.

 

Visit Wreckdock Vessel Recycling at http://www.wreckdock.com, and on www.linkedin.com/company/wreckdock

Reach out to Erwin at erwin@wreckdock.com, and on www.linkedin.com/in/e-r-w-i-n-j-a-g-e-r-2-0-2-3-.

 

_______________________________________________________

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Direct download: Erwin_Jager.mp3
Category:general -- posted at: 5:00am CST

Gross Margin Is the Comparator

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

Since not all revenue is the same, how does an investor compare one company to another?

Gross margin is one key comparator.

It measures how much revenue is available to invest in the growth of the business.

Gross profit is calculated by taking revenue minus the cost of goods sold.

Gross margin is calculated by taking gross profit divided by revenue.

The higher the gross margin the more capital efficient the business.

This means the company can go further with less funding.

Companies vary in their gross margin.

Some have very efficient product delivery models while others have high-cost models.

While not all revenue is the same, gross margin predicts funds available for future growth. 

Consider the gross margin in your investment analysis of a business.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Gross_Margin_is_the_comparator.mp3
Category:general -- posted at: 5:00am CST

More Characteristics of Revenue

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

Not all revenue is the same.

There are several characteristics that define the quality of revenue.

Here’s an additional list to consider:

Repeatable -- if the revenue is not recurring but rather repeatable then it has a greater value than the revenue that is a one-time event.

Strategic -- if the revenue comes from a strategic source rather than a tactical source it will most likely provide greater value to the business in the long run.

Product/Market fit -- if the revenue comes from a source of strong product/market fit it will have greater value than revenue that comes from a weak product/market fit.

Long-term value -- if the revenue comes from a strategic channel then it will have greater value than if it comes from an opportunistic channel.

Look for these characteristics to understand the quality of your revenue.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: More_Characteristics_of_revenue.mp3
Category:general -- posted at: 5:00am CST

Characteristics of Revenue

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

Not all revenue is the same.

There are several characteristics that define the quality of revenue.

Here’s a list to consider:

Predictability -- if the revenue is recurring it has higher predictability and thus a greater value.

Concentration -- the more sources you have the stronger the revenue as you avoid over-concentration of customers.

Diversity -- the greater the number of use cases for the product drives diversity which provides greater value as your revenue is not at risk of changes in the market.

Contracts -- having contracts gives greater value to the revenue as it strengthens the predictability of it.

Customer solvency-- revenue from a customer that is profitable has greater value as it increases the chance that it will continue.

Look for these characteristics to understand the quality of your revenue.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Characteristics_of_Revenue.mp3
Category:general -- posted at: 5:00am CST

Marginal Revenue

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

Marginal revenue is the revenue for each additional unit sold.

The additional unit comes with a marginal cost which is the additional cost on that unit.

As the startup scales costs will rise and at some point, the marginal cost per unit will increase.

Startups should raise their prices as they grow so the marginal revenue stays ahead of the marginal cost.

By adding more features to the software platform or expanding the product to have more benefits, the product should command a higher price.

You calculate marginal revenue by taking the change in revenue divided by the change in quantity.

Change in revenue is calculated by taking the total revenue and subtracting the last unit sale revenue.

Marginal revenue and marginal cost are good indicators for predicting the direction of profit.

For startups, this helps determine your cash runway.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Marginal_revenue.mp3
Category:general -- posted at: 5:00am CST

Operating Revenue

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

Operating revenue is revenue from the core business.

Non-operating revenue is revenue that comes from other sources.

For example, if the company sells a service, that revenue is considered operating revenue.

If the company sells a piece of furniture, that revenue is considered non-operating revenue.

By separating the operating from the non-operating revenue the financial metrics will be more accurate.

Operating revenue is calculated as the gross revenue minus variable costs of goods sold.

Net operating revenue is the operating revenue that takes out the operating expenses.

Investors often look for the revenue that represents the core business. 

Operating revenue is a good way to present it.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Operating_Revenue.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Dr. Chris Apfel, Founder, CEO, & Chairman of the Board at SageMedic Corp.

Located in Palo Alto, CA, USA, SageMedic Corp. (SAGE) is a cancer diagnostic company that brings precision medicine to the next level by overcoming the limitations of genomic testing. Specifically, because only 1 out of 4 patients have genomic mutations, in most cases oncologists don’t have the tools to predict which therapy, if any, is likely to work for an individual patient. Hence, SAGE has developed the SAGE Oncotest™, a proprietary patent-protected ex-vivo, high-throughput 3D assay that predicts a patient’s tumor response to traditional chemotherapies and targeted therapies, independently of any potential genetic mutations, and that within just 1 week.

 With only $4.0M of funding SAGE has been able to develop this assay and is now a registered California lab that has very recently become fully accredited according to the Clinical Laboratory Improvement Amendments (CLIA) by the Commission on Office Laboratory Accreditation (COLA) and Center for Medicare and Medicaid Services (CMS), hence at the verge of starting commercialization to generate early revenue and clinical case studies. 

Dr. Chris Apfel is an impact investor, and the Chair of the Life Sciences at the Northern California chapters of the Keiretsu Forum. He has led numerous due diligence efforts and has since made over 20+ investments in life science companies including Mission Bio, CorInnova, Pathware, Raydiant Oximetry, etc. 

Before that, Dr. Apfel was an Executive Director of Cadence, where his health economic research on a non-reimbursable drug showed a $500 per patient cost savings after which Cadence was acquired for $1.3 billion by Mallinckrodt. Before he moved into the industry, he was a practicing clinician and professor at the University of California San Francisco (UCSF) with over 100 publications that have been cited over 20,000 times in the literature. Dr. Apfel received his MD/PhD from the University of Giessen, Germany, and his MBA from The Wharton School of Business, University of Pennsylvania, PA. 

Dr. Chris shares the need for a strong and experienced team and game-changing technology, while also acknowledging the regulatory challenges in the life science space. He shares his belief that successful FDA approval can lead to high rewards and discusses the significance of reproducibility in academic research and the importance of forming independent opinions when evaluating startup opportunities.

Visit SageMedic Corp at www.sagemedic.com, and on www.linkedin.com/company/sagemedic.

Reach out to Dr. Chris at capfel@sagemedic.com , and on www.linkedin.com/in/chrisapfel.

 

_______________________________________________________

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Direct download: Dr._Chris.mp3
Category:general -- posted at: 5:00am CST

Accrued Revenue

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

Accrued revenue is revenue that has been earned but has not yet been paid for.

This could be project work that is billed when completed.

The unpaid balance for the work done is considered accrued revenue.

This applies to project work as well as loans in which the interest income is considered accrued revenue.

Revenue should be recognized in the accounting period in which it occurred.

Accrued revenue is considered an asset on the balance sheet.

The opposite of accrued revenue is deferred revenue in which you receive payment in advance of providing the service. 

It’s considered unearned revenue and is posted as a liability on the balance sheet.

Work with your bookkeeper to capture this information into your accounting system.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Accrued_Revenue.mp3
Category:general -- posted at: 5:00am CST

Unearned Revenue

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

SaaS businesses charge a subscription fee for the product on a monthly or annual basis. 

For those charging on an annual basis, the revenue generated at the beginning of the contract is considered unearned revenue.

Unearned revenue is revenue received before the service actually occurs.

The unearned revenue is not an asset, but rather a liability until it is earned.

It must be reported in the balance sheet as a liability.

As the revenue is earned, you must move it out of the unearned revenue account credit. 

This is typically done on a monthly basis.

In running a SaaS business it’s important to understand when to recognize revenue and how to account for it in the financial statements.

Contact your accountant to help set up your books properly at the start of the business.

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Unearned_Revenue.mp3
Category:general -- posted at: 5:00am CST

Components of Revenue

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

Revenue or sales stands for the amount of funds a company earns.

This comes from the goods or services the company sells.

This is often called Gross Sales or Total Sales as it’s the total amount of the proceeds.

Net sales are the gross sales minus any returns, discounts, or other price reductions offered to customers such as rebates.

The cost of goods sold is the cost to produce the goods or services.

In a consumer product goods company, it’s the cost to build the product.

In a SaaS business, it includes the cost of servers and software used to provide the service. 

Gross margin is the Net Sales minus the cost of goods sold. 

Gross margin percent is calculated as gross margin over total sales.

This is a key factor for many investors as it represents the amount of funds you have available for sales and marketing.

The higher the gross margin, the greater the capability of the company to sell it.

Finally, there’s the cost of sales.  

These are the costs directly related to selling the product such as commissions.

It’s important to understand these elements in calculating your sales and presenting them to investors. 

 

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

Let’s go startup something today.

_______________________________________________________

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Direct download: Components_of_Revenue.mp3
Category:general -- posted at: 5:00am CST

Types of Revenue

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

Not all revenue is the same as there are several types of revenue.

SaaS companies earn different types of revenue through their product offering.

Here’s a list to consider:

Software licenses are quite valuable as one can charge recurring fees for them.

Maintenance fees can also be valuable as they often recur on an annual basis.

Subscriptions are the highest value because they recur every month in many cases.

Services can be valuable as they can often be priced high relative to their cost to perform.

Hardware is the least valuable as it’s a one-time charge and has limited revenue-generating capacity.

Investors view each of these revenue streams differently and will focus on those that recur most often.

This comes into play in setting valuations for a fundraise or an exit event.

Highlight the recurring revenue and how those streams are increasing over time. 

The more predictable the revenue, the higher its value.

 

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

Let’s go startup something today.

_________________________________________________________

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Direct download: Types_of_revenue.mp3
Category:general -- posted at: 3:00am CST

What Impacts the Quality of Revenue?

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

Not all revenue is the same.

Investors look at the characteristics of the business which impacts the quality of revenue.

Revenue that comes from a source that will sustain longer will have a higher value to investors.

Here’s a list of characteristics investors use to assess the value of a revenue stream: 

Sustainable advantage -- if the business has a sustainable advantage then the revenue will have a high quality because it will reoccur longer.

Network effects -- if the business has network effects then the revenue has a higher value because of the competitive advantage that network effects bring.

Predictability -- if the business can predict its revenue stream then it will have a higher value as it gives the business visibility on their forecasts.

Switching costs -- if the business’s product has high switching costs then its revenue will be valued more as customers will stay longer.

Low customer concentration -- if the business has high customer concentration then it will be at greater risk since the revenue relies on a small number of customers.

High marketing spend -- if the company has a high marketing spend then it will reduce the value of the revenue as it’s considered costly compared to revenue generated by organic demand.

 

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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Direct download: What_impacts_the_quality_of_revenue.mp3
Category:general -- posted at: 5:00am CST

On this episode of How to Invest Series Hall, revisit the insights of Dennis Coleman from Life Science Angels, Ipshita Mandal-Johnson from Global Bio Fund, Mark Groper from Orion Biotechnology, Allison Piper Kimball from Wave 27 Ventures, and Neal Vail from Progenerative Medical, Inc. What do they all have in common? The answer to this simple and powerful question: What’s your advice for people investing in startups in this sector?

Life Science Angels is a premier healthcare-focused angel investment organization based in Sunnyvale, California. Global BioFund, takes a gender-smart lens when investing in bio sectors, including digital health. While Orion Biotechnology has its own unique scientific approach to developing immunotherapeutics. Wave 27 Ventures is a venture capital firm based in Bellaire, Texas. Progenitive Medical, Inc., offers practical advice for aspiring angel investors. 

Our guests share the importance of budgeting and diversification, investing in people and diverse teams, and learning from experienced investors. If you are looking to approach startup investments, make sure you have an informed and strategic mindset to maximize your chances of success in this dynamic sector.

Links from today's show:

Life Science Angels: https://www.lifescienceangels.com/;  Global Bio Fund: https://www.globalbiofund.org/; Orion Biotechnology: https://orionbiotechnology.com/; Progenerative Medical, Inc:https://progenerative.com/

 
_______________________________________________________

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Direct download: HTI_EP02.mp3
Category:general -- posted at: 5:00am CST

Solving the Chicken and Egg Problem

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

In launching a marketplace platform you must solve the chicken and egg problem.

You must have supply to engage buyers and buyers to engage suppliers.

In the early days, you’ll need to do things that don’t scale such as recruit supply that is not in the network for a particular buyer and more.

Here are some steps to overcome the chicken and egg problem:

Build a community out of suppliers and buyers and then connect them for the transaction.

Offer free tools that engage buyers and suppliers into the same group.

Provide supply in the form of a showcase as a starting point.

Start with existing networks such as angel groups, universities, or social groups and then transact the business.

Sign up a business that will pay for the supply.  This funds the operation while you find other buyers to join the platform.

Scrape the website for lists of buyers and sellers.

Start small and then expand to a larger supply and number of buyers.

 

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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Direct download: Solving_the_chicken__egg_problem.mp3
Category:general -- posted at: 5:00am CST

Marketplace Platform Evolution

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

Marketplace platforms evolve over time.

Platforms start by connecting buyers and sellers.

They follow with additional services such as ratings and reviews, background checks on the buyers, and quality control on the suppliers.

Over time, the marketplace can evolve further by moving into delivery of the products and services.

By controlling the delivery, the platform can control the overall customer experience and obtain additional revenue.

The platform could also expand into providing supply.

Finally, the platform could evolve into a data analytics platform providing key insights into purchasing trends.

It all starts with matching buyers and sellers but that’s only the beginning.

 

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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Direct download: Marketplace_Platform_Evolution.mp3
Category:general -- posted at: 5:00am CST

Marketplace Services

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

In setting up a marketplace business, the more services you offer will lead to a better customer experience which leads to better retention.

Consider adding these services to your marketplace platform:

Manage the transaction from discovery to fulfillment of the service.

Provide ratings of the buyers and sellers to foster transparency.

Review the content on the platform from buyers and sellers to ensure quality and accuracy.

Provide customer service to help resolve issues.

Continue to expand inventory to provide more choices to the buyers.

Design financial transactions into the platform to provide a seamless experience.

Install an easy to user interface. 

Provide success stories from other users both buyers and sellers.

Customers expect continual improvement of the platform over time so look for ways to improve the experience.

 

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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Direct download: Marketplace_Services.mp3
Category:general -- posted at: 5:00am CST

Metrics for Marketplaces

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

In running a marketplace business there are several metrics for measuring the performance of the market and platform.

Here are some key metrics to consider:

Gross Volume -- this is the total amount of goods and services transacted on the platform.

Activity -- the number of times a buyer engages the platform yielding the number of daily and monthly active users.

Average transaction value -- the average value of the transaction indicates the size of the market. 

The concentration of buyers and sellers -- this measures the percent of business that comes from the top five, ten, or twenty buyers or suppliers on the platform highlighting over-concentration.

Cost of acquisition of suppliers and buyers -- this calculates the cost of placing inventory on the platform and acquiring buyers.

The lifetime value of buyer -- this estimates the value of the purchases over the lifetime of the buyer on the platform.

Multitenating -- this calculates the number of sellers and buyers who are also on other platforms.

Switching costs -- this calculates the cost of the buyer or seller to move to another platform.

Take rate -- the percent of the sale that is taken for the transaction.

Measure these key marketplace metrics to better understand your marketplace 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.

_______________________________________________________

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Direct download: Metrics_for_Marketplaces0A.mp3
Category:general -- posted at: 6:30am CST

Network Effects in Marketplace Businesses

 

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

 

Marketplace businesses derive value from the network effects that come with matching buyers and sellers.

 

The greater the number of buyers and sellers the more attractive the platform.

 

One side of the marketplace can attract the other side.

 

If one side is using the software platform, then the other side will follow.

 

One side can demand the other use the platform as the financial transaction or the flow of goods and services goes through it.

 

Marketplace businesses can use network effects to connect more suppliers to the business as well.

 

By connecting suppliers through the software platform you can decrease costs and increase the size of inventory.

 

Marketplaces with network effects give the business a moat against competition as the competitor is not competing against one company but rather a network of companies.

 

Marketplace businesses can use the network effects to create new products and services by bundling together a collection of services from multiple suppliers.

 

Marketplace businesses can scale faster and cheaper because they are aggregating supply from multiple businesses rather than just their own business.

 

Finally, marketplace businesses use network effects to retain users as it’s sticky.

 

Once in place, network effects can bring exponential growth to 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.

_______________________________________________________

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Direct download: Network_effects_in_marketplace_businesses.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Matt Brugner, Founder of Stewardship Partners, LLC.

Located in Dallas, Texas, USA, Stewardship Partners, LLC is a traditional search fund seeking to acquire one business and steward it into its next phase of growth. The fund is backed with capital from a handful of committed capital funds, family offices, and entrepreneurs.

Stewardship Partners, LLC is looking to acquire a vertical B2B software business (bootstrapped or lightly funded, $2-$10mm of ARR) or vertical B2B tech-enabled services business ($5-$40mm of Revenue) in the US. They are a great fit for founders who care deeply about their culture, values, and people AND are ready to take chips off the table and bring in a new operator.

Matt is a passionate, values-driven leader who founded Stewardship Partners to acquire, lead, and grow one exceptional business. His Christian faith drives his passion to serve others as a leader and investor.

Matt was proudly born in Texas and grew up in St. Louis, MO. He attended Baylor University, where he majored in entrepreneurship and finance. During school, Matt launched a student housing business, Student Property Group. After Baylor, he joined the Goldman Sachs Private Bank, originating debt for some of the most successful entrepreneurs and private equity funds in the US and Europe.

Prior to founding Stewardship Partners, Matt completed his MBA at Northwestern’s Kellogg School of Management with a focus on Entrepreneurship through Acquisition (“ETA”).

Matt talks about his unique investment model centered on values informed by his faith. Matt focuses on vertical markets and values-based businesses, looking for B2B SaaS companies emphasizing growth, profitability, and criticality to end-users as key criteria. He highlights the importance of fit and relationships between the entrepreneur and the buyer in the search fund model.

Visit Stewardship Partners, LLC at www.stewardship-partners.com, and on www.linkedin.com/company/stewardship-partners-llc.

Reach out to Matt at matt@stewardship-partners.com, and on www.linkedin.com/in/mattbrugner

 

_______________________________________________________

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Direct download: Matt_Brugner.mp3
Category:general -- posted at: 5:00am CST

Expanding a Marketplace Business

 

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

 

After launching your marketplace business you’ll start work on expanding it.

 

For the supply side, you want to increase the engagement with the suppliers.

 

Instead of being one source of many to your suppliers, you want to become their primary source.

 

You can do so by setting up technical connections with the suppliers making it more difficult for others to gain access.

 

You can increase support to turn your suppliers from users into advocates promoting your brand.

 

For the demand side, you want to expand the number of buyers.

 

This could be done by adding more buyers from other geographies or finding new types of buyers in the same geographic area.

 

This could also be done by expanding the products offered to the buyers so you have the best or most selection.

 

Finally, you can expand your marketplace to a larger geographic area such as Europe or Asia connecting both buyers and sellers.

 

This could eventually lead to a global marketplace. 

 

Expanding your business will require a new set of tactics from those used in launching the marketplace.

 

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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Direct download: Expanding_a_marketplace_business.mp3
Category:general -- posted at: 5:00am CST

Narrow Marketplaces

 

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

 

Marketplaces can be built vertically targeting one sector or horizontally targeting multiple sectors. 

 

It’s best to start with a narrow marketplace focused on one vertical.

 

The cost of starting it is much less than a broad one.

 

By going narrow, you don’t have to generate a huge amount of supply.  

 

You can start with a limited supply and grow over time.

 

You can bootstrap the business model by providing services that don’t necessarily scale. 

 

You can provide premium services that build brand loyalty.

 

With a vertical approach, you can customize the product for the market more so than for a horizontal one.

 

With such a focus you can build a team that is more specialized to deliver that product.

 

While the target market may be small initially, over time you can expand into other areas.

 

Amazon began its business with the motto, ‘We sell books online.’

 

They later expanded into other areas.

 

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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Direct download: Narrow_marketplaces.mp3
Category:general -- posted at: 5:00am CST

Fintech’s Role in Marketplace Businesses

 

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

 

Fintech can play an enabling role in a marketplace business.

 

In addition to matching suppliers and buyers on a platform, fintech tools enable additional services that provide stickiness to the business.

 

As the regulatory nature of fintech continues to constrain the growth of businesses, alternative financing becomes more prevalent.

 

Marketplace businesses can gain an advantage by using fintech-enabled tools.

 

Adding a fintech solution to the mix can enable a seamless buying experience for the user.

 

Fintech tools such as payment and loan facilities provide stickiness to the platform and a barrier to entry.

 

Fintech tools provide another revenue source by charging for the use of the payment facility.

 

Providing identity checks on suppliers attracts more buyers who want to know who they are buying from.

 

Offering insurance is another service marketplace businesses can provide.

 

Fintech tools provide additional revenue and stickiness to a marketplace 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.

_______________________________________________________

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Direct download: Fintechs_role_in_marketplace_businesses.mp3
Category:general -- posted at: 5:00am CST

How To Launch B2B Marketplaces

 

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

 

In addition to B2C marketplaces, there are B2B marketplaces that are gaining rapid adoption.

 

To launch a B2B marketplace consider the following tactics:

 

Find participants who are not monetizing their value and help them capture it through a marketplace.

 

Look for disruptions in the marketplace or economy as an opportunity to launch a B2B marketplace.

 

Start with niche segments to gain traction and awareness before moving to core products.

 

Look for markets that are highly fragmented as these are easier to install a marketplace business.

 

Provide no-cost or low-cost access to the marketplace so users can try it out.

 

Provide cybersecurity and identity checks as businesses care a great deal about who they interact with.

 

Provide consulting services in addition to the marketplace product.

 

Design your technology into the B2B business so it’s easy to use and hard to replace.

 

Focus on new products and services rather than existing ones as it will be easier to set up a flow of 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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Direct download: How_to_launch_b2b_marketplaces.mp3
Category:general -- posted at: 5:00am CST

Assessing a Marketplace

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

In setting up a marketplace business here are some key points to consider in choosing a potential marketplace. 

The marketplace business model provides an advantage for the buyer, the seller, or both.

The more often the buyers and sellers use the platform -- daily, weekly monthly, or more --  the more valuable it will be.

The higher the selling price the easier it will be to scale revenue.

The more people who need the platform for either buying or selling, the larger the potential market size.

The faster you can build the network, on either the buyer or seller side, the faster your platform can scale.

The more fragmented the market, the more buyers and sellers will need the platform.

The higher the growth rate of the market the greater the potential business.

Look for these factors in selecting a sector for a marketplace business model.

 

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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Direct download: Assessing_a_marketplace0A0A.mp3
Category:general -- posted at: 5:00am CST

On this episode of Investor Connect, Hall welcomes Jeffrey Kamys, CEO of Inherent Wealth Fund.

Located in San Francisco, California, USA, Inherent Wealth Fund is a registered investment adviser focused on thematic and sector-specific investing. They implement innovative strategies and wealth management solutions for institutions. Inherent Wealth Fund fully understands how technological advances impact the market and strive to be ahead of the curve with its approach.

Jeffrey Kamys has decades of experience working in the technology industry as well as the analytics field. Jeffrey is the Founder, Chief Investment Strategist & Portfolio Manager at Inherent Wealth Fund. Inherent Wealth Fund is the Investment Advisor to the iBET Sports Betting & Gaming ETF, the only actively managed sports betting & gaming ETF. The iBET ETF is a basket of stocks representing the sports betting, casinos, and gambling sector, including but not limited to DraftKings, Penn National Gaming, Caesars, MGM, and Wynn.

Jeffrey is the Founder, Creator & Owner of Dr. Stats Fantasy Sports. After an injury sidelined his dream of playing baseball, Jeffrey wanted to remain a part of the sport. He could no longer take the field, but he *could* use his knowledge to create a new business. Dr. Stats Fantasy Sports was officially established in 1996 and was a big pioneer of the fantasy sports industry. Initially starting as a “snail-mail” business, Dr. Stats became an early adopter of the “World Wide Web” and took its business to “the Interwebs.”

Jeffrey shares his background as a former athlete and creator of one of the first fantasy sports sites, Dr. Stats. He discusses the evolution of his career from player evaluations to sports betting and stock analysis. Kamys also emphasizes the role of AI in sports betting, including data analysis, odds calculation, and identifying new betting opportunities.

Visit Inherent Wealth Fund at www.inherentwealthfund.com/etf/ibet/, and on www.linkedin.com/company/inherent-wealthfund.

Reach out to Jeffrey at jeffrey.kamys@inherent.com, and on www.linkedin.com/in/jeffrey-kamys-19159174/ 

 

_______________________________________________________

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

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Direct download: Jeffrey_Kamys.mp3
Category:general -- posted at: 5:00am CST

Launching a Marketplace Business

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

In launching your marketplace consider starting with a niche.

Focus on what your team does best.

Choose a niche in the sector that you can easily gain access to the supply side.

This could be either by geography or by service offering.

Offer above-average service to launch the marketplace. 

As Paul Graham wrote, in the early days you must do things that don’t scale.

Even though the niche may not be a large market, you can expand to other niches later.

Amazon began by selling books online but later expanded into other areas.

Pick one or two methods for generating supply.

This could be direct sales, referral partners, word of mouth fostered by social media, value-add products for the supply side, or events.

Once the supply side is in place you can drive demand through marketing, SEO, direct sales, and events.

 

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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Direct download: Launching_a_marketplace_business.mp3
Category:general -- posted at: 5:00am CST

How To Start a Marketplace Business

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

In starting a marketplace business you must consider how to structure it and then how to build the supply and demand sides of it.

For the structure, you can target a specific vertical by focusing on one segment or go horizontal and cover the entire space.

To go horizontal you need to reach scale quickly.

To go vertical you must focus on finding a product/market fit for that segment.

The horizontal approach takes a great deal of resources while the vertical approach allows for a lower cost to enter the market.

The next step is building out the supply and demand sides of the marketplace.

The challenge is building out the supply side in a cost-effective way.

Scraping the web for the supply side is one tactic.

Providing value-added products to build the supply side is another.

Once you have a critical mass of supply you can engage the demand side.

Most markets only support a few major players so it’s important to reach critical mass in the sector.

 

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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.

Direct download: How_to_start_a_marketplace_business.mp3
Category:general -- posted at: 5:00am CST