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

The Returns on a Fund are based on the power law which means that the Pareto Principle applies: The bulk of returns come from just a few of the companies.

Out of ten investments, one will be a home run, two to three will be small returns, and the rest will be losses. 

Some use the J-curve to show the returns. The returns in the early days are negative because the losses typically happen first. The winners come later. The shape of the returns curve looks like the letter J when plotted on a graph.

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

Let’s go startup something today.
-----
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In this episode, Hall welcomes Peter Adams, Executive Director of Rockies Venture Club.

Rockies Venture Club is “...an angel investing group dedicated to accelerating economic development by educating and connecting investors and entrepreneurs.” Their culture is based on the following three “pillars”: events, education and execution.

Excited by impact investing, Peter explains Rockies Venture Club’s investment thesis and gives examples of startups within the Club.

Peter also gives advice to both investors and entrepreneurs, and speaks at length about the challenges startups face.

Visit Rockies Venture Club at www.rockiesimpactfund.com  

Peter can be contacted via LinkedIn at www.linkedin.com/in/peteradams/ and via email at peter@rockiesventureclub.org 

In this episode, Hall welcomes Charles Sidman, Managing Partner and Member of ECS Capital Partners.

ECS is a fund that invests in a wide range of enterprises from early-stage Angel start-ups, to later Venture-stage or even public growth companies, focusing completely on investor returns (Internal Rate of Return).

Charles’ career path is vast and includes building computers to becoming a professor and performing scientific research. He is a financially-oriented investor with two filter systems and explains his approach to investing and the four criteria that must be in place in order for him to consider investing.

He is very excited about discovery and application, and investing, participating, supporting and working with companies that are going to change the world and make it a better place.  

Although Charles is an avid traveller and has seen startups all over the world, he sees many similarities amongst them.

He gives advice for both investors and entrepreneurs and speaks about the big changes he sees in the startup industry.


Visit ECS Capital Partners at www.ecs-angels.com 

Charles can be contacted via LinkedIn at www.linkedin.com/in/charles-sidman-0b778620/  and via email at csidman@ecs-partners.com 

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

In running a fund it’s important to analyze market segments.

First, evaluate the leading companies in the market.

Are there any leaders that stand out, or are all the companies competing head-to-head with the same approach?

Highlight the supply chain to show who has control of the market -- is it the producer or the consumer that drives the price?

Discuss the introduction of new technology and its impact on the current market equilibrium.  Will it shift control from the producer to the consumer, or vice versa?

Review the number of companies playing in the segment and discuss the resulting fragmentation. 

Highlight the total available market for the companies in the segment. 

Identify companies within the market that stand out for competitive advantages such as network effects, virality, recurring revenue models, etc.

Conclude with a proposal to pursue investment in a company in the market segment.

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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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

Investors in the startup space have a certain expectation for returns. 

Startups raising funding should keep in mind these expectations and only approach them if you have a deal that is in the game for it. 

Venture investors including angels, venture capitalists, and limited partners, typically look for a 20-30 percent internal rate of return (IRR) over a 5-year time horizon. 

This can also be expressed as a“two and a half to four times” the original money invested.

If it takes longer than five years, then investors will look for a 5-10X ROI to maintain a 20-30 percent IRR.

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

Let’s go startup something today.
-----
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Fund managers must present their investment ideas to the other general partners. 

Here’s how to analyze a potential company for investment:

Identify a recent event for the target company, such as entering a new market. 

Discuss how the company can disrupt the newly-entered market with their expertise and business model. 

Talk about the positives you see in the company’s financials and market position.

Express caution based on any concerns about the business including product/market fit, management team, or cost structures.

Discuss macroeconomic issues both positive and negative. 

Conclude with a recommendation to pursue an investment based on the positives outweighing the negatives. 

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

Let’s go startup something today.
-----
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The fund manager provides a quarterly report to the Limited Partners. 

The reports typically contain the following sections:

1. Fund Manager Commentary -- the fund manager provides an overview of the current news and trends related to the fund. 
2. Performance -- this includes the financial performance metrics such as total committed capital, capital called to date, total LP contributions and summary information about the portfolio.
3. Total Value to Paid-in Capital -- the total market value of all the companies in the portfolio plus total LP distributions, divided by the total amount of money paid into the fund.
4. Internal Rate of Return -- a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.
5. Distributions to Paid-in Capital --  a ratio of the total market value remaining in a fund compared to total paid-in capital.
6. Portfolio Company Updates -- name and description of the company, percent owned, date of initial investment, exit date, total capital invested, current cost, realized proceeds and carrying value.
7. Financial Statements such as Income Statement, Balance Sheet, Cash Flow Statement.

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

Let’s go startup something today.
-----
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

There are 3 key legal documents for your fund. They are

1. Subscription Agreement -- describes how the limited partners purchase interest in a fund, or rather, subscribe to it. It contains representations and warranties.
2. Private Placement Memorandum -- provides a high-level overview of what an investor needs to know about your fund. This includes the investment thesis, the risks, and other key terms.
3. Limited Partner Agreement -- contains information about the mechanics of your fund and how it operates including distributions, capital calls and management fees.

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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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

There are three key metrics for tracking the performance of a Fund.

The first is Net Internal Rate of Return (called Net IRR) -- this measures the performance of fund distributions and the change in value of the invested companies over time, after management fees. 

The second is Total Value to Paid in Capital (called TVPI) --this measures the total value of a fund’s holdings plus distributions, as compared to total paid in capital. This takes into account investments that have increased in value but have not been paid out. 

Finally, there is Distributions to Paid in Capital (called DPI) -- this measures total distributions paid to investors compared to total paid in capital. This compares the investors paid in capital to their distributions as measured on a cash-on-cash basis. 

DPI is the metric investors care about the most.


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

Let’s go startup something today.
-----
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.


In raising a fund you’ll need an executive summary which should include the following:

Fund Objectives, (Legal) Structure, Fund Specifics, Investment Strategy, Investment Criteria, Investment Process Overview, Management Team and Disclaimers.

Fund Objective -- purpose of the fund and how it will be deployed.

Legal Structure -- is it a fund, a syndicate, a pledge fund or some other structure?

Fund Specifics -- most funds are based on a ten-year window.  

Distribution Strategy -- most funds provide a recycle provision that let’s GPs reinvest profits back into the fund.  Other funds require a hurdle rate before GPs can share in the profits. This means the investors get their principal investment back before the GP takes any carry.

Limited Partner Units -- private funds are limited to a maximum of ninety-nine accredited investors in the fund.

Fee Structure -- most funds use the two percent management fee and a twenty percent carry.

Compensation Structure -- this determines when and how the GPs receive their compensation.

Initial Deposit -- funds vary in how much of the funds are required from investors up front. 

Investment Strategy -- outlines the investment thesis.

Management Team -- the resumes of the general partners. 

Finally, there are disclaimers to include. 


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

Let’s go startup something today.
-------
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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

For those raising a fund, you must develop an investment thesis for your fund or investing strategy.

An investment thesis is a hypothesis that describes how a particular market is suitable for producing a positive return.

Most funds are formed around a specific vertical in which the general partners have expertise and access to dealflow. 

More than one vertical will require the partners to have expertise across several sectors and the associated dealflow access. 

You must be able to articulate your thesis and demonstrate your expertise to investors.

Use numbers to describe market sizes and growth rates.  

Identify trends and their impact on markets and businesses.

Show how your investment thesis takes advantage of these trends and how you envision the future will result in a positive return for the investors.

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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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

One of the key selling points for a startup is their potential market size.

There are several ways to find it for your startup.

You could buy a market research report. These typically run anywhere from $5K to $20K. This is an expensive way to do it and there are other ways to find the market size.

Oftentimes you can find the summary of the market research report on the web which usually gives the market size at a high level.

You can also contact the trade association related to your industry.  

These associations are most often located in Washington D.C., as they provide government advocacy in addition to industry support.

The website of the association typically provides stats on the industry including market size and sector breakdowns. 

These sources are often more reliable than market research reports.


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

Let’s go startup something today.
------
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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

In due diligence, what isn’t being said or shared is as important as what is.

When a startup pitches their idea, you should be skeptical of founders that don’t mention potential risks or discuss their experience in the industry, or their traction.

Here are other key items the investor should look for:

Focus on what needs to be done and what risks exist in the deal.

Understand if the startup is offering a pain killer or a vitamin.

Verify the market size and growth rates actually reflect the market the team is pursuing.

Check the financial projections not so much for predictability of numbers, but rather for the startups’ understanding of their business.

Diligence on the founding team including industry experience, commitment to the startup and no criminal records.


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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

In due diligence you may encounter red flags indicating something is wrong.

Here are some that I’ve found:

The founders are not investing any of their own money into the business.  

The cap table is crowded with many small investors. That means the earlier funding was a challenge.

The team is incomplete. Either the solo founder wears too many hats or everyone is a tech developer, which means no one is out selling it.

Lack of awareness of the industry, especially the regulatory side.

There are no KPIs or operational metrics to review. 

Plans are generic and lack specific customer names or revenue amounts.

Loads of debt and previous investors have no further interest in funding or supporting the business.

The business appears to be setup to be the CEO’s lifestyle business. 

Hockey-stick projections with no apparent supporting evidence.

There’s no board of advisors or directors. The team you see is what you will get.

The financials use year 1, year 2 naming, rather than actual years.

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

Let’s go startup something today.
----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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


The prospective investor wants to see traction in your fundraise just as they want to see traction in your core business. 

In raising funding, investors will first express interest and then make a commitment before actually investing.

In a fundraise, you want to capture all three levels in your pitch.

Add up how many investors have expressed interest - which is often called soft-circled interest - and the amount, and present that number as investor interest.

Take all the committed amounts of investment and add that number to your presentation as well. 

Finally, take the amount of funding that has come into your bank account and show that number.

Over the course of the campaign those numbers will change.

It’s  important to show the prospective investor the interest from other investors throughout the campaign.


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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In this episode, Hall welcomes Harlan Mandel, CEO of Media Development Investment Fund (MDIF). Harlan joined the company in 1998 and was appointed CEO in 2011. MDIF is an impact-investment fund which “provides affordable debt and equity financing to independent news and information businesses in countries where access to free and independent media is under threat.”

MDIF funds deals across the world, including the US. Harlan speaks about one portfolio company in India whose business model, he suggests, is a good thing to pursue. He also speaks about a company in Indonesia founded by three of the leading investigative journalists in business news in the country.

Harlan goes on to talk about expertise in digital media and digital operations, and developments in the news field. He gives examples of challenges startups face in the media world and the skill sets needed to found a company.

On the investor side, Harlan suggests that the startup should be focused on bringing in revenue from day one and he goes into detail about how to accomplish this.


Visit Media Development Investment Fund (MDIF) at www.mdif.org 

Harlan can be contacted via LinkedIn at https://www.linkedin.com/in/harlan-mandel-8817673/ on www.Twitter.com @HarlanMandel and via email at harlan.mandel@mdif.org

In this episode, Hall is joined by Vikram Lakhwara, Co-founder and Managing Director of Green Cow Venture Capital (GCVC) which is a sector-agnostic, early-stage, micro venture capital fund “backing dynamic founding teams solving global market problems around inefficiency and scarcity using greenfield technologies.” They invest at the Seed+ and Series A stages and their average seed deal check size is $450K.

Vik has been in the venture capital world for many years. Prior to co-founding GCVC, he worked at Wilson Sonsini, a globally-renowned law firm in the technology and life sciences sector where he was the Manager of Start-Ups & Venture Capital.

Vikram speaks about the challenges faced when co-founding GCVC and although difficult, what made it exciting and worthwhile. 


Visit Green Cow Venture Capital at www.greencow.vc/ 

Vikram can be contacted via LinkedIn at www.linkedin.com/in/viklakhwara/ on www.Twitter.com  @vlakhwara and via email at vik@greencow.vc 

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


The Coronavirus pandemic impacts what venture capital funds.

We’ll see changes in the following ways:

Goods and services deemed ‘essential’ will receive funding such as cannabis, CBD, and hemp.  Alcohol will see increased funding as well. 

In the wellness category, smoking cessation, nutritional supplements, and other products that strengthen the immune system will be attractive to investors.

In fintech, digital payments and for Insurtech, online vehicle inspections attract investors as it eliminates physical cash and moves the transaction online. 

In biotech, vaccines and virus detection will see increased funding. 

Remote-work software and online-engagement tools for gyms, educational institutions, and others will see strong interest. 

In healthcare, equipment in critical demand will receive funding such as medical supplies, medical equipment, diagnostics and tele-health systems.

Supply chain services and logistics such as automated ordering, AI-based systems, and delivery to the home will receive funding. Supply chain visibility startups will see strong interest as well. 

In general, online content and engagement such as telehealth, tele-physical training, and tele education will receive funding. 

Finally, automation in warehouses, data centers, and robotics will see investor interest.

Robotics and AI were once perceived as destroying jobs but will increasingly be viewed as a necessity.


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The Coronavirus pandemic impacts many parts of the economy including manufacturing and automation.

We’ll see changes in the following ways:

Manufacturing will shift back to the US to secure the supply chain for critical needs.

Companies will accelerate plans to automate functions to replace workers who may be in quarantine.

New technologies such as 3D printing, robotics and automation systems will see increased usage to provide basic infrastructure.

Flexible systems will be set up to build necessary products based on the current need.

Robotics will be used throughout the manufacturing process and not just final assembly.

Automation and robotics will be set up to provide healthcare supplies such as ventilators, personal protective equipment, and vaccines.

There will be an explosion in startups to supply this new manufacturing demand.


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The Coronavirus pandemic impacts many parts of the economy including IT and cybersecurity.

We’ll see changes in the following ways:

With the shift to distributed employees and remote work, there will be more people logging in from remote locations. This opens the door for more cybersecurity attacks.

Remote users with their own devices will take more time to monitor and repair when attacked.

Remote devices will need login and access to databases and other resources. These devices with access to critical data will need to be secured. 

It’s important to monitor data wherever it is stored, even if it’s at a remote location. 

Data can spread, making it harder to define and protect that data. 

Collaboration tools open up risks for cyber attack. Ease-of-use software means easy to attack.  Encryption tools need to be applied to collaboration and messaging tools. 

Security breach plans need to account for the new remote workforce. 

Remote workers have been in use for some time, but with the entire company on remote work format brings a new challenge to cybersecurity.


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

Let’s go startup something today.
-----
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The Coronavirus pandemic impacts many parts of the economy including logistics and supply chain.

We’ll see changes in the following ways:

The need for flexible manufacturing come to the forefront in the Coronavirus pandemic in the form of ventilators, COVID-19 tests, and medical supplies.

Traditional manufacturing will be replaced by faster, more flexible systems with an emphasis on technology, rather than low-cost labor. 

Technologies such as 3D printing, robotics, automation, and advanced manufacturing will take precedence in the event labor goes under lock down.

Amazon is an example of an advanced manufacturer relying on ecommerce, cloud-based computing and sophisticated supply chain logistics. 

The post-Coronavirus world will want the ability to run standalone. Robotics, AI, and automation will be seen as a positive force for achieving that.

Logistics are shifting to serve the customer all the way to their home rather than through intermediate distribution points such as grocery stores and C-stores.  

As with most trends in the Coronavirus economy, these were already underway.  It now accelerates. 


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
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Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The Coronavirus pandemic impacts many parts of the economy including education.

We’ll see changes in the following ways:

Education has been moving online for the last twenty years. With online courseware, virtual classroom tools and more, the coronavirus will accelerate the move online.

Virtualized education will let instructors customize to individual needs.

The flipped classroom will become the new norm as videos, digital courseware and multimedia provide the lecture component.

There will be an increased usage of crowdsourced education. Virtualized education opens the door to bring additional teachers into the classroom. Imagine having an engineer provide a session on thermal dynamics and its practical use on the job.

A key component of the current education system is the ‘daycare’ component that allows parents to work a day job without having to pay for it.

Startups should examine these trends and consider extending your product to take advantage of them.


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
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In this episode, Hall is joined by Thomas Cali of Polaris Advisory.

Thomas, a long-time investor in some large and well-known companies, has years of experience in the technology, telecom and healthcare spaces. He stresses the importance of teamwork to run a successful company and gives advice on how executive burnout can be avoided and why it’s important to delegate. 

Polaris Advisory represents about four family offices who scale companies from private to public. 

Thomas can be contacted via email at thomascali531@gmail.com

In this episode, Hall is joined by Christopher Hugman, CEO of System Surveyor, established in 2017 in Austin, Texas.

System Surveyor is an award-winning, cloud-based platform Software as a Service (SaaS) which helps system-integration contractors and technology professionals in the electronic physical security industry, as well as other markets. 

He gives his three top pieces of advice for what he believes is the key to making a good investment with founder-market fit being even more important than product-market fit. Chris gives examples of use cases and how System Surveyor is helping companies in the sector.

Delivering value to clients is the main focus of their business.

Visit System Surveyor at www.systemsurveyor.com

Chris can be contacted via LinkedIn at www.linkedin.com/in/christopher-hugman-p-e-3963aa1/ and via email at chugman@systemsurveyor.com

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


The Coronavirus pandemic impacts many parts of the economy including work.

We’ll see changes in the following ways:

Increased usage of remote-work software tools. Video conferencing, shared drives, Slack, and other tools make virtual work efficient and will grow in adoption.

Remote work will become the norm rather than the exception. No one will miss the commute to work. 

Increasing use of virtual workers. With work moving online and companies moving to distributed models, the pool of available workers will expand.

Employers will look for new tools to manage online employee productivity.

With employees working remotely, new opportunities will arise for supporting workers with the delivery of physical goods.

Workers will need to retrofit their home office to accommodate the new workspace with the associated teleconferencing calls.

Corporate offices will be repurposed for new uses. For example, office buildings could be reconfigured to host company employees once a quarter for all hands-on employee meetings and shared among several companies.

As a startup, you may want to take note of these trends and plan your business strategy accordingly.


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

Let’s go startup something today.
-----
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
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For Feedback please contact info@tencapital.group

In this episode, Hall welcomes back Eric Smith, Founder and CEO of AppBrilliance. Established in 2015 and located in Austin, Texas, AppBrilliance has created a platform which “unlocks the future of money by removing the barriers between technology companies and the financial institutions.”

Eric speaks about the “whirlwind” of the past few months with the launching of a new product. He provides insight into credit and debit card payments and the fraud associated with them, which is very prevalent in the banking industry. He gives entrepreneurs advice on how to raise funding and goes into detail about what the future holds for AppBrilliance.


Visit AppBrilliance at www.appbrilliance.com

Eric can be contacted via LinkedIn at www.linkedin.com/in/cericsmith/ and via email at eric@appbrilliance.com

In this episode, Hall welcomes Matt Gallant, Founder and CEO of tribeOS which is “a real-time, full-featured, and decentralized advertising marketplace [which] can be constructed with the prudent use of blockchain technology combined with an independent peer-to-peer network.”

Matt has always been passionate about advertising and speaks at length about detecting and fighting the “invisible crime”, ad fraud. The team at tribeOS firmly believe that they know what most of the issues are and they are determined to solve them. Data protection and privacy, display advertising and their conversion engine are just a few of the things they are working on and Matt goes into detail about what this all entails.

Visit tribeOS at https://www.tribeos.io/

Matt can be contacted via LinkedIn at www.linkedin.com/in/matt-gallant-61535b8/
and via email at matt@tribeos.io

In this episode, Hall is joined by Xavier Segura, Managing Partner of Tessera Venture Partners, headquartered in New York. Tessera Venture Partners is an early-stage venture fund investing in transformative companies with exceptional founders “having at least one major exit in an area related to their current business”.

Xavier is not new to the world of investing in startups as prior to Tessera, he had operated, exited and grown many technology companies. He gives his advice to both investors and entrepreneurs and speaks about the various regulatory challenges in the space. Xavier also shares details on two of the five companies which are currently in Tessera’s portfolio. One is a cloud-based platform that enables merchants to sell everywhere using mobile devices as well as digital insurance claim processing and payment, and the other is a financial technology company leveraging blockchain, AI and analytics to deliver home equity lending, reverse mortgages  and other financial products.

Xavier is very excited about blockchain and the gig economy and welcomes any questions or comments.

Visit Tessera Venture Partners at  www.tesseravp.com 
Xavier can be contacted via LinkedIn at www.linkedin.com/in/xsegura/
and via email at xavier@tesseravp.com

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


I’m often asked what venture capital looks for. 

VCs look for emerging tech markets with strong growth projections.

These sectors include blockchain, AI, Data Analytics, and other strong growth areas.

They do this partly because there’s usually strong deal flow and it’s easy to explain to limited partners.

VCs also look for platform-based businesses, rather than solo products.

They look for recurring revenue

Virality factors

Network effect components

Very large markets 

Strong teams and 

A scalable business model

Also, traction in your business and exits of other companies in the sector drive interest as well.


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

Let’s go start up something today.

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

-----------
Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


The Coronavirus pandemic impacts many parts of the economy including healthcare.

For healthcare startups, we’ll see changes in the following ways:

Increased use of telemedicine.  The pandemic highlights the challenge of centralizing all healthcare functions in one place.   There are many apps on the market today and after several years of mobile phone usage, the population is familiar with conversing with others through their mobile device.

AI will find increased application.  It will be used to sort through the massive amounts of data for controlling the pandemic, as well as running clinical trials.

We’ll see greater access to medical records for research.  It will be interesting to see how privacy issues are regarded during pandemic outbreaks.

Personal-monitoring devices will continue to take over basic monitoring functions by providing alerts when things go outside the norm.

These tools are well in place and growing in use. The COVID-19 pandemic will accelerate their adoption and use.

As a startup, you may want to take note of these trends and plan your business strategy accordingly.


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

Let’s go startup something today.

-----

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

Today’s question is from Markeyla

Markeyla asked: 
I would love some direction about creating relationships in the VC world. Although I have been accepted into an accelerator, I don't have many connections in the VC world.

Response:
Markeyla,

It’s a good idea to build a relationship with investors before you need to raise funding.  A strong relationship with the investor is the foundation of a successful fundraise campaign.  That’s why family and friends funding is so easy and raising from everyone else is so much harder.

Make a list of investors you want to know. To get an introduction, find three people who know you and the investor and have them send an email introducing you and talking about the great things you are doing in your startup.

Once you have contact with the investor, bring new information to the discussion whether it be in person, or over the phone, or in an email.

Showcase interesting market research you’ve done.  Provide information on sectors the investor works in. 

Bring to their attention up and coming startups that should be on their radar and offer to make an introduction.

Finally, if your product/service can help the investor’s portfolio companies, then offer to provide that service at no cost. 

In other words, provide information and support to the investor as your starting point.

Most companies start by asking for information and support from the investor. 

If you can help them, you will truly stand out from the crowd.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


Many people want to work for a VC especially those straight out of college.

Most are not aware of the challenging dynamics that come with the VC life.  Here are a few:

Raising funding -- just like startups, the VC has to raise funds too.  LPs tend to be rear-view-mirror oriented and not focused on the cutting edge of new technologies and markets.

Working with partners -- you rarely make the decisions alone, but rather with the other partners.  Ego and other agendas are often at play.

Getting deals done -- you have to convince others you have a winner on deck and sell it all the way through the process.

Managing the dealflow -- untold numbers of startups want to talk with you and only a small fraction are even meeting your funds criteria.

Dealing with Co-investors -- it’s rare for a fund to take the entire round. There’s usually other investors in the deal.  Who gets how much of the deal and what board seats, are often an issue.

The rollercoaster ride that is the startup life -- things often don’t go well at the portfolio companies and this weighs heavily on the VCs who invested in them.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


In pitching your business plan, consider using the story format.

Start with the problem you faced.

Show how you couldn’t find a solution so you created your own.

And now others are coming to you for that solution.

Along the way you can talk about how you built the team and chose a go-to-market strategy.

Highlight the challenges you had to overcome.

Show the current status of the business and the upcoming plans.

Each element of the story should highlight one aspect of the business plan.

The story form keeps the audience engaged throughout the pitch because it flows smoothly.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


Today, we’ll talk about how to achieve an exit in a startup investment.

It’s easy to get into a startup investment, but difficult to get out -- especially with a positive return.

Most startup exits come when they sell the business to another company or go public on the stock exchange.

It takes seven to ten years to achieve an exit in most cases.

Most investors let the startup define the exit.  If they do, that’s great.

If they don’t, then you define an exit for your investment.  

I recommend using a convertible note that has a 3X in 3 year redemption right at investor sole discretion.  This provides you the option of exiting at the 3-year mark, or staying in for the long haul.

By year 3 it becomes clear where the startup is headed.  They are either on the venture path to larger returns, or they have left the venture path and moved into payroll mode.  

The problem with leaving the venture path is that most terms sheets give the investor an equity stake.  If the company leaves the venture path and turns into a lifestyle business, then the equity is going to be worth, at most, a small return typically around the 10-year mark. 

Define the exit you want and make an offer.  Not all startups will take it, but many will.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall is joined by John Osborne, Executive Administrator of Charleston Angel Partners.

Charleston Angel Partners is headquartered in North Carolina, and was started in 2001 as “the area’s longest-tenured and most established angel investment group.”  The group of angel investors believes that “meaningful economic impact happens when great people support great ideas.”

John is also the Managing Partner at Good Growth Capital, an early-stage venture capital firm known for its “exceptional expertise in finding, cultivating and assessing complex science and technology start-ups, Director and Co-Founder of The Harbor Entrepreneur Center, and the Founder of Charleston Angel Conference.

He spent over 10 years in the banking industry before he began investing in early-stage companies. He is excited about the energy in the startup scene in Charleston and elsewhere in the Southeast. John shares with Hall his experience in the deep-tech sector and gives advice to those both investing in startups and running their own.

Visit Charleston Angel Partners at  www.chapsc.com 

Visit Good Growth Capital at www.goodgrowthvc.com

John can be contacted via LinkedIn at www.linkedin.com/in/john-osborne-57b42035/ 
and via email at john@fundingcharleston.com 

In this episode, Hall welcomes Pierre Rogers of Yahyn powered by Puro Trader, the platform that brings together retailers, vineyards, and sinners with a focus on Amazon-like convenience to purchasing as well as providing the first true price and inventory discovery mechanism for these regulated industries. It is the first of its kind online aggregator for wine with a user base that is currently growing 38% month over month.

Unbeknownst to many, in the USA, most wine stores and vineyards are predominantly owned and run by immigrants. 

Pierre goes into detail about the huge addressable market that Yahyn now offers to hundreds of thousands of consumers. Currently there are 1,700 sellers and Pierre sees that number increasing by at least 5X if his predictions are correct. 


Visit Yahyn at Yahyn.com 

Visit Puro Trader on Twitter at Twitter.com/PuroTrader

Pierre can be contacted via LinkedIn at www.linkedin.com/in/pierre-rogers-265120148/
and via email at pierre@yahyn.com

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


The Coronavirus pandemic impacts many parts of the economy including consumer product goods.

For the consumer-product-goods space, we’ll see changes in the following ways:

Many CPG companies will see greater demand for their product as the shutdown of restaurants shifts consumers to grocery stores.

Those who provide disinfectants, protective clothing and other tools to fight the virus, are under heavy demand.

Shelf-stable products will be more important than perishable goods.

Due to outages of a customer’s preferred brands, customers will try new products because they are available, and in some cases, the only item left on the shelf to be purchased.

Wellness products including nutritional supplements, will see strong growth as consumers weather the pandemic.

Supply chains in general, are under pressure as the population moves from restaurants to the grocery store as their primary source of food.

Retailers are delaying category reviews and store-shelf resets as they have their hands full just keeping current products on the shelf.  This will delay new product introductions.

In general, consumers are moving to home delivery and to direct-to-consumer products, where possible. 

CPG companies should consider shifting into the direct-to-consumer and eCommerce distribution channels.


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

Let’s go startup something today.

-----

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


The Coronavirus economy is accelerating changes already underway.

Content and engagement is moving online.

This impacts healthcare and education in particular, as well as general business.

As a startup, you need to recognize this acceleration and move your business to be a part of it.

Look for capturing your content and making it available online.

Video, blogs, and other content can be digitized.

You may need to take on consulting work in the short-term to help pay for this process.

Customer engagement also needs to move online. If not all of your business, then some of it.

While face-to-face interaction is important and in some business interactions critical, you’ll need to figure out how to use webinars, video conferencing, and other tools to close the gap.

As you shift your business online, you’ll need to conserve cash and reduce staff.


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

Let’s go startup something today.

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


Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes Noramay Cadena, Co-Founder and Managing Partner of MiLA Capital. Noramay holds three engineering and business degrees from MIT and previously worked in the aerospace field.

MiLA Capital is an early-stage venture capital firm that invests globally by leveraging hard and soft resources to build capital-efficient startups. The company funds at pre-seed, seed and post-seed stages, and their check sizes range from $100K-$1M. 

Noramay speaks in depth about the five values of the company and her excitement at the intersection of technology and manufacturing. She is very passionate about the new wave of venture capitalists and is working toward bringing this to fruition in the next five years. 


Visit MiLA Capital at www.mila.vc  

Noramay can be contacted via LinkedIn at www.linkedin.com/in/noramay/ and on Twitter at @noramayc

She can also be reached via email at noramay@makeinla.com  

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


The Coronavirus has sent the stock market into a wild ride of 1000-point swings every day.

In talking with investors, I find the following:

Early-stage investors continue to move forward with their investment plans.  Later-stage investors are putting their investments on hold to see how the economy sorts out.

Funds which have already raised their capital continue to do business as usual. 

Many investors are shifting their attention to their portfolio companies as a first step to ensure they have access to capital. 

Other investors are moving their investments into the higher-quality deals with stronger traction.

Valuations are starting to come down with some investors moving aggressively into the market as they see it as a strong buying opportunity.

Lenders are in the market as always, with their same criteria.

Investors look for startups that are finding a new growth story in the Coronavirus economy and will prioritize those investments.

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

Let’s go startup something today.

-----

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


While the Coronavirus brings a lockdown in the movement of people, it doesn’t point to an altered future, but rather an accelerated one.

The Coronavirus will accelerate changes in the economy that are underway.

We were already shifting the supply chain to include home delivery of groceries and everyday items.

The Coronavirus lockdown only speeds that shift.

Amazon and other suppliers are hiring thousands of workers to meet the acceleration.

Education was already moving online and will only do so more now, that schools have cancelled classes and sent students home to log onto their computers.

Businesses were already moving to video conferencing and remote-worker organizations. 

The Coronavirus ‘stay at home’ mandates across the globe, encourage more users of Zoom and remote-worker software.

Healthcare was already moving to telehealth-based care. 

The overload of Coronavirus patients on the healthcare system will increase usage of that model.

The Coronavirus is moving our economy to the next generation and while it may be painful in the short run, it’s inevitable in the long run.

As a startup, think about how your company can be a part of the next economy.

That new economy is now here.


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

Let’s go startup something today.

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


Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes back William Davis, Managing Director, Technology and Investments (New York) of family office LDJ Capital who offer many services, including asset management, financial advisory, philanthropy, art advisory, wealth management, valuations and investor relations.

Bill, who started his career in artificial intelligence and robotics and is very experienced in the FinTech space, discusses what he has been doing since his last interview with Hall back in 2018. He tells us what he is excited about, what his best investment was thus far, and opportunities in Africa. 

He goes into great detail about the investment opportunities in Space and welcomes anyone who reaches out to him with questions or investment opportunities. 


You can find LDJ Capital at https://ldjcapital.com/ 

Bill can be reached via LinkedIn at https://www.linkedin.com/in/bkmassive/ 

He can also be contacted via email at william.davis@ldjcapital.com and bkmassive@gmail.com and via telephone at 718-757-4195

In this episode, Hall welcomes Jared Augustine, CEO and Co-Founder of Thuzio. Thuzio is a sports events and media company based in New York that hosts pop-up events and produces live shows with iconic athletes. Alongside Jared, Thuzio is run with the combined work of Tiki Barber (New York Giants) and Mark Gerson (GLG).

Jared worked in the venture-backed technology businesses nearly his entire career, however, he welcomes and is enjoying the different challenges associated with running Thuzio.

Even though they are a small company now, they are a force to be reckoned with and they are very excited about the future.


Visit Thuzio at www.Thuzio.com 
Jared can be contacted via LinkedIn at https://www.linkedin.com/in/jaugustine/ and on Twitter

at https://twitter.com/jaredaugustine
He can also be contacted via email at jared@thuzio.com

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


The Coronavirus has taken an historic 10-year bull market and turned it into a bear market.

With comparisons to 9/11, the 2008 financial meltdown, and the Great Depression, startups and investors are adjusting to a new way of living.

In the short term, the investors will look for a gyrating market to settle out. This will take several weeks; maybe months.

After investors adjust to their new found portfolio status, they will re-engage investing in startups.

Some investors will look at this as a great buying opportunity and will move into the market more quickly. 

Others will move away from the public markets, fed up with the frantic nature of public sentiment. They will look for private companies with solid growth prospects.

Based on previous downturns, early stage startups (Seed and Series A) will see the same level of deal-flow activity.

Later stage startups (Series B and beyond) will see reduced investments as their higher-level dollar raises will be difficult to support in a tightening market.

Valuations will also come down. Investors who lost x% in the stock market will be looking for an equivalent haircut in valuations by startups.

Startups on the West Coast and East Coast, having over inflated valuations, will see the greatest drop. Those in the Midwest will see a small to moderate drop.

Startups will find that it takes longer to close sales (especially high-dollar products) as customers will take longer to make decisions and be slower to sign up.

This will make it harder for the startups to tell the growth story to investors who will be increasingly looking for ‘sure thing’ investments.

It’s important to adjust your fundraise strategy accordingly and move to a more conservative growth plan.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes Brad Payne, CEO and Founder of Walker Trolleys, a designer golf pushcart company based in Austin, Texas.

Brad, who worked at Apple for many years is an avid golf player and over the years has used many types of golf pushcarts. He realized that there were many improvements that could be made to the existing models, from how slowly current carts open, to the outdated material being used to manufacture them. Upon returning from a trip to Scotland, having visited the world-famous Old Course, the first design for Walker Trolleys was born.

Shipping of Walker Trolleys is scheduled for June 2020.


Visit Walker Trolleys at www.Walkertrolleys.com

Brad can be contacted via LinkedIn at https://www.linkedin.com/in/bradpayne/ 

He can also be contacted via email at brad@walkertrolleys.com

In this episode, Hall welcomes back David Mes of Off The Grid Ventures, which invests at the seed stage in B2B-tech companies where women and foreign founders are at the helm. This category of founders is underrepresented, but with the help of Off The Grid Ventures, they aim to help their investors achieve top returns on their investments.

Since the last podcast, David has been very busy with Off The Grid Ventures, but he also also joined the management team of one of the companies they invest in. Over the past three years, Off The Grid Ventures has invested in over 25 companies and sold 5.


Visit Off The Grid Ventures www.otgventures.com/

David can be reached via LinkedIn at https://www.linkedin.com/in/davidmes/ 

He can also be contacted via email at david@otgventures.com 

In this episode, Hall is joined by impact investor Dr. Alicia Robb, Founder and CEO of Next Wave Impact who are “working to increase diversity, inclusion, and impact in early-stage investing and our entrepreneurial ecosystem through our innovative learning-by-doing progressive fund model.” 

Alicia received her M.S. and Ph.D. in Economics from the University of North Carolina at Chapel Hill. Next Wave impact works to decrease the gender and racial gap in entrepreneurs and investors. Out of 99 women in their first fund, 25 of these are women of color and the company has invested in 13 companies to date. Alicia speaks passionately about leaving a sustainable and socially just planet for future generations.

You can find Next Wave Impact at Nextwaveimpact.com and on Twitter at @nextwavenetwork 

Alicia can be contacted on LinkedIn at https://www.linkedin.com/in/alicia-robb-a888228/ and onTwitter, @aliciarobb

In this episode, Hall welcomes Samy Eissa, a 12-year veteran in the music industry. He founded Hit Ventures, a boutique VC fund & consulting firm leveraging its exclusive network of partners who assist startups primarily in entertainment, media & hospitality technologies. 

As an entrepreneur, entertainment professional and business enthusiast, Samy constantly looks to push the envelope with innovative ideas built on talent and long lasting relationships.

Hit Ventures closely assists Seed and Series A level startups to build, market and grow their companies ensuring founders’ success and investor interests.


You can find Hit Ventures at Hitventures.co

Samy can be reached via LinkedIn at linkedin.com/company/hitventures, on Instagram at instagram.com/hitventures on Twitter https://twitter.com/SamyHitMGMT 

He can also be contacted via email at Samy@hitventures.co

In this episode, Hall is joined by Brent Ogilvie co-founder and Managing Director of deep-tech investment firm Pacific Channel Limited, headquartered in New Zealand. Pacific Channel Limited was founded in 2006 and to date, has inserted over NZD $50 million of early-stage funding into 27 New Zealand early-stage companies.

The New Zealand government is very supportive of startups and Brent believes that a team with a variety of skills is important to that company’s success. He explains new advances in the deep-tech space to include hope for kidney transplant patients.


You can find Pacific Channel Limited at Pacificchannel.com   

Brent can be reached via LinkedIn at https://www.linkedin.com/in/ogilvie/ 

He can also be contacted via email at bogilvie@pacificchannel.com

In this episode, Hall welcomes Pedro Falcão, Managing Director of LC Ventures, the first global, hands-on, accelerator-investment vehicle in Portugal.

Pedro’s began his career in the 1980’s in roles ranging from programmer, to analyst, to strategic consultant (just to name a few). When he realized he wanted to work for himself, Pedro became an early-stage investor and, to date, has invested in over 100 startups. Helping startups is what makes him happy, and because he has experience across many industries, he has a wealth of knowledge to share.

You can find LC Ventures at Lcventures.pt

Pedro can be reached via LinkedIn at https://www.linkedin.com/in/pedromfalcao/

He can also be contacted via email at pedro.falcao@lcventures.pt

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

There are several approaches to Due Diligence. The most common is the “Thorough Approach” in which you review each aspect of the business and focus on the top items.

Main areas to cover in due diligence are:

Market

• What’s the market size -- Total, Serviceable, Beachhead?
• How fast is it growing?

Product 

• What is the state of the product both technical and market?
• Does it solve a burning need or add general value?
• What actually has been developed?
• What remains to be developed to go to market?
• Who has used the product and what do they say about it?  

Legal

• What contracts are in place?
• Are there any lawsuits?

Intellectual Property

• What patents have been filed/approved and when?
• What trade secrets do they have?

Financials

• What revenues have come in?
• What are pending?
• What is the burn rate?

Capitalization

• What is the capitalization structure?
• Who are the major players?

People

• Key players and their roles and responsibilities?
• What contracts are in place with each?

Of course there’s a checklist for each area to complete as well, but this gives an overview.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

Most investors look for startups in which they can find a return on their investment.

In the diligence and funding process, what the investor really wants is to not lose all their money.

They want to reduce risk to zero.  

As a startup raising funding, you can help the investor find confidence by showing the risk mitigation you have put in place.

For each concern, show how you’ve mitigated the risk.  For example:

How do we know the team will execute -- respond with “we’ve demonstrated execution so far with these results.”

How do we know we can sell the product  -- respond with “we’ve sold this much so far and will continue using the same process.”

Remember where the investor is coming from and show how the risk has been reduced, even though it’s not zero.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

I once read a sixty-five page business plan that talked about the startups’ services and the benefits that came from it.

After reading it, I met with the CEO and said, “This is great. What is it?”

I couldn’t figure out exactly what they were selling. 

From your pitch, investors want to know what your product is, not just your technology or benefits.

It should come near the beginning of the pitch as some investors have difficulty focusing on what you’re saying until they know what the product is. 

It’s important to show the product and define it clearly so investors know how you will approach the market.

If it’s a physical product, show a picture of it.

Make sure the product has a name. This helps establish it as a real thing in the investor’s mind, even if the product is still in development.

I once had a startup bring the physical casing of their product to hold up during the pitch. The case was empty, but the fact that there was a physical device to show made it seem real.

Say what it does in five words or less so the investor gets a high-level understanding of it.

Even if the product is not yet ready for sale, treat it like it has form and function now, just so investors can grasp what you are doing.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

In raising funding you need to build a relationship with the investor and communicate your story. 

Both take time. 

It’s a numbers game. You have to put yourself in places to meet people.

Once you’ve met someone, you need to build on it with follow ups in email, calls, and meetings. 

If you wait too long between updates, the investor will lose the thread of your story.

It takes seven touches to close a sale, so it will take at least seven touches to close an investor.

There will be a great number of ‘no’s, so look at a ‘no’ as a chance to improve your pitch and your plan. 

It takes time to build a relationship so give yourself plenty of time to do so on your fundraise. 


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

Let’s go startup something today.

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


Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

Investors look for some protection over the idea. Patents and trade secrets can help.

Half the value of a patent is for show, to investors.

In practice, it’s difficult to use patents as the sole means for protecting your business from the competition, but it can help.

If you have patents, investors want to know what was filed and when.  Was it a provisional patent, or a design patent, or a utility patent?

No one expects you to have awarded patents for utility or design patents, as the process typically takes over three years to complete.

If you don’t have any patents, it’s advisable to file a number of provisional patents so you can tell investors ‘we have patent pending technology’.

One advantage of provisional patents is that it gives you a year to figure out if patents can provide any reasonable protection and then file for a full patent.

You don’t have to pursue those patents if it doesn’t turn out to make business sense.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

In raising funding, investors want to know what progress the company is making. 

After the initial presentation the investor wants to hear about progress in four areas:

Sales, team, product, and the fundraise.

For Sales -- show pipeline forecast, revenue increases, and key accounts going through the sales funnel.

For Team --  show the experience of the team and what team members are doing to move the ball forward on the business. 

For Product -- show the status of the product and how it is developing.  Show customer success stories as well as the customer ROI.

For Fundraise -- show the fundraise progress including interest, committed, and invested amounts.

Updates on the market size and growth and the competition status is not of interest.

The investor wants to know what you are doing. 

Focus on your updates on these four core items in each communication with the investor to give a sense of traction and momentum.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

Most startups focus on the product first and treat the customer as an after-thought. 

The investor knows that in the long run, customer revenue will make or break your business -- not the product. 

In every discussion with an investor you should give a customer update.

Even before you have a product you should be talking with customers about their needs and relaying that to investors.

As you build the product, you want to maintain customer interactions with you and your product and share that with investors.

Highlight to the investors, the customers’ problems and the solution they would like to see.

It’s important to show the investor that customers are with you on your journey and not something to be recruited later when the product is done.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

To pitch your deal you must first start with a prospect list of investors.

Include your contacts who are angels, family offices, and VCs.

Canvas your network for those who know angels, family offices, and VCs.

This is two degrees of separation which means warm introductions can work.

When it goes to three degrees of separation or more, then warm introductions no longer work.

Include local venture capital and formal angel network groups you have heard about.

Capture the names and emails of all the prospects and plan your approach for each one. 

After you’ve made contact and given the initial pitch, you want to keep those investors up to date on your progress with monthly mailers that are short and to the point.

Focus the mailers on core results related to sales, team, product, and fundraise. 

Avoid long stories as most investors want to know there are real results at play and will listen to the full story later.

Through a series of mailer updates, you can start to build a relationship with the investor.

It starts with a prospect list and it’s important to take the investors on the journey with you.


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

The investor will look closely at the team in your startup.

In particular, they will look for skills and completeness.  Your team must have the skills you need to accomplish the work and you’re not missing anything important.

At the seed level, a complete team is someone who is building it and someone who is selling it.

No fair, everyone is building it and no one is selling it.

This is the most common mistake startups make thinking we must have a product before we can go sell it.  You should be selling it all the way through. You may not be generating revenue but you should be bringing the customer through the process just as you are doing so with the investor.

In later-stage firms, the team will expand but you can again summarize the team’s capabilities as -- do you have team members who are building it and those who are selling it?


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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

The sign of a quality pitch is the simplicity in the message.

One test is, can you say your business in five words or less?

You should know your business well enough that you can boil it down to the core value proposition.

Here are some examples:

We make radiation hardened memories.

We provide you additional energy.

For TEN Capital we say, “We connect startups for funding.”

You’ll be amazed at how much easier it is to communicate your message when you can say it in 5 words or less.

It’s a great way to introduce your company to investors and works well as a part of your elevator pitch.

In fact, it could be your tagline.

Try it for your business.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall is joined by Dana Myers, founder of Myers EV.

Myers EV builds and services electric vehicles, something that Dana states he has been obsessed with for decades. The mission of Myers EV is to “make electric vehicles affordable and practical to everyday people”.

Dana provides facts, statistics and comparisons between gas vehicles and electric vehicles. He explains the many advantages of owning an electric vehicle, one being that gas-vehicle sales will drop dramatically and will then be banned outright in many countries.

You can visit Myers EV at https://myersev.com/

Dana can be reached via LinkedIn at https://www.linkedin.com/in/dana-myers-3029102/

He can also be contacted via email at dana@myersev.com

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

In raising funding, you always start with your core network and increasingly expand the circle outward.

The list includes the following:

• Family
• Friends
• Coworkers
• Your service providers such as attorneys, accountants, etc.
• Past coworkers

As you progress through this list, you ask for referrals to second connections.

After your network is finished, you expand the circle further with:  

• Local angel networks
• Local VCs
• Local family offices
• National angel networks
• National VCs
• Some look at crowfunding portals.

And for later stage startups there are broker dealers.

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

Let’s go startup something today.


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

Check out our other podcasts here: https://investorconnect.org/

For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes Vinod Jose, founder of Konglo Ventures LLP. Konglo Ventures is a seed funding firm based in Cochin, India, with partner offices in Dubai and New York.

Since 2013, Konglo Ventures has invested in companies in India ranging from a healthcare platform utilizing acute disease management modules for early diagnosis, to a matchmaking app. Vinod is originally from India, but is now based in Philadelphia. As an experienced angel investor, he gives advice to both investors and entrepreneurs.

You can find Konglo Ventures at kongloventures.com  

Vinod can be reached via LinkedIn at https://www.linkedin.com/in/vinod-jose-04805b11/

He can also be contacted via email at vj@kongloventures.com

Hall is joined by investor and advisor Joy Schoffler. Joy has won numerous awards including Women Communicators “Outstanding communicator”, CEO Magazine “Entrepreneur of the Year” and Austin’s Under-40 award. She served as an officer in the Army Reserves & Texas State Guard.

Joy founded, ran and sold Leverage PR, one of the fastest-growing PR firms in America. Currently, she manages a portfolio of FinTech companies and real estate investments by determining where the most value can be added.

Visit her at at www.Joyschoffler.com

Joy can be reached via LinkedIn at https://www.linkedin.com/in/joyschoffler/  

She can also be contacted via email at joy@joyschoffler.com

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


Before you launch your fundraise campaign, prepare your business, investor documents, and your investor network.

For the business, check with your team, board, and investors to gain alignment.  Your fundraise launch should not come as a surprise to them. 

Prepare your documents including pitch deck, financial proforma, and diligence room.

Your financial proforma should layout how much you should raise and what you will accomplish with it.

If you’re not sure how to set this up, then write down your current revenue and the revenue you will have in 24-36 months.  From this you can extract how much funding you will need to raise and how many people you’ll need to hire.

Your pitch deck should tell the story of how your business makes money and why it will succeed.

Finally, prepare your investor network. Make a list of investors to contact including existing investors.

Setup a few initial meetings and tell the prospective investor you plan to launch a fund raise in 3 months.  This removes the pressure from the investor and often elicits feedback on how much to raise, how to structure the deal, and more.


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

Let’s go startup something today.


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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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


For raising venture funding, first consider if you have a deal that’s in the game for venture funding by asking these questions:

Is it a high-growth company?

Is it scalable?

Do you have an experienced team ready to join?

Do you have a platform-based business, or is it a single product?

Do you have recurring revenue?

Do you have virality built into it?

Do you have network effects in it?

Are you addressing a large market?

Do you have a clear competitive advantage?

The more times you can answer yes to these questions, the more you have a venture business that qualifies for venture funding.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

In considering a fundraise, think about your ultimate goal with the business.

Are you building a business that will be your lifestyle business for the next 20 years, or are you building a business that you plan to sell for a sizeable gain?

What’s the exit plan for my business?  How do you see it ending up?

What’s the timeline for the business?  Is it a going concern for the next 5, 10, 15, 20 years?

If you know the exit plan of your business and how long it will take, then funding the business becomes much easier to sort out.

If you plan to keep the business as a cash flow machine for yourself, then revenue-based funding may be the way to fund it.

If you plan to sell the business for a nice return, then equity funding will be a good option.

If you don’t need much funding, then you could cash flow it from revenue. 

If you don’t plan to sell the business and need a small amount of funding, you could take out a loan and after you pay it off you have the business free and clear for whatever you want to do.

The key is to understand the overall game plan for the business and then decide how to fund it.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/|
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes Andrew Coors, CEO and Founder of Steelhead Composites which was founded in 2012.

During his career, Andrew has managed a multi-million dollar fund, held an executive position at a Fortune 500 Company and more. Steelhead Composites engineers, designs, manufactures and tests their products in-house in Colorado. They currently export fluid power/hydraulic accumulators, composite pressure vessels and gas storage to 26 countries. |

Andrew can be reached via LinkedIn at https://www.linkedin.com/in/andrew-coors-7615093/  
He can be contacted via email at acoors@steelheadcomposites.com 
You can find Steelhead Composites at http://www.steelheadcomposites.com/

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

How do you know if you need funding for your startup?

First, consider the type of business you are going to build and what it will take to get it up and running.

Are you setting up a services business? Or will it be a tech-enabled business? Or will it be a physical product business?

The type of business will determine the cash flow needs. 

Service businesses can be bootstrapped by using customer money to fund it.

Tech-enabled businesses typically need to raise funding due to the cost of building out the technology that drives it.

Physical product businesses need to raise funding along the way due to the cost of building product and inventory.

The second question is how fast do you plan to grow?

The faster the growth rate, the more funding you’ll need to grow it.

The slower the growth rate, the less funding you’ll need.

Consider these two questions to figure out how much funding you’ll need.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

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

In raising funding it’s best to break the raise into milestones rather than raising the entire amount of funding in one go.

Milestones are typically broken out as follows:

Raise $250K from family and friends to build the initial product and stand up the business.

Raise $500K seed round from angel investors to finish the product and start engaging customers.

Raise another $500K from more angel investors in a seed+ round to fill out the team and solidify the business.

Raise $1M to $3M from venture capital to grow the revenue.

If you raise too much funding at the start of the business you’ll end up giving away too much equity.

It’s best to tranche out the raise and increase the valuation at each step.

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes Military Veteran, Doug Doan of Hivers and Strivers.

Hivers and Strivers is an Angel Investment Group focusing on early-stage investments to support startup companies founded and run by graduates of the U.S. Military Academies. This group of investors is industry and geography-agnostic and they invest exclusively in companies with great leaders. 

You can find Hivers and Strivers at www.Hiversandstrivers.com

Doug can be reached on LinkedIn at https://www.linkedin.com/in/doug-doan-75156bb/ or via email at doug@hiversandstrivers.com

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

I receive many a startup that tells me they’ve talked to everyone in their area to raise funding but they haven’t found all the funding they need.  What can they do?

When I started angel networks in the 2000s, they were mostly generalists that invested in local deals.  

Today, they are mostly specialists looking for specific criteria and they rarely find those deals in their backyard.

As investors scan nationwide for deals, so startups must start looking there as well. 

If you’re in a major startup hub such as the Bay Area or New York City, then you most likely can raise most if not all of your funding in your resident city.

If you’re not, then you need to take a country-wide perspective on your fundraise from day one. 

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

Let’s go startup something today.

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

In this episode, Hall welcomes Josh Rasmussen of Monday Motorbikes.

Josh is the co-founder and CEO of Monday Motorbikes, an electric motorbike company which is based in California. The story of where Monday Motorbikes was founded is very similar to that of one of the Big Four technology companies in the world. Josh is driven by personal passion and an excitement to solve difficult problems associated with complex hardware.

You can find Monday Motorbikes at www.mondaymotorbikes.com

Josh can be reached in the following ways:

Email: Info@mondaymotorbikes.com, or investor@mondaymotorbikes.com
LinkedIn: www.linkedin.com/in/joshrasmussen/

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

To launch your startup identify a large market then target a small segment of that market to attack first.

Choose your first segment based  on easy to access and a close fit to your initial product.

In other words, focus on your most ideal customer and then grow your business from there.

Most startups want to take on the world but their efforts are easily diffused.  

It can be difficult to be all things to all people in the early days of your startup.

You’re looking for wins, testimonials, and proof that customers will buy your product.  

Start with the ones who are the best fit and then expand the circle from there. 

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

Let’s go startup something today.

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

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For Feedback please contact info@tencapital.group

Securities law allows for startups to take investments from family and friends.  

On this episode of Startup Funding Espresso, Hall speaks about the relevant exemptions.

In this episode, Hall welcomes Gregory Bohlen of Union Grove Venture Partners.

Greg Bohlen co-founded Union Grove Venture Partners in 2014. Greg’s experience and relationships in the venture capital and investment banking communities have been developed over the past 30 years, and he has invested in over 50 venture-backed companies.

Here they speak about Grove’s most recent investment strategies and partnership criteria.

You can find Union Grove Venture Partners at https://ugvp.com/

Gregory can be reached on LinkedIn at https://www.linkedin.com/in/greg-bohlen-0768232/

In this episode, Hall welcomes Maggie Sprenger of Green Cow Venture Capital. Green Cow Venture Capital is a venture capital firm that backs dynamic founding teams using greenfield technologies to solve big problems around scarcity and inefficiency.

Green Cow is sector agnostic, and all of their startups are trying to solve big global market problems around inefficiency and scarcity in their respective industries - they've coined the term Societal Infrastructure.

Maggie Sprenger has an extensive track record of more than fifteen years in venture and real estate investment. Fueled by a strong desire to make a positive impact, Maggie has a passion for applying her entrepreneurial and portfolio expertise to drive meaningful innovation. A San Francisco native, Maggie now calls New York City home.

You can find Green Cow Venture Capital at https://www.greencow.vc/

Maggie can be reached on LinkedIn at https://www.linkedin.com/in/maggiesprenger/

How much equity should you give up to the investors?

Friends & Family Round: Less than 10% most often in the 5-6%
Angel Round: It’s 20-25%
VC Series A Round: 25% to 30%

It’s important to keep the founders motivated so if too much equity goes to investors, there’s little incentive for the founders to keep going.
As a startup, you want to see value from the investors in addition to funding.

Typically, family and friends can only help a little.

The startup can also use a convertible note which is a debt instrument that converts to equity later. This delays the valuation discussion until the startup has built products, closed customers, and the values in the business are more clearly defined.

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

Let’s go startup something today!

In this episode, Hall welcomes Pieter Dorsman of Angel Forum and E-Fund. Angel Forum is one of the longest-serving angel networks in Canada. They are a non-profit organization and presenting companies have raised over $35 million directly through their forum. Angel Forum also offers workshops to both entrepreneurs and investors.

E-Fund was founded to achieve consistently higher returns and more exits from angel investments. By investing via teams, they can do more due diligence, leverage the industry expertise of investors and provide post-investment advice to the companies they invest in.

Pieter is a seasoned advisor, investor, and mentor. He is also President & CEO of Redpeaks Management Inc., a consulting firm focused on advising technology companies on capital raising, M&A and restructuring activities and everything related.

Are you considering launching a Series A fundraise?

For startups not requiring FDA, you will need the following:
- A product with revenue, preferably above $500K/year
- A growth plan to reach $10M annual revenue
- A strong team with growth company experience
- A credible funding plan to maintain growth with reasonable burn rates
- An updated financial proforma showing your growth plan and use of funds
- A pitch deck showing your growth plan
 
If you are aiming for a target valuation, you may have to raise a Seed+ round of $500K to position the company with the proper KPIs and growth rates before pursuing the Series A.

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

Let’s go startup something today!

Luis asks: Why am I being rejected for funding because I am a startup?

Investors always ask that I have at least one year in business or more and that my company has revenue.

Usually, when you start a business you start from scratch. That is when you need the support to launch and develop new technologies.

In my case, there were three reasons that they closed the door on me. I have no revenue. The technology that I developed is superior to the current ones and big corporations do not want to accept the challenge of the new generation of science and technology.

If my company is generating revenue then I do not need any support to launch my products and services. Don’t you agree?

Well, Luis, it sounds like you have a new invention but cannot find funding for starting up a business around it. The investor wants to see proof.

You must demonstrate product validation and market validation. The product works and someone will pay for it.

So my recommendation is to find a paying customer who needs your innovation and build a custom version of your proposed product.

It won’t be the final product you envision. You have to start small and grow the product over time.

In this way, customers are funding your product development.

This is an ideal way to fund your business as you learn about the needs of the customer as well as build a standard product for sale to others.

Keep in mind, many customers are not going to get excited about 10% incremental improvement on cost and effectiveness over the competition. It takes a 10X improvement in reduced cost and improved functionality for them to switch.

Make sure your product plan includes a path to a 10X improvement.

Once you have revenue you may still need funding to grow the business. But at that point, you will have more choices.

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

Let’s go startup something today!

In fundraising as in all business, one should always show a grateful attitude.

This applies to both startups and investors.

Begin your call or meeting with a thank you.

Such as:

Thank you for taking time

Thank you for meeting with me

It sets the proper tone for the discussion. Gratitude shows a thankfulness to the other and recognizes their time.

It shows their effort is worth something and won’t be taken for granted.

As always, I know your time is important so 

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

Let’s go startup something today!

In this episode, Hall welcomes Anurag Ahuja of TakeOut7. Anurag is a serial entrepreneur, founder, and CEO with over 20 years in the SaaS platform, internet marketing, retail, eCommerce, and data & analytics.

TakeOut7 is an AI-based platform that handles ordering and traditional/digital marketing for independent restaurants. By using TakeOut7’s solutions, restaurants get their online orders directly to their kitchen printers avoiding the painstaking process of manual order entry. TakeOut7’s automated, personalized promotions help restaurants increase their overall revenue by greater than 10% in less than 1 year - all this at no cost to the restaurant via a minimal pass-through business model to the consumer.

Anurag talks about what brought him to the tech space, to begin with, and how he came to the restaurant technology sector. He advises investors to look for companies that can leverage AI and data to help automate tasks for independent customers. Anurag discusses the evolution of the restaurant tech space, and how consolidations and mergers will affect the sector landscape. He also highlights some of the challenges in the space, from the budgetary constraints of independent restaurants, to customers unfamiliar with or unprepared for digital commerce and online ordering. Finally, Anurag talks about TakeOut7's business model and how they are leveraging data and AI to address needs in the space.

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

Startups make many of the mistakes.  Here are two common ones to avoid:

Thinking you must have the perfect product before you talk with anyone - including customers.  
Many startups go into development mode until they have their first product, and then launch it to the world. Often with a thud.
Instead, involve customers at every step of the process. In fact, customers should come before the product and not after. 

Hiring the wrong people
Many startups hire people they know rather than people with skill. Some hire with the notion that the candidate “needs a job” rather than ”they have the skill.”
Other hiring mistakes include
a. Hiring B people instead of A people. 
b. Hiring someone to fill a specific position without fit to culture of the company.
c. Hiring someone for work that is not yet defined or funded.

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

Let’s go startup something today!

In this episode, Hall welcomes Samara Gordon of Hyperplane Venture Capital. Hyperplane Venture Capital is an investment firm focused on exceptional founders building machine intelligence and data companies. They partner with exceptional founders who are leveraging machine intelligence, sensor technology, and cloud computing to solve the world’s hardest problems uncovering the underlying structure for each problem and creating solutions at the nexus of perception, communication, intelligence, and insight.

Before joining Hyperplane, Samara worked in Strategy Consulting in New York and Product Management for a venture-backed fin-tech startup in Boston. Samara was Founder and CEO of The Faster Times, a predictive analytics startup that built betting markets for global CPGs.

In this episode Hall and Samara speak about what she finds most exciting at the moment in fin-tech as well as her advice to both investors and startups in the space. For investors she advises that if you are going to invest regularly, try to commit to a strategy around a check and round size and sort of the target ownership that you're going after. For startups, Samara says it's never too early to think about the business fundamentals and the go-to-market strategy and sales, even in the early days.

I’ve talked with numerous startups who has a founder that no longer works with the company and has taken their equity with them.

One solution to this problem is called Founder Vesting

Many startups choose to structure the founder shares as restricted stock.

This reserves some shares which must be “earned back” by the founder over time.  The longer the vesting schedule the more shares the founder earns.  The corporation holds the restricted shares until vested.

Vesting founder’s shares incentivizes them to stay with the company and remain engaged with the business. 

If the founder leaves early, then the unvested shares could be used to compensate their replacement.

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

Let’s go startup something today!

In this episode, Hall welcomes back Henry Yoshida Founder and CEO of Rocket Dollar Inc. Rocket Dollar was founded in 2018 with the belief that retirement is changing. They believe that people should not be limited in their investment options as they work towards the retirement they envision for themselves. Rocket Dollar makes it safe, simple, and fast for people to take control of their retirement savings.

Henry is a successful entrepreneur and an experienced angel investor. He was the founder of the venture capital-backed robo-advisor retirement plan platform Honest Dollar (acquired by Goldman Sachs), and MY Group LLC (acquired by CAPTRUST), a $2.5 billion assets under management investment firm. He was a Merrill Lynch Vice President, and proudly serves as a Central Texas Angel Network Partner, Techstars + Capital Factory mentor, and NextGen Venture Partner.

In this episode, we catch up with Henry and what he has been up to since our previous episode. Since we last spoke, Henry has been progressing his business and spending most of his time on the entrepreneur operator side of things. He shares some of his investing experience with both the best and worst experiences he has encountered and shares what he ultimately thinks is key- balance. In a startup, you have to come to work and you have to execute every day, but there's always a limited lifeline for every startup by definition until it's no longer a startup.

The terms sheet sets out terms such as Pari passu, Last Money in Rules, Exclusivity and confidentiality, and Conditions of Financing

Pari passu is a Latin phrase meaning equal footing and without preference. This clause basically states that if the startup issues any new classes of stock then it shall have equal rights with prior classes. This applies to liquidation preferences, voting rights, and so on.

The term prohibits the founders from creating a new class of stock that puts existing investors second in line.

Last Money In Rules term says whoever puts in the most recent funding calls all the shots.

The exclusivity term seeks to prevent the founders from engaging other investors for some period of time. A 30-day duration is typical.

Tied closely to the idea of exclusivity is the confidentiality clause. The investors do not want the founders to reveal any deal terms or other information to competing investors.

Conditions of Financing terms require founders to formalize items such as employment and non-compete agreements with the startup and legal assignment of all inventions and other intellectual property to the startup entity.

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

Let’s go startup something today!

In this episode, Hall welcomes Nick Iovacchini of KettleSpace, a New York City-based drop-in coworking that partners with local businesses. A former college baseball player, Nick has been an entrepreneur since leaving college. He used his experience in the restaurant space to co-found KettleSpace as a way to provide affordable coworking spaces as well as support local restaurants.

Nick discusses the advantages of a partnership between coworking and food service. He also highlights some of the challenges in the space and provides advice for investors looking into the coworking sector. Finally, Nick talks about the future of KettleSpace, and why he believes it will translate to markets beyond NYC.

The terms sheet sets out Drag along rights and Protective Provisions

Drag along rights give the investor the right to force the shareholders (founders and others) to sell the startup. Drag along rights are common in VC deals.

The primary reason for a drag along rights clause is that the lead investors want out and require others to join.

Protective provisions state that if the founders want to take any action that might affect preferred shareholders’ investments, the founders have to inform the preferred shareholders and get their collective approval first.

Here’s a list of common protective provisions:
• Merge, sell, or liquidate the company, or any transaction that results in a change of control of the company.
• Change the capitalization structure of the company
• Issue stock senior to or equal to the stock held by the preferred share investor( s).
• Change the certificate of incorporation or bylaws.
• Change the composition or size of the board of directors.
• Pay or declare dividends.
• Take on a debt obligation such as a loan.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today!

In this episode, Hall is joined by Manuk Hergnyan co-founder and managing partner of Granatus Ventures. Granatus Ventures is the first Venture Capital firm in Armenia to provide funding, expertise, and networks to promising technology-driven startups based in or having core value-add activities in Armenia. Granatus Ventures is backed by an experienced team of investment professionals with a passion for building great companies. Granatus was established in 2013 and has offices in Yerevan, London, and Singapore. Manuk is the founder and managing partner at EV Consulting, a leading management advisory and corporate finance firm, with offices in Yerevan and Moscow.

In this episode, Manuk shares his thoughts on what he is most excited about in the industry as well as advice to new investors and startups. He says that being in the venture-capital industry, it provides you with new opportunities every day. The startup ecosystem in Armenia is in very dynamic evolution. There are new and exciting opportunities in deep tech and companies that apply scientific knowledge and discoveries for commercial opportunities. Some of the applications help address the most fundamental problems that humanity and societies are facing. There is a lot of power of technology to solve those issues.

The terms sheet sets out the Information Rights for the investors.
 
The Information Rights section defines what information and reports are required and the reporting schedule, and sometimes which investors are entitled to receive the information.

The standard set of financial reports that investors require include profit and loss (P& L) statements, balance sheets, and cash flow statements. For early stage companies these are typically unaudited financials. For a startup that is up and running, founders should recast the business plan as an operating plan that clearly outlines the key milestones the team intends to achieve.

Typical milestones for a growing startup include sales goals, new product introductions, new customer segment plans, and team expansion. In most cases, reports are provided quarterly.  
 
It’s a benefit to founders to limit the number of investors who will receive reports and financials. Many startups have sensitive or proprietary information, so it makes sense to keep the distribution list small.
 
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today!

In this episode, Hall is joined by Brian Morin of the Soteria Battery Innovation Group. Soteria Battery Innovation Group is dedicated to enabling portable electric power without the risk of fires, no matter the circumstances. Their material architecture eliminates the spark on the inside of a battery that can cause fires. Soteria’s goal is to ensure that materials are available to every battery manufacturer with local production from a broad supply base so that every device - whether a hearing aid or an electric bus - can have a battery that is virtually impossible to self-ignite. 

Brian has over 200 international patents and applications on subjects ranging from advanced molecular metals to high-performance fibers to plastic additives. He has several billion dollars in sales of products based on his inventions, which are used in brands such as Nike, Head, Freescale Semiconductor, Intel, IBM, Rubbermaid, and others. He sees his strength as leading the commercialization of innovative technology.

In this episode, Brian shares his unique take on the state of investing in his sector. According to Brian, the market opportunity is immense. The industry is growing very quickly, averaging a 20-22% annual growth rate. He also speaks about challenges, both regulatory and technical that startups may have to overcome. While regulatory does play a role, you first have to deal with a very conservative market. The industry is very conservative about changing anything because of the risk of safety and the immense cost of safety. Finally, Brian talks about how Soteria fits into this landscape and what they are currently working on.

The terms sheet sets out the board composition.

For an early stage company, the board is comprised of three (3) individuals with one (1) representative being the CEO of the Company, one (1) representative being the Lead Investors or his designee (the Series A Director), and one (1) representative being an individual mutually agreed upon by the Lead Investor and the CEO of the Company.

For a growth stage company, the board typically consists of 5 persons, 2 chosen by the company, 2 chosen by the investors and a fifth person from the industry who provides domain knowledge.

For some investors, there’s also a board observer member named by the preferred share investor who attends the board meetings. The board observer can ask limited questions but does not have a vote in any board decisions.

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

Let’s go startup something today!

In this episode, Hall welcomes back Paul O'Brien of MediaTech Ventures. MedicaTech Ventures is an Austin-grown venture development group and holdings company that connects capital and people in the media and technology industries. An online technology and startup veteran, Paul is known as SEO’Brien for his extensive past in the search industry. Paul works in Venture Capital Economic Development, serving investment in entrepreneurs. He has a passion for media innovation and investment and seeded MediaTech Ventures, a media industry venture development group.

In this episode, Paul catches us up on what MediaTech has been doing since our last interview. MediaTech's perspective in media innovation is that these ecosystems and economies need to develop and mature to serve investor interests the best. The best way to do that is to serve and teach entrepreneurs. Paul explains how MediaTech develops an understanding of all the resources available for investors and startups.

You’ll also learn more about the upcoming SXSW event, Funded House. Funded House is an integrated series of meetups, lounges, speaker panels and parties with a focus on helping funded startup leaders navigate the difficult task of growing their business. Paul shares why it came about and what makes it special.

The terms sheet contains several investor rights relating to Governance and Control. 

Here are three of them:

 Right of First Refusal 

 The Right of First Refusal clause says that if a founder sells his or her shares, then the preferred share investor gets the right to buy those founder shares first. Doing so results in increasing the investor’s equity ownership in the company.

Participation Rights

This clause says that if the startup company sells shares to raise more funding, the current investors have the right to buy the shares first. 

Registration Rights

If the startup registers its stock on the public markets, then the startup must also register the investor stock shares and pay the legal fees for it.

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

Let’s go startup something today!

In this episode, Hall welcomes Mikael Krogh, Managing Partner and Founder of Investigate VC. Mikael has experience as both an entrepreneur and investor across four continents, Europe, Asia, Australia, and North America. Investigate is a Singapore-based VC investing in startups with the Network Orchestration business model – companies facilitating information sharing and transactions within their network and sharing the value created with that network.

In this episode, Mikael shares his thoughts on how the industry is changing and evolving. He says we’re at a point where technologies enable disruption of virtually every industry. More than ever before in history, there's an opportunity to launch something with the potential to disrupt the industry you're starting up in. He goes on to say that, if you have an idea that involves AI and big-data analysis, you can have the infrastructure up and running in a matter of two minutes to support that idea. If you had the same idea five years ago, you'd need to build up the physical infrastructure before you could build the product, and this change is an incredible enabler.

You may come across the term warrants in a terms sheet. Warrants are a type of security that gives investors the option to buy more stock over a designated time frame, at a specific price.
 
Three parameters define the details of a typical warrant clause: the term, the coverage, and the price.
 
The term sets the window of time the investor has the option to exercise the warrant.
 
The coverage sets the number of shares the investor is entitled to buy.
 
The price sets the price at which an investor can purchase the shares. This is typically the same as the current price.
 
Warrants are used to ‘sweeten’ the deal by enabling an investor to buy more shares later.
 
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

In this episode, Hall is joined by Jason Todd of Thinker Ventures, business development and consulting firm specializing in startups and small to mid-size growth companies. An entrepreneur with a background in sales/marketing, programming, and eCommerce, Jason uses his expertise to grow and develop small companies and startups.

Jason gravitates to companies that have a good idea where they are at and can articulate where they want to be. Jason advises investors to get a good grasp of the space they're investing in before committing. For entrepreneurs, he emphasizes the importance of objective market validation and a flexible approach to development. Jason talks about the startup scene in the Midwest region and the particular challenges and advantages that come with it. Jason also discusses his investment thesis and highlights some companies he's had success with. Jason stresses the importance of a compelling growth story and responsiveness to feedback. Finally, Jason talks about one of the sectors he finds particularly promising - Artificial Intelligence - and provides some advice for investors looking into that space.

Pay to play is often used in terms sheets. 
 
A pay to play clause is intended to create an incentive for existing preferred share investors to invest on a pro rata basis in future financing rounds. The clause spells out that, if the existing investors choose not to participate in future rounds, they will lose some or all of their preferential rights.
 
For example, if a preferred investor in a down round chooses to invest then he maintains his anti-dilution rights. If he chooses not to invest, then he loses those rights.
 
Other disincentives for not participating include
- Losing some preferred rights.
- Losing all preferred rights and protections, such as forcing the investor into common stock.

If you fail to pay, then you can’t play.
 
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today!