Investor Connect Podcast

How Angel Investors Engage Impact Investing

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

Angel investors fill the gap between family-and-friends funding and institutional funding.

They engage with impact startups in several ways:

They fund startups with early-stage capital to launch the business. 

They provide mentorship to the startup founders to help the company.

Some angels work as advisors providing services such as accounting or financial work.

Some angels form groups to invest in impact startups.

Each group focuses on an impact sector or geographic area.

Some groups provide funding through individual investments while others form funds.

Angel groups help share the deal flow and the due diligence.

Before investing, an angel investor will look at the team to check their experience.

They will perform diligence on the company for the business model, the competition, sales and marketing, and intellectual property.

Finally, they will look at the impact the startup makes. 

It’s important to measure the impact your startup will have as investors will decide to invest based on it. 


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

Let’s go startup something today.
___________________________________

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Category:general -- posted at: 6:00am CST

What Is a Benefits Corporation?

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

A Benefits Corporation is a legal entity that is set up to provide a public benefit.

The company using this entity must commit to producing a public benefit.

The board of directors must consider the consequences of its decisions on the community.

The company must provide a report on its social and environmental performance.

The standard is the Delaware Public Benefits Corporation or PBC.

A B-corp is similar but distinct from a Benefits Corporation.

A B-corp is certified by B Labs for meeting social and environmental standards for performance, accountability, and transparency.

The company’s impact is measured with an assessment tool by B Labs.

The intention is to encourage the directors of a company to consider the interests of the broader community.

Those pursuing a B-corp must amend their operating agreement.

There’s an annual fee based on revenue for the company to maintain a certification.

Startups providing a social or environmental impact may want to adopt a Benefits entity or B-Corp designation.


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

Let’s go startup something today.
___________________________________

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Category:general -- posted at: 6:00am CST

On this episode of Investor Connect, Hall welcomes William Glass, CEO and Co-founder at Ostrich, and Host of The Silicon Alley Podcast.

Headquartered in New York, New York, Ostrich has built a financial fitness app for low and middle-income families who need a simple way to start improving their finances in order to live happy and fulfilling lives. What makes the Ostrich app unique is the experience addresses the psychological hurdles that prevent people from taking action to improve finances; using social accountability and gamification to encourage actions. It's a similar approach to Strava and Noom in the fitness and weight-loss space.

Ostrich sells annual subscriptions on a per-user basis to companies who provide the app as a benefit to their employees or communities. Ostrich graduated from AARP's accelerator program at the end of 2021 where AARP is now a strategic investor and partner. To date, 80% of their early adopters are on track to achieve their financial goals, 1,000 pre-launch sign-ups, and they have 3 pilot partners going live in Q2 of 2022.

Currently, Ostrich has raised or committed $186k on a SAFE led by AARP with the founders bootstrapping the company up until January of 2022. In March of 2022, Ostrich won first prize at the Rollins Venture Plan competition which included a $50k grant.

In the Silicon Alley podcast, you’ll hear from a variety of entrepreneurs, venture capitalists, and top performers about their journeys and personal finances. From seasoned entrepreneurs who have sold companies for $330 Million to Silicon Valley Venture Capitalists returning billions of dollars to 21-year-old YouTubers earning 6 figures, the Silicon Alley Podcast is a must-listen. You’ll come away both inspired and with actionable advice you can apply to your own business and life.

William witnessed his parents get divorced because of money. They couldn’t agree on basic financial goals or communicate, and the stress was too much. 15 years later, both are still picking up the pieces. William’s background is in software sales leading sales teams at Gartner and opening up a new vertical for an AI startup, Remesh.

Prior to founding Ostrich, Will was recruited by Remesh, a former client, to build out their consulting vertical and worked with firms such as McKinsey, Booz Allen, BCG, and PwC. While at Gartner, Will led sales teams that sold to c-suite executives of tech startups from pre-revenue to $250M in revenue. He was a top performer achieving Winner’s Circle every year at Gartner.

In 2014, Will was awarded a Fulbright scholarship through the U.S State Department where he taught English in rural Thailand for 14 months. He has his B.A. in International Relations from Rollins College in Winter Park, FL. Will is originally from Alabama and now resides in Queens, New York.

Visit Ostrich at https://getostrich.com/, on LinkedIn at www.linkedin.com/company/theostrichapp, and on Twitter at www.twitter.com/theostrichapp

Listen to The Silicon Alley Podcast at www.siliconalleypodcast.com

Reach out to Will at william@theostrichapp.com, on LinkedIn at www.linkedin.com/in/williampglass3/, and on Twitter at www.twitter.com/williampglass3/.  

_____________________________________________________________________

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Direct download: William_Glass_of_Ostrich_and_The_Silicon_Alley_Podcast.mp3
Category:general -- posted at: 6:00am CST

Impact Investment Thesis

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

An investment thesis states what you will invest in, why it will be successful, and what outcome you anticipate. 

It’s important to determine your investment thesis for impact investing.

Here are some guidelines:

Impact investing proposes to invest in innovative companies that seek to change the world.

This change takes place in social and environmental areas such as those specified in the United Nations Sustainable Development goals. 

Impact investing looks to make a measurable change, so the investment must show a metric result on specific criteria.

Impact investing often focuses on companies in healthcare, education, food, and cleantech.

The investment thesis specifies the revenue, sector, and stage of the companies that meet its criteria so you can focus your deal flow efforts.

Impact investing - as in all investment theses - seeks a positive return on investment at the upper range of market returns.

Impact investing can be applied at all levels of investment.  

At the angel level, it fills a gap in the market by focusing on early-stage innovation. 


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

Let’s go startup something today.
____________________________________

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

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Category:general -- posted at: 6:00am CST

What Is Esg?

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

ESG stands for environmental, social, and governance, and represents the area of focus for socially responsible investors. 

This is often referred to as sustainable investing.

ESG investing incorporates environmental, social, and governance factors as it relates to the mission of the business. 

It’s a set of standards for company operations that come into play in hiring leadership, compensation, shareholder rights, and more.

Environmental centers around renewable energy, waste management, water pollution, and deforestation.

Social centers around fair pay, workplace inclusion, and prevention of sexual harassment.

Governance centers around executive compensation, financial transparency, and board diversity.

Many investors focus primarily on executive compensation.

Limited partners increasingly look for ESG-related investments and will not participate in those without it.

Impact investing is different from ESG investing. 

Impact investing seeks to fund startups that provide a measurable impact on a social cause.

Startups applying ESG to their business look for how ESG drives decision-making across all operations including the impact of the product or service, the operations, and that of their employees. 

ESG investors look for their investment to make a meaningful contribution to the cause.


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

Let’s go startup something today.
____________________________________

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

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Category:general -- posted at: 6:00am CST

On this episode of Investor Connect, Hall welcomes Jeffrey Kamys, Chief Investment Strategist and Portfolio Manager at Inherent Wealth Fund.

Headquartered in San Francisco, California, Inherent Wealth Fund is a registered investment adviser focused on thematic and sector-specific investing and are the investment advisors to the iBET Sports Betting & Gaming ETF, the only actively managed sports betting and gaming ETF. The iBET ETF is a basket of stocks that represents the sports betting, casinos, and gambling sector, including but not limited to: DraftKings, Penn National Gaming, Caesars, MGM, and Wynn. They implement innovative strategies and wealth management solutions for institutions. 

Inherent Wealth Fund fully understands how technological advances impact the market and they strive to be ahead of the curve with their approach.

Jeffrey has decades of experience working in the technology industry as well as the analytics field. 

Jeffrey discusses the latest in sports betting and legalization in California and New York, common myths about sports betting, the online information source he finds most helpful, and more.

Visit Inherent Wealth Fund at www.inherentwealthfund.com, on LinkedIn at www.linkedin.com/company/inherent-wealthfund/, and on Twitter at www.twitter.com/InherentWealth

Reach out to Jeffrey at jeffrey.kamys@inherentwealthfund.com, on LinkedIn at www.linkedin.com/in/jeffrey-kamys-19159174/, and on Twitter at www.twitter.com/jeffreykamys.  

_____________________________________________________________________

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Category:general -- posted at: 6:00am CST

17 Sustainable Development Goals

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

Impact investing focuses on social and environmental causes.

The United Nations provides 17 sustainable development goals which serve as the basis for impact investing as follows:

  1. No poverty
  2. Zero hunger
  3. Good health and well-being
  4. Quality education
  5. Gender equality
  6. Clean water and sanitation
  7. Affordable and clean energy
  8. Decent work and economic growth
  9. Industry, innovation, and infrastructure
  10. Reduced inequalities
  11. Sustainable cities and communities
  12. Responsible consumption and production
  13. Climate action
  14. Life below water
  15. Life on land
  16. Peace, justice, and strong institutions
  17. Partnerships for the goals

There are many approaches to each of these goals.

Impact investing supports all of them.

Investors look for your impact to fall into one 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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Category:general -- posted at: 6:00am CST

Investor Motivations for Impact Investing

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

Investors fund impact startups.

Here’s a list of the primary reasons:

The startup furthers social and environmental causes that align with the investor.

Investors want to see their investment do more than just generate a return.

The startup shows strong growth potential and targets a large market.

Investors want to solve large problems.

The startup has a strong social mission and can create real change at scale.

Investors want to see the impact scale up.

The startup meets the individual investor's philanthropic mission.

Investors have impact objectives they want to achieve.

The startup needs mentorship.

Investors want to share their experience with startups.

The startup diversifies the investor's portfolio.

Investors want to broaden their portfolios for investment reasons. 

There’s an old saying:

Angel investors want to make a little money, have a little fun, and do a little good.


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

Let’s go startup something today.
___________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
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Category:general -- posted at: 6:00am CST

Indicators of a Successful Impact Investment

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

Impact investing seeks to fund startups with social or environmental benefits.

Those running impact companies must do so with the intention of providing a social or environmental impact with a measured result.

The investment must provide a benefit that is more than what would have occurred otherwise.   

This is called additionality.

The indicators of a successful impact investment are as follows:

The company can show a measured impact and, based on its business model, forecast that impact over time.

The company should bring innovation that provides the impact.

The company must be able to show a sustainable business model over time in order to deliver the result.

The company must show entrepreneurial skills and capabilities. 

If you have these elements, then you have a true impact investment that is making a difference.


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

Let’s go startup something today.
___________________________________

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

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Category:general -- posted at: 6:00am CST

On this episode of Investor Connect, Hall welcomes Gary Acosta, Managing Partner and President at L’ATTITUDE Ventures (LAT VC), and Co-founder and CEO at the National Association of Hispanic Real Estate Professionals (NAHREP).

Headquartered in San Diego, California, LAT VC is a purpose-led venture fund that invests in early-stage US Latino-led and owned businesses.

NAHREP - also headquartered in San Diego, California - is a purpose-driven organization that is propelled by a passionate combination of entrepreneurial spirit, cultural heritage, and the advocacy of its members. Its mission is to advance sustainable Hispanic homeownership.

NAHREP is one of the nation’s largest real estate trade associations with over 30,000 members and 80 local chapters.

Gary has founded several successful mortgage, real estate, and technology companies, including Prado Mortgage, New Vista Asset Management, CounselorMax, and RealEstateEspanol.com. 

Gary advises startups and investors and discusses the status of the real estate industry and how he sees it evolving. He also shares his investment thesis and speaks about some of the challenges Hispanic startups face.

Visit L’ATTITUDE Ventures at https://lat.vc/, on LinkedIn at www.linkedin.com/company/latvc/, and on Twitter at www.twitter.com/LAttitudeVC

Visit NAHREP at https://nahrep.org/, on LinkedIn at www.linkedin.com/company/nahrep/, and on Twitter at www.twitter.com/nahrep

Reach out to Gary at gacosta@nahrep.org, on LinkedIn at www.linkedin.com/in/gary-acosta, and on Twitter at www.twitter.com/garynahrep

____________________________________________________________________

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

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Category:general -- posted at: 6:00am CST

How to Measure Impact

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

Impact startups provide not only a product or service but also a social or environmental impact.

Impact startups need to know how to measure their impact in addition to their financial return.

Here are some ways to measure it:

The startup could measure the impact for each unit sold.

This works well when the impact is the same for each customer.

An example would be a bottle-less solution for water distribution.

The startup could measure the impact based on a sample and then extrapolate across the entire business.

This works well when the impact is not exactly the same for each customer.

An example would be the graduation rate of a student through an education program.

The startup could look at comparable solutions with a stated impact and adopt those metrics.

An example would be the reduction in carbon emissions based on reduced fuel usage. 

The startup could apply that metric to their own user base.

Impact investors will look for impact metrics from the startup, so it’s important to measure and track 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/ 
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Category:general -- posted at: 6:00am CST

How to Find Impact Investors

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

Impact investing continues to expand in scope.

It covers many industries, including clean energy, food, education, healthcare, housing, clean water, and more.

For startups looking for impact investors, here are some key steps:

Determine your area of impact.

This is important as many investors focus on specific industries and it will help narrow your search.

Research impact businesses like yours to find out their source of funding.

Determine the type of investor you need, such as angel investors, family offices, impact funds, or grants.

Use online database search tools such as the Global Impact Investing Network (GIIN) to find investors in your industry and type.

Investors want to see how their investment will achieve the target impact.

So, measure your startup’s impact, both historical and projected.

Reach out to the investor to find alignment on the impact you are providing.

Then, build a relationship with the investor or fund so they become familiar with you and your work.

Later bring up the terms of your investment offering to the investor.

Finally, close the investor by following their diligence process and funding cycle.


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

Let’s go startup something today.
____________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Category:general -- posted at: 6:00am CST

On this episode of Investor Connect, Hall welcomes Candy Messer, President at Affordable Bookkeeping and Payroll, and Host of the Biz Help For You radio show.

Affordable Bookkeeping and Payroll is different than other payroll services. They offer options to best suit the client's needs as well as schedule tax payments based on the tax filing schedule - according to the IRS’ requirements - rather than debiting taxes when payroll is processed, giving clients access to their cash for longer. Affordable Bookkeeping and Payroll also bundles all typical tasks in the monthly fee, so clients always know what they will pay without any nickel and dime charges added in. And with bookkeeping and payroll services handled in one place, it’s easy for entrepreneurs to have everything managed by one company, and all financial information can be provided to the business tax preparers each year.

Affordable Bookkeeping and Payroll Services has built a strong reputation as one of Southern California’s most trusted bookkeeping and payroll companies. Hard work, attention to detail, mutual respect for others, solid business practice, and high ethical standards have helped their company grow year over year.

Biz Help for You is an education-based podcast that gives information to entrepreneurs offering tips for success in various areas including marketing, website design, budgeting, understanding information on financial reports, and more. 

Candy is a profitability and growth advisor working with entrepreneurs in service-based industries to help them have successful businesses. With experience in the bookkeeping industry since 1998, Candy understands the stresses business owners face and offers customized services to meet their varying needs.

Candy was named Woman of the Year for 2009-2010 by the Peninsula Chapter of the American Business Women’s Association, and 2011 Entrepreneur Mom of the Year by Today’s Innovative Woman magazine. In 2012, the El Camino College Foundation honored her as a Distinguished Alumni of the Year. Affordable Bookkeeping and Payroll was named 2016 Small Business of the Year by the Torrance Chamber and Intuit’s (creator of QuickBooks software) 2016 Firm of the Future.

Candy has been married since 1992 to her husband Garth and they have a son, daughter, son-in-law, and two grandsons. When not running her company, Candy enjoys reading, crocheting, logic puzzles, and spending time with friends and family.

Visit Affordable Bookkeeping and Payroll at www.abandp.com, and on Twitter at www.twitter.com/AffordableBP.  

Listen to the Biz Help For You radio show at https://affordablebookkeepingandpayroll.com/biz-help-for-you-with-candy-messer/

Reach out to Candy at contact@abandp.com, and on LinkedIn at www.linkedin.com/in/candymesser.
___________________________________________________________________

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

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Startup Boards -- Using Donor-Advised Funds for Impact Investing

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

Donor-Advised Funds (DAF) are funds you set up with your brokerage firm to make tax-deductible contributions to foundations and non-profit organizations you want to support.  

You receive the tax deduction when you transfer money into your Donor-Advised Fund. 

The funds continue to grow through investments you choose until you decide to deploy those funds.

This investment opportunity lets you donate a larger amount of money to your cause. 

From there, you can contribute to any cause you like as long as it’s a qualified 501(c)(3) non-profit.

A Donor-Advised Fund structure is much lower in cost than a foundation which is expensive to set up and requires a donation of 5% of funds every year. 

Consider setting up a DAF for your impact investing.


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

Let’s go startup something today.
___________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
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Category:general -- posted at: 6:00am CST

Startup Boards -- Impact Measurements

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

Impact is in the eye of the beholder. 

What impact you see, may not be shared with the investor or company you are working with.

You must measure your impact. There are several systems you can use, such as:

GIIRS -- stands for Global Impact Investing Rating System. It rates companies based on social and impact performance metrics and is considered one of the primary standards.  

IRIS -- stands for Impact Reporting and Investment Standards and provides metrics for social, environmental, and financial performance of a company. 

B Analytics -- developed by B Lab, it provides a tool to assess, compare, and improve impact.

SASB Standards -- stands for Sustainable Accounting Standards Board and provides sustainability standards for over 70 industries.

GRI Standards -- one of the first to provide standards for sustainability reporting.

International Integrated Reporting Council -- provides reporting to bring cohesion and efficiency to the reporting process. 

Within the world of impact investing, there are many sectors. Comparing metrics between sectors can be difficult.

These tools can help.


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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Startup Boards --  Primary vs. Secondary Impact Investing

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

In impact investing, there is primary impact and secondary impact.

Primary impact comes from the company pursuing its mission.  

You measure it based on the effect the business has on the cause it supports.

For example, how many students improved their scores.

Secondary impact measures how the company carries out its mission.

Certified “B” Corporations are an example of this. For a company to qualify as a “B” Corporation, it must achieve metrics in green practices, diversity, pay, and more.

These companies often use secondary impact data to show their performance in environmental activities or community activities.

It is often manipulated data that hides the true mission of the company.

Focus on the primary impact and check the metrics for companies you want to fund for their impact on the cause.


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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The Challenge of Impact Investing

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

Impact investing seeks to make the world a better place through its investments.

As with all investing, it comes with its own challenges.

Most impact investments underperform the market. 

The focus on providing social or environmental benefits degrades the financial return.

Some researchers claim that impact investing receiving market returns is not having an impact, and those delivering an impact end up with below-market returns.

The challenge is finding an impact investment opportunity that provides enough of an impact to offset the lower return.

It’s important to measure the impact the company provides and follow it over time to know that it is making a real difference.

In many impact startups, the social or environmental impact is not clearly defined. 

The impact investor must identify a company actually providing the stated impact, then the investment must actually increase the company’s measured impact.

Impact investing encourages companies to provide a social impact, but there must be a measured result to determine how effective it is.


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

Let’s go startup something today.
___________________________________

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On this episode of Investor Connect, Hall welcomes Justin Breen, Founder, and CEO of BrEpic Communications LLC and BrEpic Network, and author of the No. 1 International Best-Selling Book, “Epic Business”.

Headquartered in Northbrook, Illinois, and founded in 2017, BrEpic Communications LLC will run your social media sites, write clicky stories that highlight you or your business, and find the right pitch for multiple media outlets. 

BrEpic Network is an invitation-only, premium connecting platform for the who’s who in business, philanthropy, and global leadership. BrEpic Network will bring simple yet powerful technology to this network of visionary leaders and connectors. Leaders want instant, credible, vetted access to other leaders, and they want results in a deliverable fashion. BrEpic Network will allow that to happen at an exponential rate.

Justin is an extremely active member of Strategic Coach 10x, Abundance 360, and Entrepreneurs' Organization, and he has an incredible global network of visionaries and exceptional businesses.

Justin reviews his book by telling us the inspiration behind it, the primary audience, the most important takeaway he found, and more.

Visit BrEpic Communications LLC and BrEpic Network at www.BrEpicLLC.com and www.BrEpicNetwork.com, on LinkedIn at www.linkedin.com/company/brepiccommunicationsllc/, and on Twitter at www.twitter.com/BrEpicComm

Reach out to Justin at justin@brepicllc.com, on LinkedIn at www.linkedin.com/in/justinbreen1, and on Twitter at www.twitter.com/BrEpicBreen
____________________________________________________________________

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Startup Boards -- Impact Metrics

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 show your metrics.  

Startups in the impact space should also show their impact metrics, as investors will look for your results there. 

A common mistake by impact companies is to focus on the size of the market to be served and the needs in those markets.  

Instead, you should measure the actual impact results of your business on the market you are serving and show those results.

For example, how many students graduated, how many bottles of plastics were removed from the waste stream, how many students improved their test scores? 

Focus on the primary impact which is on the customer, rather than the secondary impact which is on the employee of the business.

There are several metric systems, including GIIN’s IRIS+ metrics (https://iris.thegiin.org/metrics/), the IRIS Thematic Taxonomy (https://iris.thegiin.org/document/iris-thematic-taxonomy/), and the Impact Management Project (https://impactmanagementproject.com/impact-management/impact-management-norms/).

In short, no one system covers all impact sectors.  

Check out the Sustainable Development Goals site (https://sustainabledevelopment.un.org/?menu=1300) for the categories of impact metrics to see where your deal fits. 


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

Let’s go startup something today.
___________________________________

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On this episode of Investor Connect, Hall welcomes Robert Samuelsen, President and CEO at SmallStart Ventures. 

SmallStart Ventures identifies high-potential entrepreneurs and provides a structured launchpad for their small business dreams. SmallStart Ventures expects to add $315.9M to GDP and 5,500 jobs to the economy.

A study published in the International Journal of Humanities & Social Studies claims the failure rate of a traditional incubator is 90%. According to www.corporatefinanceinstitute.com, the success rate for a VC-backed startup is only 8%.

SmallStart’s one-on-one guidance (Success Coaching) is a 3-year journey and the goal is an 80% success rate. SmallStart’s model is superior to traditional VC startups because they know from the start, the following:

The buyer – the General Manager/Entrepreneur

The time frame – At the end of three years

The selling price – The appraised price

SmallStart offers opportunities for a diversity of individuals who may find it complicated to start a business or who may feel at a disadvantage by societal situations. Their Success Coaches specialize in assisting immigrants, all races, women, single parents, ex-cons, and other demographic groups.

Robert has held positions as the CEO, CFO, and COO for more than 20 years. He has worked for three Fortune 500 Corporations including NCR Corporation, AT&T, and Roper Industries, and was the Founder of Square Knot Ventures, eVine, AvaLAN Wireless, Navibase, and SEE Consultants.  Robert has executed three business turnarounds and has raised approximately $450 million.

Robert discusses his background, starting a business in the area of financial services, potential rewards, how SmallStart Ventures differs from his competitors, and more.

Visit SmallStart Ventures at www.smallstartventures.com

Reach out to Robert at rsamuelsen@smallstartventures.com, on LinkedIn at www.linkedin.com/in/robert-rob-samuelsen-7605051, and via telephone at (520)820-8006.
________________________________________________________________

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Key Terms in Impact Investing

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

There are key terms used in the impact investing world.  

Here is a list of the ones to know:

  1. Below market rate -- an impact investment made with the expectation that the financial return will be less than the market rate of a startup’s investment.
  2. Charitable purpose -- the investment’s purpose has a charitable contribution that aligns with the foundation's purpose.
  3. Mission-related investments -- an investment for social or environmental reasons with a financial return.
  4. Program-related investments -- a specific type of investment made by the foundation that aligns with its mission.
  5. Divest/invest movement -- investors using their investments to achieve social goals.
  6. Due diligence -- an in-depth evaluation of an investment.
  7. Environmental, social, and governance -- incorporates environmental, social, and corporate governance criteria into an investment analysis.
  8. Market rate -- the standard financial return an investor expects.
  9. Socially responsible investing -- an investment strategy that seeks investments that are considered socially responsible based on the business.

It’s important to know the difference between impact investing and non-impact investing. 


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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What Is Impact Investing?

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

Impact investing is an investment in startups that can generate a social or environmental impact in addition to a financial return.  

It can be done anywhere and at any stage of business.

Impact investing includes not only angel investors, but also family offices, pension funds, wealth managers, foundations, and religious institutions. 

Impact investments provide market-rate returns or sometimes less than the market.

It seeks to solve challenges in areas such as renewable energy, microfinance, climate change, housing, education, and more.

Impact investors look for their investment to make a measurable difference.

Impact startups need to show their performance goals related to the industry standards.

Monitor the performance against the targets and report the results to the investors.

Startups should have not only financial metrics but also impact metrics.

Impact metrics show the social or environmental results.

Many impact startups appear to be non-profits showing a social cause but no investment return.

Impact startups need to show both.


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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Venture Fund Defaults 

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

In a market recession, it’s often the case that limited partners - called LPs - are unable to fulfill their capital commitments to venture funds. 

For venture funds encountering this issue, the first step is to open a dialog with the LPs about the capital needs and the LP’s ability to provide the funds.

Explore potential options such as lines of credit both for the fund and the LP.

Fund managers should discuss with the LPs about the strategy tradeoffs between investing in new startups and supporting existing investments.

Fund managers should reconsider the valuation methods as the market environment has changed. 

Fund managers could also approach the LPs about extending the fund timelines given the new market situation. 

For those still raising funds, consider updating existing offering documents to adjust the financial projections and risks. 

Fund managers should also consider the pace of new investments in light of committed follow-on investments. 

Finally, fund managers should review any potential clawback situations and adjust 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.
___________________________________

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This is the Investor Connect KiwiTech 2022 podcast series. In this series, we discuss trends and topics in the startup world. I hope you enjoy this episode.

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Thank you for joining us for the Investor Connect KiwiTech 2022 podcast series. 

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

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Payback Period for the Product

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

Investors look for strong margins on a startup's product as it’s a positive indicator of customer interest and a profitable business. 

One way to metric this is the payback period for your product. 

It’s the amount of time it takes for a customer to repay the cost of customer acquisition. 

To calculate, use the marginal gross profit and the sales and marketing expenses.

If you take the quarterly or annual numbers, you should be able to smooth out the minor variations that come from discounts.

Many companies start with a low price and, over time, raise the price. This forces the company to create an efficient go-to-market strategy from the get-go.

As you grow your business, you can raise your prices, so the revenue flows to the bottom line. 

Calculate your payback period and use the metric with investors.

This demonstrates you know your numbers and are improving margins and efficiency over time. 


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

Let’s go startup something today.
___________________________________

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Category:general -- posted at: 6:00am CST

How to Improve Your Valuation

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

Valuation is a negotiation and not just a formula.

Here are some key points to improve your valuation:

Highlight the team and their contributions to the business.

The team is often no more than one slide in the deck and rarely does their value come across to investors aside from that of the CEO.

Discuss what each team member is doing to make the business successful.

Show previous business successes. 

Demonstrate past accomplishments of the team, in particular exits.

Highlight milestones accomplished so far in the business.

Most fundraises kick off with a successfully completed milestone such as launching the product.

Focus on milestones that show value to the business such as new hires for the team, closing a key customer, or finding a lead investor.

Reduce your burn rate.  

This shows you can sustain longer with less funding. 

In fact, if you can move the business to profitability then your company will be more attractive as it can survive market downturns.

Let the investors propose the valuation and consider the one which gives you the best deal.

Valuation is a negotiation which means everything counts.


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

Let’s go startup something today.
____________________________________

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On this episode of Investor Connect, Hall welcomes Henry Lopez, Managing Partner at Levante Business Group, and Host of the How of Business podcast.

Levante Business Group provides business consulting and services and is the producer of the How of Business podcast.

The How of Business is a weekly show for aspiring entrepreneurs and existing small business owners. If you are looking for actionable advice, tips, and techniques on how to start, run and grow your small business, this is the podcast for you! In each episode, they either discuss a business topic or interview an existing business owner or business service provider. 

The podcast reaches an engaged audience of aspiring entrepreneurs and existing small business owners worldwide. Their popular and top-rated business podcast averages over 72,000 unique monthly downloads, 774,000 unique downloads in 2020, and over 2,200,000 all-time downloads.

Henry is a serial entrepreneur, small business coach, and consultant. He has over 35 years of diverse business experience, including successful careers in the information technology industry, sales, sales training, and business ownership. 

Henry has been involved in 12 different businesses since buying his first business in 1991. Henry has bought and sold businesses and has also developed his own new businesses, including franchises. His businesses span various industries including restaurants, real estate investments, salon suites, software, travel, shared office space and coworking, car washing, and small business coaching and consulting. Henry currently resides in Jensen Beach, Florida with his wife Pam.

Henry speaks about the great resignation, remote work, online sources of information that he finds useful, tips for a successful podcast, what business he would start tomorrow, and much more.

Visit Levante Business Group at www.linkedin.com/company/levante-business-group and listen to the How of Business podcast at www.thehowofbusiness.com/how-of-business-podcast/

Reach out to Henry at henry@levantebg.com, on LinkedIn at www.linkedin.com/in/henry-lopez-9758524/, and on Twitter at www.twitter.com/HenryLuvsBiz

_____________________________________________________________________

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Category:general -- posted at: 6:00am CST

Using Metrics in Your Valuation

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

Metrics can help drive the valuation for your startup fundraise.

Here is a list of key metrics to include:

Number of visitors to your website and their conversion to paying customers. The higher the conversion rate, the lower the cost of sales and the greater the valuation.

Average revenue per customer. The higher the average revenue, the easier it will be to achieve scale.

Monthly or annual recurring revenue. This is the key driver for calculating forward multiples of a valuation.

Revenue run rate. If your revenue is still ramping up, consider taking the current monthly revenue and multiplying it by 12 to give you an annualized revenue run rate.  

This will make your annualized revenue bigger than a look-back method.

Contribution margin. If you have high gross margins, include this in your valuation calculation as this will translate into more dollars going back into the business.

Customer acquisition vs. lifetime value. This ratio should be at least 1:3, but if it’s 1:5 or better, it can improve your valuation.

Churn rate. This is the rate at which customers stop using your product or service. The lower the rate, the better the valuation.

Viral coefficient. This measures how fast your product moves from one customer to the next through referrals. A highly viral product will garner a much higher valuation.


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

Let’s go startup something today.
___________________________________

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Category:general -- posted at: 6:00am CST

Maximizing Your Valuation

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

Valuation is a negotiation and not a formula.

While there are formulas and rules of thumb to help determine valuation, it comes down to positioning and negotiating.

Here are some key points to maximize your valuation:

Emphasize the team and show what they are doing to help your business.

The investors see the CEO often and rarely see the team and so may undervalue them.

Highlight the repeatable, predictable nature of your revenue rather than the absolute value of it.

Investors look for predictability in the revenue, so focus on the factors that generate revenue and show how they are repeatable.

Most fundraises kick-off after achieving a milestone such as a product launch, revenue traction achieved, or a patent filed.

Emphasize your most recent milestones showing customer demand and past market success.

Calculate your valuation with various models to find the one that puts your deal in the best light with the highest valuation.

Consider the market in timing your fundraise. The hotter the stock market, the higher the valuation you can demand.

Connect your startup to a technology trend. Investors will pay more for a hot, new technology, so associate your deal with it.

Positioning your deal properly will earn you a higher valuation.


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

Let’s go startup something today.
___________________________________

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

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Category:general -- posted at: 6:00am CST

Justifying a Startup Valuation

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

Startup valuations differ from standard valuations in that they don’t solely rely on expected cash flows, book value, or other tangible aspects of the business.

Intangibles such as quality of the team, intellectual property, product status, and customers are the driving factors.

Most angel investors want 25% of the equity for an initial round of investment.

In addition, they want to have a say in the business through a board of directors or advisory role.

To justify your startup value, focus on articulating the values that are already in the business as follows:

Highlight the team you have built so far and their experience.

Show what the team is doing to make the company successful.

Show the current product development and highlight what has been done so far.

Outline the intellectual property you have, including provisional patents. 

Make sure you file your provisional patents in advance of launching a fundraise so you can point to having patent-pending technology.

Always note customers even if they are not yet paying for your product.  

If you do have some revenue use it to prove market validation showing customers will pay for it. 

Customer involvement will generate a higher valuation. 

If you cannot sell the proposed valuation for the raise, consider cutting the fundraise target in half.  

While the valuation will be the same, the risk will appear lower.



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

Let’s go startup something today.
___________________________________

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

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Category:general -- posted at: 6:00am CST

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