Fri, 1 September 2023
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.
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 31 August 2023
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.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 30 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 29 August 2023
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.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 28 August 2023
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.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 25 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 25 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 24 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 23 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 22 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 21 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 18 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Price_comes_before_product_development.mp3
Category:general -- posted at: 5:00am CDT |
Fri, 18 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 17 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 16 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 15 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 14 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 11 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 11 August 2023
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-.
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 10 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 9 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 8 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 7 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 4 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 4 August 2023
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.
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 3 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 2 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 1 August 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 31 July 2023
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. _________________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 28 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 28 July 2023
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: For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 27 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 26 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 25 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 24 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 21 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Network_effects_in_marketplace_businesses.mp3
Category:general -- posted at: 5:00am CDT |
Fri, 21 July 2023
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
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 20 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 19 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 18 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Fintechs_role_in_marketplace_businesses.mp3
Category:general -- posted at: 5:00am CDT |
Mon, 17 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 14 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 14 July 2023
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 Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 13 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 12 July 2023
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. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 11 July 2023
What Is a Marketplace Business Model? Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The marketplace business model is becoming increasingly popular among startups. A marketplace business connects buyers and sellers through a platform. The platform facilitates the transaction and does not produce or provide the product or service. The platform often handles the payment, facilitates the logistics, and more. Examples of companies using the marketplace model include Uber and Amazon Business. Marketplaces can be business-to-consumer or business-to-business models. Uber is primarily a business-to-consumer model in that it facilitates rides for end users. Amazon Business is an example of a business-to-business marketplace that lets a business sell its services to another business. There are also consumer-to-consumer marketplaces such as eBay when it began in which consumers would sell their garage sale items to other consumers. There are vertical and horizontal marketplaces. Vertical marketplaces focus on a single category or market. Horizontal marketplaces sell across segments. Marketplaces use different monetization models including listing fees, transaction fees, or subscriptions.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 10 July 2023
Preparing for a Secondary Sale Transaction Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing A secondary sale is important to the founders and employees of a company. It gives them the opportunity to sell their shares to gain liquidity in advance of the company’s exit. Here are some key issues to consider: Founders normally receive common shares when launching the company. There are advantages for founders who have preferred shares. Founders should consider starting with preferred shares instead of common ones. Generate interest in the secondary sale to create demand. A priced fundraise often raises the interest of investors and provides a base price for the shares. Contact funds and investors interested in secondary shares during the fundraise. There are investors who regularly buy secondary shares and should be put on notice about your pending offer. Finally, position the business so it is attractive to investors. Ensure the company’s metrics and market position are aligned with investor's expectations.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Preparing_for_a_secondary_sale_transaction.mp3
Category:general -- posted at: 5:00am CDT |
Fri, 7 July 2023
What Companies Should Know Before Allowing Secondary Sales? Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Companies who want to give their employees the opportunity to sell their shares should consider the following: Set specific timeframes to allow for stock sales by the employees. This limits the distraction of employees and reduces the amount of disclosure the company must do. Prepare disclosure statements for the employees to use and gain board approval. Many companies set the selling timeframe to come just after a fundraise. The share price has been set and can be used for the secondary transaction. The company should provide standard disclosure information about the company such as risk factors and current financials. Company-made projections are rarely provided as it’s very difficult to make accurate predictions. The price set for the secondary sale will impact the next 409A valuation that sets the price of stock options. The secondary sale price sets a floor for the options price.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: What_companies_should_know_before_allowing_secondary_sales.mp3
Category:general -- posted at: 5:00am CDT |
Fri, 7 July 2023
On this episode of Investor Connect, Hall welcomes Nitin Rai, Founder and Managing Partner at Elevate Capital. Located in Hillsboro, OR, USA, Elevate Capital is a Diversity, Equity, and Inclusion focused fund that invests in US-based early-stage startups led by underrepresented entrepreneurs, including women, BIPOC, LGBTQ+, and veterans. Launched in 2016, it is one of the US's first institutional inclusive venture funds. It includes three funds: Capital Fund I and II, and an Inclusive Fund, a pre-seed and seed-stage fund that invests in diverse and underserved entrepreneurs nationwide. Since 2016, Elevate Capital has invested nearly $45 million in 57 startups of which 95% are led by diverse founders. These companies have raised follow-on funding of over $280 Million, with a market cap of more than $1.2 Billion and created more than 1,000 jobs. These companies also report 50% of their employees as diverse. Nitin is a highly successful software technology leader and entrepreneur turned Venture Capitalist. Nitin is the Founder and Managing Partner of Elevate Capital. Nitin serves as a board member on many of Elevate Capital’s portfolio companies. Nitin is also a successful entrepreneur. He started his career in Silicon Valley as an engineer at two startups. In 1994, he founded First Insight Corporation, a highly successful electronic health records (EHR), practice management, and ophthalmic image management software company, and a revenue cycle management service (Fast Pay Health) for eye care professionals based in Hillsboro, Oregon, and Pune, India. First Insight is a leader in the optometry, ophthalmology, and optical software industry with its flagship store, MaximEyes. Nitin shares his background as an immigrant from India and his journey as an entrepreneur before starting Elevate Capital. Nitin highlighted the challenges of starting a VC fund in the current economic climate and the limited availability of institutional capital. He also talked about the opportunity to start a VC fund and Elevate Capital's hands-on approach in supporting portfolio companies through board seats, advisory roles, fundraising assistance, and strategic guidance in strategy and go-to-market plans. Visit Elevate Capital at elevate.vc or follow Elevate Capital on Twitter, Facebook, and LinkedIn. Reach out to Nitin at nitin@elevate.vc, www.linkedin.com/company/elevate-capital-fund/, and on twitter.com/NitinrRai _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 6 July 2023
Valuation Method for a Secondary Sale Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In pricing a secondary sale here are some valuation techniques: Estimate the value of the equity by multiplying the revenue by the multiple for similar companies. For example, SaaS companies are sold for a multiple of 10X revenues. Reduce the value of any debt the company has. Divide the remaining value by the number of outstanding shares. Use their 409A analysis to compare to the number you calculated. Remember, 4o9A’s tend to push the share price down to provide lower-cost stock options to employees. Other factors to include are time to exit and if the company is a candidate for an IPO or a buyout. Finally, look for any recent secondary share sales as a guide to setting the current price.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Valuation_method_for_a_secondary_sale.mp3
Category:general -- posted at: 5:00am CDT |
Wed, 5 July 2023
Types of Buyers of Secondary Shares Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are several types of buyers for secondary shares. Each has its own motivation for doing so. Here’s a list to consider: Employees often want more shares of a startup that is doing well. They may also want to sell their shares to pay for expenses such as college tuition for a family member. When an employee leaves the company will oftentimes let the employee sell their shares. Venture capital funds will sell secondary shares to provide liquidity to their limited partners. For companies that are not on track for an exit soon, some venture capital funds sell their shares to wind down the fund. Companies that are maturing often need cash to retain employees or replace an investor that wants to exit the investment. They also can sell company shares to raise new capital for growth objectives. There are several types of buyers each with their own incentive to sell their shares on the secondary market.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 4 July 2023
Tax Issues With Secondaries Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are tax issues associated with a secondary sale. Here’s a list of issues to consider: Gains on secondary sales are taxed based on the holding time of the shares. If less than one year, then ordinary income tax rates apply. If longer than one year then the capital gains tax rate applies. If the purchase is made at a premium price, then additional tax issues arise. If made to an employee then the IRS may treat a portion of the gains as compensation and not as capital gains. If made to a third party investor the IRS may also determine a portion of the sale to be compensation and require the company to apply withholding. The identity of the buyer, the type of sale, and the purpose determine the tax treatment where premium pricing is used. Stock purchases only from employees will be deemed as compensation. If the purpose of the sale is for reducing dilution, gaining control, or addressing a company in need then those sales will not be deemed as compensation.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 3 July 2023
Pricing Secondary Shares Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In selling secondary shares a price must be set. Since the shares are in a private firm there’s no market to review for a list price. Here are some factors to consider in pricing a secondary sale: Are the shares preferred stock or common stock? Preferred stock has preferences such as liquidation preference and takes precedence over common stock. Common stock is the equity type issued to founders and employees. It typically has no special rights beyond ownership. Since the stock is not publicly traded it’s considered illiquid. The price reflects illiquidity and is often set at a 10% to 50% discount to the last priced round. Time to exit for the startup is another key factor. Most secondary sales come in the last three years of the startup's life. Finally, the health of the company impacts the price as the stronger the growth rate and metrics the higher the price. Preferred stock, shorter time to exit, and a high growth rate will yield a higher secondary share price.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 30 June 2023
Type of Secondary Transactions Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are several types of secondary transactions as follows: Confidentially marketed public offerings -- these offerings go to institutional investors. These transactions use an S3 form to provide shares to known buyers. Bought deal -- these shares are bought by an underwriter who takes the risk of the transaction. Since the risk is shouldered by one underwriter the shares are typically priced higher. PIPEs -- these are Private Investments in Public Entities and give private investors the ability to buy shares directly in the company without public disclosure. PIPEs are more heavily discounted. Block trades -- these are transactions used by smaller sellers to sell their shares directly to another buyer without having to go through an underwriter. These transactions provide alternative ways of completing a secondary sale.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 30 June 2023
We are excited to announce a new segment for you, How to Invest Series. Where we will be revisiting some of the smart insights, tips, and advice from our past guests on the show. To start off the series we will be touching on the Biotech and life science subject. So, let's dive right in and hear the answers to the question I made to each of our guests back in 2021: What makes for a successful company in this segment? Our first five guests are: Carter Williams, CEO and Managing Partner of iSelect Fund, Maximilian Bade, Founding Partner at Nucleus Capital, Orrin Ailloni-Charas, MD, who was the Managing Partner of the Global Health Impact Fund, Eyal Lifschitz, Co-Founder and Managing Partner at Peregrine Ventures, and Ron Paliwoda, President of the Paliwoda Group. Carter Williams, a seasoned innovator and venture investor, has an extensive background in managing R&D and spearheading technological advancements. Currently, Carter leads iSelect, an early-stage venture firm based in St. Louis, which focuses on investing in companies tackling global issues with financially attractive business models. Maximilian has founded Nucleus Capital to support purpose-driven entrepreneurs addressing systemic challenges to planetary health. Nucleus Capital is a venture capital firm focused on investing in pre/seed stage companies at the intersection of synthetic biology, climate- and food technology. Dr. Orrin Ailloni-Charas is an experienced anesthesiologist and investment leader, with a diverse background in healthcare. In 2021, he was the CEO and Managing Partner of the Global Health Impact Fund (GHIF), a physician-led venture fund. Eyal, is an experienced entrepreneur and VC partner, with over 20 years of experience managing and investing in healthcare companies. Peregrine Ventures is a leading Israeli capital fund focused on high-tech companies in the life sciences, pharma, and digital health. Ron Paliwoda is an accidental entrepreneur and seasoned investor, primarily through the Ventures arm of The Paliwoda Group. Links from today's show: iSelect Fund: www.iselectfund.com; Nucleus Capital: www.nucleus-capital.com; Global Health Impact Fund: globalhealthimpactfund.com/; Peregrine Ventures: www.peregrinevc.com/; Paliwoda Group: www.paliwoda.com. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 29 June 2023
How Do Secondary Sales Work? Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Secondary sales typically occur with later-stage startups. Investors who want shares in a company will buy the shares from founders, employees, or other investors. The price is typically at a discount to the last priced round such as 15 to 30%. The seller must find a buyer for the stock. This could be existing investors in the company who want a larger position or new investors. Oftentimes investors who could not get into the investment round will buy shares through the secondary market. The company itself may know of potential buyers of the stock. There are websites that match investors to sellers of the stock. There are venture funds that focus on buying secondary shares as well. Investors use SPV or special purpose vehicles to structure the purchase. The purchased stock has a lock-up period and cannot be sold for a period of time. Those who sell the stock will need to take taxes into account.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 28 June 2023
Customize the Pitch for the Investor Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Customize the pitch for each investor. Research the investor before the pitch to learn more about their investment thesis. Review their portfolio of startups to see what is common about them and how your deal fits. For each investor choose three points to highlight that you think will connect with the investor. If the investor is interested in traction then focus on the growth rates and metrics in your deal. If the investor is interested in the team, then focus on what each team member is doing. Give the investor the chance to ask questions during the pitch so you understand their concerns. Have answers for the questions posed as you’ll hear some questions repeatedly. Oftentimes you’ll be in a place where the slides are not available. You need to know your pitch well and can give it even without the slides. After some practice, you’ll be able to identify investor types and can automatically customize the pitch for them.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 27 June 2023
Challenges in Secondary Sales Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are several obstacles to overcome in completing a secondary sale. Here are some challenges to consider: Board approval -- In many cases, the company must approve any founder shares being sold. Right of First Refusal -- companies that have raised funding have Rights of First Refusal on any offers of stock sales. The company must sign off those rights to allow others to purchase the shares. Co-Sale Rights -- Investors may have Co-sale rights which require any purchasers of the company's stock to purchase an equal amount from the investors. Corporate Laws -- some states have regulations around the re-sale of the company's stock. Transfer restrictions -- some companies have restrictions on the transfer of stock and must approve any transfers. 409A valuation issues -- the company uses a 409A valuation to set the price for employee stock options. Any secondary sales of the company's stock above that 409A price may increase the 409A valuation impacting the price of employee stock options. Review these issues before pursuing a secondary sale.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 26 June 2023
Benefits of a Secondary Sale Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. A secondary sale brings several benefits to the stakeholders in a startup. Companies stay private much longer than before. Those in the company need access to capital. For founders, a secondary sale provides some liquidity in the near term giving them the opportunity to continue growing their business for a larger exit. For employees, a secondary sale provides access to liquidity reducing job hopping to find a larger salary elsewhere. For the early stage investors, the secondary sale provides returns before subsequent larger rounds of funding dilute them. Institutional investors can use the secondary sale to buy into the business bringing additional expertise as well as cleaning up the cap table of smaller investors. This makes the business more attractive to the eventual buyers of the business.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 23 June 2023
Why Do Investors Want Secondaries Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Secondaries stands for secondary sales which refers to selling privately held stock in startups to other buyers. Investors buy secondaries instead of waiting for the next fundraise round. By buying now rather than later the investor can lock in a lower valuation. Investors in secondaries provide liquidity to other investors who trade off some portion of the valuation for that liquidity. Investors in secondaries buy into proven startups and are not at risk to go under for startup failure. As companies stay private longer, there are more secondaries available for purchase. Employees selling their shares after a poor-performing quarter often drop the asking price providing an opportunity for investors to gain more shares at a lower valuation. Later-stage companies come with substantial market and performance data on which to make an investment decision, unlike early-stage companies where little data is available. Investors often purchase secondaries to gain exposure to new technology markets. Finally, investors often use secondaries to diversify their portfolios.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 23 June 2023
On this episode of Investor Connect, Hall welcomes Zeke Trezise, Associate investor of New Stack Ventures and a member of the Full Ratchet podcast team. Located in Chicago, IL, USA, New Stack Ventures is specialized in pre-seed and seed funding for startups led by entrepreneurs outside the traditional Silicon Valley mold. With a mission to empower underrepresented talent, they invest in a diverse range of sectors such as B2B SaaS, Fintech, and Healthcare. They also stay ahead of industry trends, ensuring their agility in the ever-evolving startup financing landscape. In addition to financial support, New Stack Ventures offers strategic guidance and mentorship to portfolio companies. The Full Ratchet podcast is a popular and influential resource in the world of venture capital and startup investing. Hosted by Nick Moran, a seasoned venture capitalist himself, the podcast features in-depth conversations with industry experts, successful entrepreneurs, and thought leaders, providing valuable insights and analysis on various topics related to startups, fundraising, and investment strategies. Zeke Trezise is a dedicated venture capital investor with expertise in early-stage investments. His diverse industry knowledge has helped build a balanced and robust portfolio for New Stack Ventures while supporting the success of numerous startups. Zeke comes from a family of entrepreneurs and has always had a strong interest in business and finance. Zeke's background includes working with startups, sourcing new promising startups, and assisting with diligence on investment deals. He believes in the importance of focus and clarity in startups, and his role primarily revolves around deal flow and evaluating potential investments. Zeke is also interested in the trends and developments in the venture capital world, including the democratization of access to investments and the impact of crowdfunding. Visit New Stack Ventures at newstack.com, www.linkedin.com/company/new-stack-ventures, and on twitter.com/newstackvc?lang=en. Listen to The Full Ratchet podcast here fullratchet.net Reach out to Zeke at zeke@newstack.com, and on www.linkedin.com/in/zeke-trezise _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 22 June 2023
Why Companies Delay IPOs Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Companies stay private much longer than they used to. Previously companies ran an Initial Public Offering to gain access to the public markets for financing. Companies delay their IPOs for any of the following reasons: Avoid the cost of going public which is fairly high given the regulatory requirements. Maintain a level of privacy over their operations and financials by remaining private. Continue to operate the business as usual with their own board of directors rather than gaining public scrutiny that comes with a public company. Avoid the rollercoaster ride of sentiment in the public markets. The private markets today provide sufficient capital to pre-IPO companies so the need for capital no longer drives companies to go public.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 21 June 2023
What Are Secondaries Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Secondaries stands for secondary sales which refers to selling privately held stock in startups to other buyers. This arises from several sources such as investors who want to get into the deal after the fundraise is complete or employees who want to sell some of their shares. Secondary sales are on the rise since companies are staying private much longer. Investors often want to apply some of their startup capital into companies in the three years before an anticipated IPO as investing in the first three years of the startup’s life translates into a long holding time. There are many sources of secondary shares including: Employees at companies doing well. Websites that match investors to startups. Venture funds that focus on secondary sales. A secondary sale is different from a fundraise as the latter involves issuing more stock thus diluting the existing shareholders. A secondary sale is a transfer of ownership and therefore there’s no dilution to the current investors. Most secondary sales come with a three-day lockup before re-selling the shares.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 20 June 2023
Preparing the Diligence Documents Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors interested in your startup will want to perform due diligence on the deal. Diligence is a standard process investors go through to review all the relevant documents and checkmark all the boxes before investing. In preparing your diligence documents consider the following: Start with a checklist of potential items to include. Most due diligence lists are comprehensive and include many items not applicable to an early-stage company. Start with the standard documents which include the following: Entity filings -- investors want to see documentation on your LLC or C-Corp filing. Many investors only invest in Delaware C-corps. You may need to change your entity filing to meet the investor’s requirements. Patent filings -- half the value of submitted patent filings are for investors as it demonstrates a competitive advantage. Consider filing provisional patents in advance of a fundraise. These are relatively simple documents compared to full patent submissions. Three to five-year financial forecasts -- you’ll need detailed financial projections showcasing your vision of how you will spend the raised funds and the business results from it. This needs to be bottom-up analysis and not a top-down estimation. Cap table -- this is the list of the current equity owners and what percentage each one has. Organization chart -- this shows the current employees and their positions. Gather these core documents into one folder that you can give to interested investors. If you consider the information confidential, then you can ask the investor to sign a Non-Disclosure Agreement.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 19 June 2023
Customize the Pitch for Your Investor Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In pitching investors, you’ll find that each investor is unique. Customize the pitch for the investor by emphasizing the elements of your deal that intrigue the investor. If the investor focuses on the business model, then talk about how your business model works and why it will be successful. If the investor focuses on the team, then spend time talking about the unique skills the team brings. While the slides may be standard for each pitch, the time spent on each slide should align with the interests of the investor. Turn your pitch from a monologue into a dialog with the investor. Encourage questions along the way to surface areas of interest and disinterest. Identify the risk points that the investor sees in the deal and focus on how you mitigate those risks. Some investors are impact investors and want to see how your startup will provide a positive impact in the environment, social, or governance realm. For those investors, emphasize your impact metric showing how your startup helps the community. Tailor the presentation to each investor by turning it into a collaborative process.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
Direct download: Customize_the_pitch_for_your_investor.mp3
Category:general -- posted at: 5:00am CDT |
Fri, 16 June 2023
Preparing the Pitchdeck Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In preparing your pitchdeck consider the following: Start with a template slide deck. This ensures you cover all the key points. Each slide is one section of the executive summary. Problem/Opportunity, Solution, Product, Team, etc. Write out on each slide what you want to say about that topic. Use the short bullet point format as long descriptions are not necessary. Go back and convert the bullet points into graphs, charts, and images and polish some into concisely worded bullet points. Walk through the presentation to see how it flows. You may need to move slides around to make the story fluid. If you want to create additional slides then do so but put them at the end of the presentation as Appendix slides. This way you can provide the basic presentation to everyone but have the additional slides for questions that may arise. The key is to identify your message first and then write it out in a manner that best communicates that message.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 16 June 2023
On this episode of Investor Connect, Hall welcomes Zamir Shukho, CEO and Founder at Vibranium VC. Located in San Francisco Bay Area, California, USA, Vibranium VC is a venture fund based in Silicon Valley and led by an international team of serial entrepreneurs. The investment focus is on seed-stage B2B SaaS startups. Vibranium.VC aims to identify future champions and support their rapid growth and global expansion. With Vibranium, every startup becomes STRONGER. Zamir Shukho is the CEO and Founder of the Vibranium.VC venture fund. With 20 years of professional experience, he has a background as a serial entrepreneur having created 10 companies and organizations. Zamir is also an expert in venture capital, management, and corporate innovation. In addition to this, he is a startup mentor and a certified coach of the Stanford I2M program. Zamir shares his expertise in corporate innovation and B2B SaaS. He emphasizes the importance of being a smart investor and providing mentorship support to startups, particularly in the B2B SaaS market. He discusses the challenges of starting a VC fund and the need for a committed and excellent team. Visit Vibranium VC at https://vibranium.vc/, and on www.linkedin.com/company/vibraniumvc Reach out to Zamir atzamir@vibranium.vc, www.linkedin.com/in/zamirshukho/, and on twitter.com/ZamirShukho. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 15 June 2023
Identify the Target Investors Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Once you’ve identified the ideal investor type for your business you’ll need to build a target list of investors to pursue. Research potential investors for their criteria and how it matches your deal. Key areas to look for are industry sector, stage of investment, and geographic preference. Look at the portfolio companies invested to see if they are similar or different from your startup. After building the list then research the investors by looking at their investment history if available. Look for press releases on past fundings as well. Talk with their portfolio companies to find out their experience with the investor. Ask the portfolio company if they think your deal would be a good fit for the investor. If possible, ask the portfolio company for an introduction. Investors will appreciate the fact that you are taking the time to do the homework.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 14 June 2023
Profiling the Ideal Investor Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are several types of accredited investors in the startup world. These include angels, venture capitalists, and family offices. Angels write smaller checks compared to the other two but can provide support for your business as advisors and networkers to raise more capital. Venture capitalists write bigger checks and often take a more proactive role in the company such as a board of directors position. Family offices also write bigger checks but don’t generally provide much in the way of support as advisors or networkers. Most startups approach angel investors first because their diligence is not as demanding and there’s no need for a board at the very early stage. Startups approach either venture capitalists or family offices for bigger checks and to gain more management support for the business. Venture capitalists have a narrow focus on the type of business they fund while family offices have a broader focus. Venture capitalists are primarily focused on the exit while family offices are often mission-driven in their investment. Consider the type of investor you need for your business and target the right investor.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 13 June 2023
Valuation Methods To Consider Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In preparing your fundraise you need to consider your current valuation even if you’re using a SAFE or Convertible Note. There are several methods to use to estimate your valuation. The most often used method is comparables. This method looks at similar companies that recently raised funding and uses that as a proxy for your startup's valuation. It can be a challenge to find companies that fit exactly but if you generalize into tech, healthcare, consumer product goods, etc, you can find comps for your startup. You can also use the rule of four which gives your startup a $1M valuation for each of four points: sales, team, product, and intellectual property. Give your startup the full $1M if you have each category fully developed. If it’s less than fully developed then give your valuation a portion of it. For example, if the product is fully developed and ready for the market then it’s $1M. If on the other hand, it’s in beta form with some functionality then give your valuation $500K. Add up all four numbers to calculate your valuation. There are other methods such as the Berkus method which uses a scorecard and the venture capital method which looks at the exit price and works back to your current valuation. It’s best to try several methods to see which one puts your business in the best position. In the end, valuation is a negotiation and not a formula. No matter what valuation you propose the investor will challenge it so make sure you have solid evidence of your proposed number.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 12 June 2023
Preparing the Business Metrics Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors are looking for a high-growth company with good unit economics. In preparing for your fundraise you need to identify a handful of key metrics that show your growth story. For the seed stage, you must have a run rate that is above 10K revenue per month. For the growth stage, you need to be on a revenue rate of 50K per month or better. Next, calculate your growth rate. You need to be doubling sales year over year. Anything below 50% annual growth rate will not be seen as a high-growth company. Recurring revenue is a priority because it shows predictable growth. In fact, investors care more about predictability than the growth rate. This factor more than any other drives your valuation. Show your cost of customer acquisition and lifetime value in unit economic terms. Choose three key numbers from the above to showcase in your presentation. Don’t make them dig through your spreadsheets to find it. Instead, pull out three numbers and show them.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 9 June 2023
When To Raise Funding Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Most founders go out for a fundraise prematurely because they need money, not because they are ready for fundraising. Consider the following to understand when to raise funding. Have a compelling idea that you can clearly articulate. Have a validated customer, market, and product lineup. Have the investor documents prepared. While you will always be changing the deck it needs to show the core product, team, and fundraise. Be able to demonstrate the product even at an early stage. Show customer interest through engagement as well as revenue. Talk to some investors to identify what risks they see in the deal then show how you mitigate those risks. When you have these things done, then consider launching your fundraise. Engage investors with your deal and remember never to attend an investor meeting empty-handed. Always have some customer engagement to discuss.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 9 June 2023
On this episode of Investor Connect, Hall welcomes Bentley Adams, CEO & Founder at Way. Located in Los Angeles, CA, Way is an intuitive eating app that helps people find peace in their relationships with food and their body. Their mission is to impact health and happiness, with a vision of the future where restrictive diets are a thing of the past - where people discuss listening to their body instead of what diet plan they’re failing on. Through simple, thought-provoking questions and sessions that incorporate intuitive eating practices and apply them within the CBT framework, Way has helped 73% of users think differently about how they eat or actually eat differently (i.e. at the grocery store or restaurant), in the first week. Most apps struggle to get 10% of customers to benefit, ever. Bentley is a mission-oriented, three-time health entrepreneur. The first company was a VC-backed laboratory management company that exited successfully to Private Equity and the second company was a digital marketing agency focused on the consumerization of healthcare and became an Inc. 500 company. Earlier in his career he was a top producer for Beckman Coulter and audited Medicaid while at KPMG, but his passion has always stemmed from his mission to impact health and happiness and his college minor studying physiology, functional movement, and the emotional and psychological layers of helping people find lasting behavior change that betters their whole life, health, and happiness. Bentley shares the unique approach and differentiation of his company, from its competitors Unlike restrictive diets, Way focuses on intuitive eating and cognitive behavioral therapy to create sustainable and long-term changes in eating behavior. Visit Way at www.eatmyway.com/, and on www.linkedin.com/company/eatmyway. Reach out to Bentley at bentley@eatmyway.com, and on www.linkedin.com/in/bentley-way. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 8 June 2023
Milestone the Raise Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Founders often want to compress their fundraising into one round for the sake of efficiency. While this may sound like a good idea, it’s actually an expensive one for the founder. Raising too much money in the early stages will cost the founder equity dilution. The valuation of the startup is low at the beginning and will rise with more products built and revenue generated. Raise a small amount upfront to get the business going such as $250K. If you try to raise less than $250K most angels and venture capitalists will not consider this enough to build something meaningful. Take your overall fundraising and break it into smaller milestones such as $500K for a seed round. It’s often the case that you will need to raise another $500K a year later which some call a seed plus round. It’s still seed funding and comes at the same terms as before. But it’s easier to raise because you broke a $1M raise into two milestones. This strategy lets you raise funding and then work on the business. For the next round, you’ll need some time to build the product and close customers. A rule of thumb is it takes one year to raise $1M. A $500K raise will come in closer to half a year. When you raise funding it should be a full-time job. The key here is it doesn’t have to be a full-time job for the entire year.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 7 June 2023
How Much Funding To Raise Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. When raising funding consider how much you should raise. Start with the overall amount of funding required to take the business to cash flow positive. This is often a fairly large number for platform-based businesses in a high-growth sector. Take the overall amount of funding and break it down into milestone raises. At the early stage of the business, the valuation is low. As you build the team, the product, and the revenue your valuation will go up. For the first round of funding raise as little as you need to reach the next milestone. If you raise too much funding in the first round you will be giving away too much equity. Save the larger rounds of funding for later when you have a much higher valuation. Pre-seed rounds are often at $250K, Seed rounds at $500K to $750K, and Series A rounds at $1M to $5M. Each round will cost you 20% of the equity. Be careful in setting valuations too high in the first round as you’ll need to at least double that valuation in the next round.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 6 June 2023
Fundraising Timeline Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. For every $1M of funding you want to raise, it will take one year to raise it for early-stage startups. This includes time to prepare the company, the investor documents, and the pitch as well as contacting, pitching, and following up with investors. It’s best to have your pitch deck and financial projections prepared before the fundraiser as well as a basic dataroom with the key documents investors expect. This shows you have the fundraise well organized. Investors have their diligence process and of course, they are very busy so you have to work through their schedule. Fundraising should be a full-time job for the CEO with support from the team for document preparation. The first few investors are the most difficult as every investor wants to go first. Once you reach 50% of your fundraising goal you can estimate the remainder of the raise will take about 30% less time than the first half of the raise. The process may run faster if you have run a startup before, especially if you have had an exit.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 5 June 2023
Fundraise Differences by Stage Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In raising funding over the life of the startup you’ll find there are differences in the fundraise at each stage. The goal at the Seed stage is to show you can sell the product. At this stage, the investors will look primarily at the team since there’s little in the way of product or revenue. You need to show a working prototype and initial customer validation though. You must convince the investor that customers will pay for the product and use it. At the Series A stage, the goal is to show you can grow the business. At this stage you need to show a repeatable and predictable process for acquiring the customer, delivering the service, and retaining them. Show a sales funnel with prospects tracking through the process of turning into customers. At the Series B stage, the goal is to show you can scale the business. In this stage, you need to show you have growth drivers built into the business that scales the company. This includes systems that can drive scale growth such as a partner network, sales force capability, and ability to expand into new markets with the same platform. At each stage, the pitch deck will need to reflect the goal for the fundraiser and demonstrate what the business is doing to achieve it.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 2 June 2023
Von Restorff Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The Von Restorff effect is defined by Wikipedia as an item that sticks out and is more likely to be remembered than other items. The startup pitch that provides something unique will be remembered more than the others. To use the Von Restorff effect in your pitch consider the following: Highlight key elements of your message so it is visually distinctive. Use graphs or charts to help your presentation stand out from text-only slides. Highlight words or phrases to emphasize key points. Use GIFs with motion to capture attention. The goal is to take the investor off ‘autopilot’ and get them to consider the information more deeply. Presentations that are distinct and stand out from the others will be remembered by investors. By standing out from the crowd investors will consider the deal on its own merits rather than in comparison to other deals.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ 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 Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 2 June 2023
On this episode of Investor Connect, Hall welcomes Liam Krut, Investment Partner, at Reinforced Ventures. Located in Pittsburgh, Pennsylvania, USA, Reinforced Ventures invest in overlooked areas of deep tech and have a network of over 1700 experts. The company was founded by technologists with a mission to serve and fund the next generation of commercial infrastructure in software and autonomous systems at their source in Pittsburgh, PA. Reinforced Ventures was selected into the 2022 Top 50 Emerging Managers by Weekend Fund. Liam works full time with Reinforced Ventures, previously a private equity diligence consultant for software company acquisitions with computational biology background at CMU, research experience at Harvard/MIT, and founder of a biotechnology and a cybersecurity company. Liam's focus is biotechnology investments. Liam dives deep into the deep tech space, all the risks and returns, the outstanding approach of Reinforced Ventures, and much more. Visit Reinforced Ventures at reinforcedventures.com/, and on www.linkedin.com/company/reinforced-ventures/. Reach out to Liam at liam@reinforcedventures.com, and on www.linkedin.com/in/williamkrut/. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 1 June 2023
What Type of Funding Should You Seek Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. When raising funding consider the type of funding you should pursue. There are many types of funding such as equity funding including angels and venture capitalists. There are debt funding tools including loans and revenue-based funding. There are crowdfunding portals including rewards, equity, and peer-to-peer lending. Before choosing a type of funding, consider the following: Investigate each type of funding and consider where it may fit into your overall funding plan. It’s most likely that you will use two or three types of funding over the life of your business. To understand the type of funding you should seek ask ‘how you will pay the investor back.’ If you plan to pay back when you sell the business, equity funding is an option. If you plan to pay back out of the business's cash flow, then debt funding is an option. If you have a consumer-facing product, consider crowdfunding, which offers both debt and equity options. Break your funding down into component parts and consider using more than one type of funding for your business.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ 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 Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 31 May 2023
Zeigarnik Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The Zeigarnik effect is defined by Wikipedia as uncompleted or interrupted tasks that are remembered better than completed ones. Investors will remember the pitch that leaves them hanging more easily than those with closure. The cliffhanger in a serialized show is remembered because the action is left unfinished. It leaves the viewer with an uncompleted story creating cognitive tension. To use the Zeigarnik effect consider the following: In your pitch close with a cliffhanger ending by discussing an upcoming event such as closing a big sale or hiring a great team member. Use the pending outcome as an excuse to return to the investor later for a follow-up. Investors are often curious about startups and how they turn out later. Use this in setting up a follow-up call by offering to give them ‘the rest of the story’.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ 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 Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 30 May 2023
Verbatim Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The Verbatim effect is defined by Wikipedia as the "gist" of what someone has said that is better remembered than the verbatim wording. Catchphrases and taglines will help investors remember your startup and what it does. Investors remember the essential meaning rather than the specific words you say in a pitch. They will retain the core information but will lose the details. Focus your pitch on the core elements of the deal including the core team, core product, and the core strategy. Fine details will get lost in the process as the investor will only remember the core elements. Avoid multiple scenarios in your pitch and instead focus on the primary scenario as investors will only retain one. In the deck use images, charts, and graphics wherever possible to help communicate those messages. Use mantras, taglines, and catchphrases to communicate the core messages. Make the headlines clear, bold, and compelling. If a detail is important to the pitch then call it out as such and make it a part of the core message. Investors will only remember the gist of the presentation so gear your pitch to highlight the core concepts and skip the extraneous details.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ 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 Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 29 May 2023
Should You Raise Funding for Your Startup Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Before raising funding consider if you should raise funding for your startup. Ask why you need funding and see if you have a specific need for funding tied to growing the business. If you have a business on a high growth trajectory, consider venture funding. If the business is not high growth or you have no vision of selling it, consider other forms of funding such as SBA loans or revenue-based funding. Investors expect a return in the ballpark of five times their investment in five years. Angel and venture capital funding go to those startups. Other factors to consider for venture funding include the following: You have a large addressable market. You are building a business that is scalable. You are using a recurring revenue monetization model. You are building a platform-based business rather than a single product. You plan to sell the business rather than keep it for a lifestyle business. Finally, you have built enough of the business to prove product and market validation -- the product works and people will pay for it.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ 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 Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound.
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Fri, 26 May 2023
Testing Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The testing effect is defined by Wikipedia as the fact that you more easily remember information you have read by rewriting it instead of rereading it. Investors remember what which they recall from memory better than just hearing the pitch again. This comes from research showing that taking a test that requires one to write out a response improves retention better than just rereading the material. This moves the information into long-term memory. Founders can use the testing effect by asking investors questions about the pitch to exercise recall. For example, ask the listener, ‘Remember the problem we are solving?’ Give them time to recall it. If they don’t respond in a timely manner, then give the answer. This avoids the awkward silence that can arise. During the Q&A portion, engage the investor in a dialog that recalls key points such as the problem you solve, the solution you offer, and the traction you have. This will help the investor remember your deal better.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 26 May 2023
On this episode of Investor Connect, Hall welcomes Rodney D'Souza, Managing Director of Horned Frog Investment Network, a program from the Institute for Entrepreneurship and Innovation at Texas Christian University (TCU). Located in Fort Worth, Texas, United States, Horned Frog Investment Network brings together an empowering community of accredited investors to support the next generation of innovators. Their mission is to elevate the position of the TCU Neeley School of Business as an innovative leader in entrepreneurship and investing. They connect founders with value-added investors and leverage the resources of TCU to support success. With the network they source unique, industry agnostic deal flow and deliver exclusive educational and networking opportunities, while also providing hands-on, experiential learning opportunities for top performing business students to help sharpen their skills and strategies. Rodney is widely recognized as an influential figure in the field of entrepreneurship education and research, having achieved notable success as a business owner and angel fund manager. His expertise led him to assume the role of managing director at the institute and the esteemed Davis Family Entrepreneur-In-Residence position within TCU Neeley. Prior to joining TCU Neeley, D'Souza held the distinguished position of the Fifth Third Bank Endowed Professor of Entrepreneurship and served as the director of the Center for Innovation and Entrepreneurship at Northern Kentucky University. Rodney talks about the Horned Frog Network network and what he hopes to accomplish with this unique network.He also shares the first things you should look for when you are looking to make a deal, and much more. Visit Horned Frog Investment Network at neeley.tcu.edu/Centers/Institute-for-Entrepreneurship-and-Innovation/Horned-Frog-Investment-Network, and TCU at www.tcu.edu/, www.linkedin.com/school/tcu-entrepreneurship. Reach out to Rodney at rodney.dsouza@tcu.edu, www.linkedin.com/in/rodneydsouza/, and on www.linkedin.com/in/rodneydsouza/
_______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 25 May 2023
Spacing Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The spacing effect is defined by Wikipedia as information is better recalled if exposure to it is repeated over a long span of time rather than a short one. A series of updates is more effective in communicating your startup story as the investor will remember more than if the story were given in one go. There’s only so much a person can take in during one session. By spreading it over time and in smaller amounts an investor can absorb the information and retain it better. Use a variety of communication methods such as email, conference calls as well as formal pitches. Tie the pitch to real-world situations and events to drive the message home. Stick to the core information and don’t waste time on side stories. Summarize information from the last communication to bridge into the new information. Repeat the key information several times throughout the process. The more the investor remembers about your startup pitch the better.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 24 May 2023
Humor Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The humor effect is defined by Wikipedia as humorous items that are more easily remembered than non-humorous ones, which might be explained by the distinctiveness of humor, the increased cognitive processing time to understand the humor, or the emotional arousal caused by the humor. Startup pitches with humor are more memorable than those without. Founders should include humor in their pitches as investors will more likely remember it. Humor also puts a positive spin on the pitch as it removes negative feelings from the investor. It energizes and increases the interest level of the investor in the subject matter. It improves the investor's perception of the founder as someone who is friendly and approachable. Humor increases learning ability by telling the investor what they want to hear and then following up with what they need to know. Finally, the humor must be positive and appropriate and not come at the expense of anyone.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 23 May 2023
Context Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Context effect is defined by Wikipedia as cognition and memory are dependent on context, such that out-of-context memories are more difficult to retrieve than in-context memories Investors need context in order to understand the startup offering such as the problem to be solved. In pitching founders include basic concepts in the presentation. The problem, solution, and product must be defined upfront. With context, the investor can understand the rest of the pitch such as the business model, competitive advantage, and market positioning. Investors are familiar with the standard list of business models, go-to-market strategies, and revenue models. By connecting to these standards, the founder will find the investor more easily grasps the business of the startup. For example, if your business provides a marketplace matching buyers to users, then highlight the term marketplace business model in your presentation. Show how your business fits the marketplace model in terms of users, monetization, and metrics. Make it easy for the investor to grasp what you are doing with standard startup models. By showing how your business fits into the startup ecosystem, investors will retain it better.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 22 May 2023
Bizarreness Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The bizarreness effect is defined by Wikipedia as bizarre material that is better remembered than common material. Presentations that use bizarre information are more easily remembered than conventional ones. Founders can capture and maintain the interest of investors by using unusual wording or language. This works when the unusual phrase or sentence is mixed with common words and sentences. It causes the investor to spend more time encoding the information. This makes it easier for investors to recall later. The unusual information should create an image that stands out in their mind as distinctive. By repeating it several times, the investor will more easily remember it. In your presentation, reword a key concept such as a value proposition to create a bizarre image. For example, our education software is so effective it could teach a dog how to ride a bicycle. Repeat this several times throughout the presentation.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 19 May 2023
False Consensus Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The false consensus effect is defined by Wikipedia as the tendency for people to overestimate the degree to which other people agree with them. Founders sometimes overestimate how others may share their beliefs. They often mistake silence for consent in talking with investors. Investors often nod in acknowledgment of what the founder says but this doesn’t mean they agree. To overcome the false consensus effect, do the following: Maintain awareness of the false consensus effect and realize not everyone has the same opinion as you. Consider various viewpoints and how others may approach it from a different angle. Consider how much your opinions come from your internal beliefs and personality rather than external factors such as the market and your environment. View your opinions as if you were an independent observer to see how the deal looks based solely on external factors. Break down your decision process into steps and verify the assumptions behind each one. From this, you can determine how others may view your deal. Finally, this process can also apply to other persons considering your product.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 19 May 2023
On this episode of Investor Connect, Hall welcomes Adam Besvinick, Founder and Managing Partner at Looking Glass Capital. Located in Purchase, NY, USA, Looking Glass Capital is a pre-seed and seed fund that seeks to invest in and support mission-driven founders during the earliest days of company building. They are most inspired by entrepreneurs solving today's biggest challenges across health, climate, and empowerment (education; tools and platforms for SMBs; and products that enable access, identity, or self-expression). Adam is the Founder of Looking Glass Capital, a pre-seed fund investing as a "first yes" or lead investor in non-consensus opportunities with independent conviction. Prior to starting Looking Glass, Adam invested for five years in pre-seed through Series C companies, including Transfix, BigID, One Concern, NomNom, and Plant Prefab, at Deep Fork Capital and Anchorage Capital Group. Adam graduated from Harvard Business School, during which he worked part-time for Lowercase Capital, Gumroad, and a couple of other early-stage companies. He also co-led By/Association, an angel investor group, which made three investments. Prior to entering business school, he was a telecom investment banker at Jefferies and graduated cum laude from Duke University in 2009. Adam shares his thoughts about investing as an angel investor, the economic reset in the venture capital world, and what it means to be in the age of resilience. Visit Looking Glass Capital at lookingglass.vc/, www.linkedin.com/company/looking-glass-capital/, and on twitter.com/lookingglasscap. Reach out to Adam at adam@lookingglass.vc , http://linkedin.com/in/besvinick, and on http://twitter.com/besvinick _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 18 May 2023
Naive Realism Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Naive realism is defined by Wikipedia as the belief that we see reality as it really is – objectively and without bias; that the facts are plain for all to see; that rational person will agree with us; and that those who don't are either uninformed, lazy, irrational, or biased. Founders believe their view of the world best matches reality. Some go further and believe that all other views are erroneous. To overcome naive realism, consider the following: Maintain awareness of naive realism and remember that one’s perceptions determine one’s beliefs. Remember that not everyone perceives the world in the same way and so will not view it in the same way. Look for alternative views and contrast and compare them to your own. Look for the connection between their perceptions and their beliefs. Use this information to inform your own approach to the problem your startup solves. There’s more than one way to run a startup or solve a problem.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 17 May 2023
Illusory Superiority Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Illusory superiority is defined by Wikipedia as overestimating one's desirable qualities and underestimating undesirable qualities, relative to other people. Every founder considers themselves superior and should be funded accordingly. This is a flawed view of the startup world in which investors can see many startups while the founder sees far fewer. In fundraising, there’s competition for startup investment. To overcome illusory superiority, consider the following: Maintain awareness of illusory superiority throughout the fundraising process. Remember how many other startups are raising capital and the challenge that imposes. Look at startups outside your own circle to see how they compare. Always be learning about startups and the startup world. Get an independent view of your startup to see how it compares to other startups. Look for critical views of your startup to see how you can improve. Through constant improvement, you can overcome illusory superiority.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 16 May 2023
Illusion of External Agency Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Illusion of external agency is defined by Wikipedia as when people view self-generated preferences as instead being caused by insightful, effective, and benevolent agents. Founders often believe someone else can make their fundraiser successful. The responsibility of fundraising for startups lies solely on the founder's shoulders. While others may help through introductions and mentorship, the duty to follow through lies with the founder. To overcome the illusion of external agency, consider the following: The strategy and content of the fundraiser come from the founder no matter who is driving the campaign. Part of the fundraising process is to build a relationship with the investor. The founder must be integral to the fundraising campaign to do so. The founder is responsible for the outcome of the fundraising as investors look to the fundraising campaign as a proxy for the founder's skills including communication, execution, and follow-up. The fundraising campaign is an opportunity to demonstrate those skills. While others can help, it’s the founders themselves who must own the campaign.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Mon, 15 May 2023
Group Attribution Error Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Group attribution error is defined by Wikipedia as the biased belief that the characteristics of an individual group member are reflective of the group as a whole. Startups often project the characteristics of one investor on the entire group when the group is much more diverse. Angel groups for example are composed of people with a variety of experiences, expertise, and perspectives. One investor doesn’t define the entire group. To overcome group attribution error, consider the following: Maintain awareness of the group attribution error when working with investor groups. Apply emotional intelligence by practicing self-awareness, empathy, and self-regulation. Remember a time in which you were part of a group and were influenced by the situation. Explain to yourself the rationale behind your judgment. This will help clarify your reasoning and highlight biases in your judgment. Consider how the investor may view your deal from their perspective instead of your perspective.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 12 May 2023
Zero-Risk Bias Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Zero-risk bias is defined by Wikipedia as the preference for reducing a small risk to zero over a greater reduction in a larger risk. Customers will choose a product that eliminates risk over another product that has a greater price reduction. For example, you could offer two products that are similar. The first has a bigger discount but doesn’t provide a money-back guarantee. The second is higher priced but provides a money-back guarantee. Customers under the zero risk bias will opt for the higher priced product with a guarantee as they feel they are eliminating risk. The fallacy in the zero risk bias is that risk can never be reduced to zero. In this example, the company could go out of business and not provide a guarantee. To avoid the zero risk bias, analyze your decisions more carefully and calculate the cost difference between the two options. The price difference is the cost of the guarantee. Ask yourself is the guarantee worth that cost.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Fri, 12 May 2023
On this episode of Investor Connect, Hall welcomes Jonathan Stidd, President at DealMaker Reach. Located in Toronto, ON, Canada, DealMaker is on a mission to create the most sophisticated capital markets tools on the planet, empowering capital to flow faster. It offers a suite of primary issuance, shareholder management, and capital raising solutions that includes equity crowdfunding, investor ranking algorithms, and data/analytical tools to support all capital raise types and all securities. Its innovative technology was designed to enable organizations to own and control exempt market raises to get the money they need, faster. DealMaker works for their issuers: putting brands and founders back in control to run streamlined, successful capital raises. Its mission is to turn the process of raising capital into simple eCommerce. As Canada’s 3rd Fastest Growing Company, DealMaker has taken major market share in the US and landed clients like the NFL’s Green Bay Packers. To date, DealMaker has processed over $1.9B in transactions and over 1,000,000 investments - more than any counterparts or competitor in North America. With an unmatched entrepreneurial spirit, Jonathan Stidd has spent the last 10 years helping founders live their dreams. Beginning his career in management consulting, Jon soon found his passions took him down the path of entrepreneurship to launch his own connected device company and mentor other founders through programs like General Assembly. Throughout his journey, Jon was drawn to digital marketing as it was the nexus of his interests across growth strategy, startups, and innovation. In 2017, Jonathan co-founded Ridge Growth Agency which quickly became the leading digital marketing agency for equity crowdfunding - helping their clients raise a collective $500M+. Jon continues to help founders raise capital as he serves as President, of DealMaker Reach after Ridge Growth was acquired by leading capital raise platform DealMaker. Jonathan discusses how to use equity funding, the different types of equity crowdfunding, the different digital trends in the market, and much more. Visit DealMaker at www.dealmaker.tech/, www.linkedin.com/company/dealmakertech/, and on twitter.com/Dealmakertech. Reach out to Jonathan at jonathan.stidd@dealmaker.tech, www.linkedin.com/in/jon-stidd-8b225518/, and on twitter.com/jjstidd. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Thu, 11 May 2023
Survivorship Bias Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Survivorship bias is defined by Wikipedia as concentrating on the people or things that "survived" some process and inadvertently overlooking those that didn't because of their lack of visibility. Incubators often measure their results based on startups that get funded rather than all the ones who go through the program. Taking out the startups that failed early can skew the results by only counting the ones that are up and running. To overcome survivorship bias, consider the following: Maintain awareness of the survivorship bias when evaluating a metric. Consider what has been left out of the calculation. In our incubator example consider how many companies applied, were accepted, and started the program but were never counted in the metric because they didn’t build a running company. Find alternative data sources. In this example, look for companies that went through the program and talk to both those who succeeded and those that did not. Go beyond the initial statistic as it often measures only a part of the story.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Wed, 10 May 2023
Subjective Validation Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Subjective validation is defined by Wikipedia as the perception that something is true if a subject's belief demands it to be true. In developing products founders look for information that matches their own view of the problem and solution. Founders build their products for a market based on their own view of the customer's needs. Founders will find customer research that matches their experience more valuable than information that doesn’t fit their views. To overcome the subjective validation bias, consider the following: Use a checklist so all collected information gets equal consideration. Build teams of observers instead of single ones so they can check their observations with each other. Move from qualitative to quantitative in the research. It’s important to look holistically at the problem in order to devise a workable solution.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
Tue, 9 May 2023
Pseudo-certainty Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The pseudocertainty effect is defined by Wikipedia as the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes. As the startup finds success, the founder becomes more risk-averse because something at stake can be lost. For startups that are flailing, risk-taking becomes the norm with all projects. To overcome the pseudo-certainty effect, consider the following: Maintain awareness of the pseudo-certainty effect and how it can shift your risk-taking based on the current status of the startup. Probability assessment is not a natural skill most people have. It’s best to analyze the outcome of a proposed project by looking at other startups and their track record with projects such as generating leads and closing sales. Assess the probability of the outcome based on actual evidence. Take calculated risks that don’t put your startup in danger of going out of business. Avoid the ‘go for broke’ plan unless you have solid evidence that it will work. If things are going well, then know you can take more risks.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Feedback please contact info@tencapital.group Please follow, share, and leave a review. Music courtesy of Bensound. |
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