Startups Are Not Big Companies

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

Big companies are those who have found product-market fit and have encapsulated their repeatable and scalable business model into processes.

Big companies who want to achieve innovation will find that they are not startups.

Startup ideation creates new ideas that disrupt those existing processes.

New business models, products, and concepts often don’t fit into the big companies' current programs.

They have metrics and KPIs that track the current processes.

This is why it’s hard for big companies to innovate.

While big companies may want to innovate they rarely have the tools in place to do so.

The processes and programs for generating startup ideas are different from those that are optimized to execute on them at scale.

To launch a startup ideation process many companies create a separate group that can run under different metrics.

This group uses metrics that track startup ideas, investigations, market validation, and other steps.

They have a different incentive plan that fosters new idea creation, validation, and testing.

They often reside outside the firm’s location as the culture and mindset are also different.

If you are considering startup ideation at your work, keep these points in mind.

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

Let’s go startup something today.

_______________________________________________________

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What Is Ideation for Startups?

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

Ideation is a thought process that takes conceptual ideas into implementation.  

Founders launching a new startup go through the ideation process to generate the concept for the business.

Ideation comes from the current knowledge of the problem to be solved molded by principles and convictions. 

Ideation often comes from brainstorming sessions, social media posts, webinars, and others.

Ideation focuses on solving a problem by generating new approaches to find a solution.

To perform ideation consider the following:

Start with a problem to be solved.

Identify the key pain points the user faces.

Draw on the ideas of others to create potential solutions.

Consider inverting the problem so you can approach it from another perspective.

Consider making incremental changes to create a derivative solution.

Consider combining several small solutions to create a new solution.

Ideation draws from the work of other companies as well as the founder's experiences.

Ideation fosters innovation by reverse engineering a problem.

Consider the role of ideation in your startup.

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

Let’s go startup something today.

_______________________________________________________

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How to Use Ideation in a Startup

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

Ideation is a key stage in the startup process of developing a product or service.

Founders use it to question the obvious and come up with a new solution.

To pursue ideation in your startup, consider the following:

Generate many ideas whether they are workable or not.

Setup a place where no idea is a bad idea.

Ask the question, “How could we” to generate new possibilities.

Use analogies to draw ideas from other sources to apply to your situation.

Put yourself in the place of the customer and role play the customer’s experience.

Use brainstorming to generate new scenarios and outcomes.

Challenge the assumptions behind the current solutions.

Use mind-mapping by writing out keywords and visually connecting ideas around it into a diagram.

Capture the user personas and talk through the story of that user to find new solutions.

Finally, use the wish technique in which you ask what the user wishes for.

Capture all ideas into written form to share with the team and use for testing.

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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Criteria for a Good Idea

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

In ideating for a new product, there will be many ideas.

Up front consider all ideas and then qualify each one.

To judge the ideas consider the following:

Put yourself in the place of a customer and ask if you would buy that product.

Good ideas come from solving a customer's pain point.

Does it solve a real problem that customers will pay money for?

Consider what resources are needed to bring it to market.

Test out the business model behind the idea to see if it works.

It takes substantial time and work to bring an idea to fruition.  

Are you interested in working on that idea for a substantial amount of time?

Does the idea excite you?

In fact, do you have a passion for the idea?

Do you believe it is not just a solution but it is "the" solution

Narrow the list down to three and test out those ideas. 

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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Disrupt or Create

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

In ideating a new startup you can either disrupt an existing market or create a new one.  

In disrupting an existing market consider the following:

Move the transaction and delivery of the product online.

Online capabilities generate network effects.

One can create data sets and include fintech payments as part of the experience.

One can also create cost and time efficiencies by eliminating the middleman.

Disrupting an existing market requires a new mindset for serving the customer.

In starting a new market, consider the following:

Emerging technologies provide the opportunity to create a new market. 

Technologists and early adopters comprise the initial market. 

Since they are familiar with the technology they adopt it first. 

As the technology matures it will reach a wider audience which creates a new market.

Fast-growing technology segments provide an opportunity as well.  

As crypto takes off, it generates many new markets to serve.

Applying a new business model can create a new market as well. 

In ideating for your startup ask which approach is appropriate.

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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Signs of a Bad Startup Idea

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

In reviewing startup ideas for your business here is a list of signs pointing to bad ideas:

You know absolutely nothing about the market, product, or community.

While great startups come out of new domains, it’s helpful to have some experience with the space.

You spread yourself across too many ideas and don’t gain depth on any one of them.

It’s important to prioritize and go in-depth on one idea at a time.

You choose an idea for which you are not a good fit.

Look for ideas that match your skills and interests.

There’s no business to be had but only work to be done.

There are many socially conscious ideas but in the end, it must be run as a business with revenues and profits.

The idea is hard to explain.

You must be able to craft a story around it to sell it.

Your idea requires customers to change their behavior.

Changing behavior is hard. Your idea must generate a very high return to achieve behavior change as it will take substantial time.

You are mostly guessing about the market and customers and have not actually engaged with either.

It’s important to talk to customers and spend time in the market to understand how it really works.

Ask yourself how many of these apply to your startup idea and eliminate those from your list.

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

Let’s go startup something today.

_______________________________________________________

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Screening Startup Ideas

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

In reviewing startup ideas here is a list to screen them:

Are you excited about the idea or just okay with it?

You should have some sense of excitement about it.

Does anyone else think it’s a good idea?

It helps to have some validation from others, especially those on your team.

Can you find someone willing to pay for it?

While it may not be a full market test, it’s helpful to know that someone will pay for it.

Are you the right person for this idea?

There should be a fit with your skills and experience.

Is now the right time to pursue this idea?

Timing is important to startup success and should be at play here.

Ask yourself how many of these apply to your startup idea to see if you should pursue 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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Testing Your Ideas at Low Cost

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

It’s important to validate your startup ideas.

Here’s a list of low-cost methods to do so:

Search the web for competitive solutions.

Look at how they are positioned in the market relative to your idea.

Do any of those solutions have recurring revenue?

Research those competitors to learn more.

Build a landing page on your website and place your proposed product on it.

Drive traffic to the page using direct email and see how many signups you get. 

Check the search traffic to see how many keywords you can use and how much they cost.

Test your page with a few key search words to see what results it brings.

Promote the proposed product on social media.

See what feedback you get for it.

Try variations of the product, price, and promotion to see how that changes the results.

You don’t need a shipping product or even one in development to see how it will be perceived. 

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 Adam Spector, Co-founder, and COO of AbstractOps.

Located in San Francisco, CA, AbstractOps automates all the key aspects of running a startup. This includes covering the Human Resources (HR) function, documents & contracts, financial (such as payments, taxes, and accounting), and compliance/regulatory. AbstractOps combines everything into a single platform tied to the best 3rd party software platforms in the world (such as Gusto, Carta, Quickbooks, and more), which means that with a single click of a button, a user can now automate processes end-to-end that would otherwise take dozens of steps.

Adam Spector is a 3x founder, angel investor in a dozen unicorns, and a GP in a VC fund. 

Prior to his current company, he worked in product at Twitter with a focus on APIs. His prior startup, LiftIgniter, was a machine learning personalization company acquired by Maven. He also led sales & GTM activity at Datalogue, an ETL machine learning business acquired by Nike. 

He has focused his investing activities on game-changing startups with driven, dedicated founders. Some of his best investments to date include: BetterUp (executive coaching), Human Interest (401ks), Diamond Foundry (synthetic diamonds), Checkr (background checks), Zoox (self-driving cars), Relativity Space (3d printed rockets), PayJoy (loans), Ginkgo Bioworks, Jet.com, Blockfi, August Smart Lock, Certn, Boom Supersonic, On Deck, Equi, Placer.ai, Inversion Space, Attentive and many others.

With his team member, Adam is the General Partner of the Operator Fund, which invests in early-stage startups with a relationship to AbstractOps. 

Adam advises startups and investors and discusses the state of startup investing. 

Visit AbstractOps at www.linkedin.com/company/abstractops/about/; www.abstractops.com; twitter.com/abstractopsco.

Reach out to Adam at: www.linkedin.com/in/adamspector2/; ops@abstractops.com; adam@abstractops.com; twitter.com/aspec00.

_______________________________________________________

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

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The Acid Test of Startup Ideation

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

It’s easy to generate startup ideas.

It takes work to research and validate them.

Once you qualify an idea apply the acid test to it.

The acid test is can you set up a repeatable process for generating revenue with it.

Create a low-cost, simple version of the product you can use to test it.

Build a landing page on your website and then use a small amount of money to buy online ads and drive traffic to it.

Track the number of people who come to your page and how many clicks through to buy.

Track how much express interest in buying your product.

If you can provide a version of your solution at this stage fulfill the sale.

Communicate with the prospect to answer their questions and learn why they are buying your product.

This is a great way to learn how to improve the product.

Track the conversions to purchase.

Run this process again and see if you get the same results for traffic, click-throughs, and orders.

If you can show a repeatable, predictable process then you have the core of a working business.

You can test different price points and product positionings to improve it.

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

Let’s go startup something today.

_______________________________________________________

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

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Identify Your Startup Idea Advantages

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

In validating your startup idea look for these advantages:

Does your idea resonate with the potential buyer?

Your buyers should be excited about it when you tell them.

Is your idea perceived to be better than the competition?

Buyers should see the advantages right off the bat without too much explanation.

Is the idea easily understood and grasped by the buyer?

The idea should be clear to the buyer without confusion.

Does your idea give the buyer the opportunity to try it before buying it?

If the buyer can try it out first then this will be helpful in the marketing process.

Are the advantages of the idea clear to everyone?

Even non-users should see the advantages of it.

Does your idea have any defensibility against competition?

It helps to have some protection on the idea through intellectual property or trade secrets.

Note these advantages in testing your startup idea. 

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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Start With the Problem

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

Good startup ideas don’t come by looking for startup ideas.

They come when you find yourself saying “that’s interesting” as you notice someone trying to solve a problem.

To generate ideas for a startup, start with the problem to be solved.

Choose a problem you have so you avoid the mistake of building something no one wants.

Startup ideas are plentiful but ultimately you have to sell the solution to someone.

If you’re not solving a real problem, then it will be difficult.

Solutions to real problems attract people who are willing to pay.

To test your startup idea, ask the following:

1. What is the cost of this problem to a person in dollars?
2. What is the cost of this problem to that person in time spent?
3. How many people have this problem?
4. How many people who have this problem want to solve it right now vs later?

Focus on startup ideas that are must-haves.

Avoid ideas that are nice to have as they are hard to sell.

With practice, you can build the skill to identify good startup ideas.

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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Where to Focus Your Startup Ideas

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

In searching for startup ideas here are some key points to consider:

1. Start with a current solution to the problem you want to solve.
2. Don’t change everything but instead only change one or a few things.
3. Focus on one or two innovations such as the business model, the platform, or the market.
4. Look for changes in the technology landscape and ride that wave.
5. Find a new technology platform that is coming up and leverage it for your solution.
6. Look for startup ideas that are not universally shared. 

If everyone believes in that idea, then there will be too much competition early on.

In addition to solving today’s problem, look to solve tomorrow’s problem. 

As the market grows it’s clear which problems will increase and which will decrease.

Look for startup ideas that leverage your skills.

Target a market, technology, or resources you may have that give you a competitive advantage.

Consider the essential elements of your solution and focus on those.

The grand vision is never in place on the day you launch the product.

It will take several years to reach that final vision.

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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Questions to Test Your Startup Ideas

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

After startup ideation comes to the testing phase.

It’s important to test your startup idea with these questions:

How many people need your solution?

Is that enough people to make the business work?

Consider how many customers you need at your chosen price point to make the business model work.

Then estimate how large the market must be as only 1-3% of the customers will buy from you.

Can you access those customers easily and at a reasonable cost?

If it’s too expensive to acquire customers the business model may not work.

Is the problem painful enough that they are actively looking for a solution?

It helps if the customer is looking for you rather than you trying to find them.

Are customers willing to pay for it?

If so, how much will the majority pay?

Based on these questions you can eliminate many startup ideas and focus on the ones that work.

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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On this episode of Investor Connect, Hall welcomes Judah Taub, Managing Partner at Hetz Ventures.

Hetz Ventures was founded in 2018 and is headquartered in Tel Aviv with additional partners operating out of London.

Hetz Ventures is a leading Israeli seed-stage venture capital firm taking a thematic approach to early-stage investing. With nearly $300M under management, the fund invests in and supports startups in DevOps, Dev Tools & Open Source, AI/Data, Fintech, Cybersecurity, and other enterprise verticals.

Judah previously served as Head of Data at Lansdowne Partners (a $20B London-based Hedge Fund) as well as advising multiple young start-ups.

In his service in the Israel Defense Forces, Judah served as an officer in a classified intelligence unit where he engineered a large-scale project to win the IDF 2014 Creativity Award.

He has lectured widely, including throughout the IDF and at Wharton Business School, on time management and creative thinking and wrote a book for new IDF soldiers published by Yediot, Israel’s leading publisher. Judah was also elected as one of Forbes 30 Under 30 for 2020.

Judah advises startups and investors and discusses his investment thesis.

Visit Hetz Ventures at www.hetz.vc, on LinkedIn at www.linkedin.com/company/hetz-ventures, and on Twitter at www.twitter.com/HetzVentures. 

Reach out to Judah at jtaub@hetz.vc and on LinkedIn at www.linkedin.com/in/judah-taub-3773247b/. 

_______________________________________________________

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

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Tracking Your Startup Ideation Progress

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

It’s important to track your progress in startup ideation.

Metrics should be used from the very beginning to measure your progress.

Here are some steps to take:

Track the number of customers contacted and provided feedback.

Measure the number of customers who try out the product. 

Capture the amount of revenue each customer would pay for the product and calculate the average.

This sets a basic rate of customer interactions you can use to price your product and calculate revenue.

As you develop minimum viable products and launch beta programs continue to track the metrics. 

For marketplaces, track the number of buyers and sellers on the platform as well as the number of product listings with revenue per transaction.

After several product launches, you can establish a standard startup ideation program for your company.

This standard will inform how many customer calls must be made and how long the process will take.

This will reduce the cost and time overruns for the project and increase the accuracy of your pricing model early on.

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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Signs of a Great Startup Idea

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

In reviewing startup ideas for your business here is a list of signs pointing to good ones:

1. Growth -- there’s a growing market around it.
2. Broad-based -- a lot of people have the problem you are trying to solve.
3. Urgent -- people need to solve the problem immediately.
4. Mandatory -- the problem must be solved and cannot be ignored.
5. Frequent -- the problem comes up regularly and not just once in a while.
6. Budget -- the customer has enough funds to pay for the solution.
7. Authority -- your customer has the authority to buy the solution.
8. Experience -- you know well the problem and the market. 
9. Network effects -- you can build network effects into the solution and gain those advantages.
10. Switching costs -- the solution is sticky and difficult to move out of it.

Test your startup idea with these conditions to see how well it works.

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

Let’s go startup something today.

_______________________________________________________

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

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The False Pretenders

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

Emerging technology markets bring several challenges to the investor.

These markets are new and cutting edge but are also immature, unevenly distributed, and opaque.

In the early days, it’s not clear what the real winner will look like.

In many emerging markets, the false pretender precedes the winning solution.

In the 1990s, the Palm Pilot and the Newton were early versions of mobile technology.

They both met the form factor requirement, but the processing power, applications, and other factors fell far short of customer requirements.

Later the iPhone took over the market when it met those expectations.

In analyzing startups in emerging markets, look for the false pretenders to see what features they bring and what they don’t bring to the market.

Notice the key missing features.

Roadmap the path to providing those features.

For processing power, it’s clear how fast chips are progressing, so it’s not hard to estimate when the processing power will be available.

There’s some money to be made in funding the false pretenders.

It’s important to know where the startup is on the roadmap and how long it will take for the technologies to mature.


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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Portfolio Tracking

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

In running a VC fund, you’ll need to set up a system for portfolio management.

You’ll need to provide quarterly and annual reports to the Limited Partners, so it’s important to set up a system for tracking the investments.

Select a portfolio management tool that generates basic metrics such as IRR.

For VC funds you’ll also need Distributed to Paid-In capital (DPI), and Total Value to Paid-in Capital (TVPI) calculations. 

Your system should be able to track each investment with cost basis and current valuation.

Here are some key data elements to capture for each investment:

Date of investment

Amount of funds invested.

Pre and post-money valuations

For convertible notes, you’ll need to include the cap on your conversion price along with discounts and accumulated interest.

Include warrants and any other holdings the fund may have.

Setup a template to produce a report each quarter and annually.

Keeping the system up to date will make it easier to manage.

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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This is the TEN Capital AMA show. I'm Hall T. Martin, the host of the show in which we interview investors and founders on current topics. 

Our guest is:

Yohan Jacob of Retailbound

I hope you enjoy this episode.

_______________________________________________________

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

For Investors check out: https://tencapital.group/investor-landing/ 
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How to Find Startup Ideas

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

There are several ways to find startup ideas.

Here are three methods to consider for your ideation efforts:

Look to the future and ask yourself the following questions:

How are people changing?

What long-term problems do they have to deal with?

How have values shifted over time? 

How has technology changed?

What can we do now that we couldn’t do before?

Look to the current successful innovations and ask the following questions:

How can we improve on that innovation?

What can we do to make it easier, cheaper, and better?

How can we make it 10X better than it is now?

Solve problems you have encountered and ask the following questions:

What is your biggest pain point at work, home, or in a hobby?

How could it be solved better?

What would I pay for the solution I’m envisioning?

How many other people have this problem?

Use these methods to generate ideas for your startup.

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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
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Impact Investing Metrics

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

Many VC funds have impact investing as a part of the investment thesis.

Impact investing takes into account the social impact of the fund in addition to the financial return.

For impact investing, include metrics showing the impact of each investment.

There are several ways to measure impact.

For startups in well-defined areas, use the expected returns method, which determines if an investment meets threshold criteria.

For early-stage companies just starting, use the theory of change method, which estimates the social impact of those activities.

For startups in a well-defined sector use the mission alignment method, which measures operational activities and compares them to the industry standards.

For all other startups, use the experimental methods which calculate the results from each investment’s activities to determine the impact. 

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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How Startup Ideation Works

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

Startup ideation is a key step to building a successful company.

Here are the key steps to generate good startup ideas:

Surround yourself with people who have a feel for the trends and what’s coming next.

Look for disruptive innovations in technology.

Follow platforms and applications that are gaining wide adoption.

Ask yourself, ‘What can you do now that you couldn’t do a few years ago?’

This shows an ongoing trend you can project out into the future.

Look out ten years or more and ask, ‘What will the world look like then?

Work back from that vision of the future to how the world will reach that point. 

Ask, ‘What will be needed in that future vision that is not already invented?’

Look for opportunities that fit your skill set and experience.

Mock up an MVP and show it to lead users and early adopters for feedback.

It takes several years to build out a business model and brand so you must start early in building it.

Pursue several opportunities before choosing the one to pursue for the long haul.


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

Let’s go startup something today.

_______________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
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Key Performance Metrics

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

In running a fund, you’ll need to track key performance metrics.

Metrics should cover performance at all levels, including individual investments, the overall fund, and how it compares to other VC funds. 

Investors will want to see the numbers at all levels, including the following:

• Fund’s investment cost and current valuation.
• Total Value to Paid in Capital which is the value of the fund relative to what has been invested by the limited partners so far.
• Change in value, quarter over quarter and year to date.
• IRR numbers for investment exits.
• Residual Value to Paid-in Capital.

There are also metrics for the limited partners' funds, including the following:

• Capital committed, capital called, and the capital outstanding to be called.
• Fees paid.
• Limited partners’ percentage ownership.
• Limited partners' cost basis and current valuation.
• Change in value, quarter over quarter and year to date.
• Total cash returned to limited partners.

Finally, include benchmark metrics comparing your VC fund to similar funds.

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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Cost of Running a Fund

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

In running a VC fund, there will be costs to cover. 

Here’s a list of key costs to include in your pro forma:

1. Salaries for the partners and other employees.
2. Benefits for the partners and employees.
3. Office rent and related expenses such as utilities.
4. Legal and accounting costs.
5. Travel expenses for board meetings and events such as a CEO day.
6. Limited partner meetings, including travel and dinners.
7. Software tools such as a CRM.
8. Subscriptions to publications and associations.
9. Marketing expenses for lead generation and branding.
10. Additional expenses for deal flow and advisor work.

You’ll need to budget funds for running the business and track the expenses.


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

Let’s go startup something today.

_______________________________________________________

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

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

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.