Early Stage Traction

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

In the very early stage of the life of a company, traction can be more than just revenue growth

Here are some key traction points to look for.

The founder has an idea.

The founder has an idea and a pitch deck.

The founder has an idea, a pitch deck, and an MVP or minimum viable product

The founder has an idea, a pitch deck, an MVP, and a customer.

The founder has an idea, a pitch deck, an MVP, and a customer with revenue.

The founder has an idea, a pitch deck, an MVP, and a customer with revenue that is growing.

The founder has an idea, a pitch deck, an MVP, a customer with revenue that is growing, and a repeatable process for signing up customers.

By breaking the early stage into phases, one can better understand if the startup is making progress.

Startup investors look for signs of traction and momentum in the deal before investing.

Consider this more nuanced version of traction in assessing very early-stage startups.

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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Why Now?

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

In raising funding, it’s important to instill a sense of urgency in the fundraiser.

One of the key elements is describing why now is the right time for this fundraiser.

Follow these steps to show how everything is aligned for success:

The team is experienced and in place.

The product is ready and has been validated.

The market is ripe for disruption.

The window of opportunity has been opened by a recent event.

An inflection point now gives the startup an advantage over the competition.

Show how all the elements have lined up to make this a successful endeavor.

It’s important to show the why now, as investors may assume that the startup can raise funding at any time.

Make it clear, now is the time to pursue this opportunity.

The chance of success is at its greatest.

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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Build Your Presence With a VC Fund

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

In raising funding from a VC fund, it’s important to understand the partner team.

Each VC fund has a number of senior partners, junior partners, and others such as analysts and scouts.

One of the partners will bring the founder to a weekly group meeting of the team to hear pitches from the founders.

The partner bringing in the founder is the advocate.

The founder pitches to the team.

The team discusses and decides to pursue or pass.

This process can play out over several weeks.

The advocate’s job is to convince the team that they should pursue the startup.

The founder’s job is to arm the advocate with updates and information to help close the team members.

Each team member has their own list of founders they want the fund to support.

The advocate must bring compelling information and overcome objections from others.

In raising from a VC fund, provide your advocate with enough ammunition to build your presence within the VC fund.

It’s helpful to know more about the team and their careabouts.

It’s a must to always go through your advocate.

Consider these points when raising funds from a VC fund.

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 To Say No to a Startup

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

Investors receive pitches from startups almost every day.

Many of these startups simply don’t match the investment thesis of the investor.

Here’s how to say no to a startup.

Respond with the same level of effort that the founder put into the outreach.

For an automated email, simply don’t respond.

For a personalized email outreach, respond with a message “thank you for your outreach, this doesn’t fit our investment thesis. We look for” and explain your target area.

For a warm introduction, respond with what you like about the deal, but admit this doesn’t appear to be a fit.

It’s often the case that the founder will come back with more information.

In this case, respond with feedback on how to make the deal more interesting.

If the deal is missing key information, then advise the founder to include those key points.

This provides value to the interaction between the investor and the founder.

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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Don’t Play the Scenario Game in the Pitch

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

Founders are confronted with many options for their fundraising.

If they raise more, they can achieve more milestones.

If they raise less, they can achieve fewer milestones.

Some founders play out these scenarios in the pitch to investors.

This is a mistake.

Multiple scenarios of varying amounts of funding with differing outcomes only confuse the investor.

Investors often try to figure out what the startup is doing.

Adding complexity with several fundraising options only makes the process harder.

It’s best to choose a fundraising amount and decide what can be done with it.

Present this to the investor.

If multiple investors indicate this is not the best path forward, then consider changing it.

It’s okay to have multiple versions of the pitch, each geared to a different investor type.

Choose the appropriate version of the deck for the one you are pitching.

Avoid the multiple-scenario game in the pitch.

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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In this episode of Investor Connect, Hall T. Martin talks with Mike Sloan, CEO and founder of Simple Labs, about their groundbreaking product, Cogni. Mike shares insights from his background in both bourbon and wine country, emphasizing the industry's challenges such as significant losses from evaporation and spoilage. Cogni offers a comprehensive barrel monitoring solution, leveraging real-time data to optimize quality, efficiency, and profitability. The discussion spans their impressive ROI, their expansion plans across various spirit and wine markets, and their substantial growth potential, backed by existing patents and no direct competition. Mike also highlights their successful beta testing with major brands and raises the company's anticipated Series A funding to accelerate growth.

Following Mike's presentation, Hall introduces Andrew Dahl from Biomes, who presents their end-to-end technology for diagnostics that captures raw patient samples and delivers lab-quality results with ease. Andrew emphasizes the uniqueness of their platform, which converts existing FDA-approved lab tests to point-of-need or at-home use, making sophisticated diagnostic tests accessible anywhere. The discussion includes their first-to-market canine Alzheimer's urine test in partnership with Hill's Science Diet, the team's extensive expertise, and their strategic business model targeting global brands for further growth. Together, Mike and Andrew showcase how innovative technology can revolutionize traditional industries, providing efficient, real-time solutions to long-standing challenges. They both illustrate the importance of having a strong, knowledgeable team and the strategic partnerships necessary for scaling and achieving success in the competitive market landscape.

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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Raising a Series B Round

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

In raising a seed or Series A round, the story carries the fundraising pitch.

Investors in those rounds are looking at a seven to ten-year trek to the exit.

In Series B, the time to exit is much shorter.

The fundraising pitch here focuses on the numbers.

The Series B deck shows the repeatable, predictable process that generates money.

Investors expect all the systems to be up and running and the bugs to be worked out.

This means putting a process on every program and a funnel on every output.

The Series B fundraise goes faster than the seed.

The investor’s focus shifts from the pitch deck to the data room.

Make sure your data room contains all the relevant information about the deal.

View your data to predict what questions the investor will ask.

Key questions from the investor focus on growth capacity.

Without any more funding, how far can you go with revenue growth?

What will be the limiting factor?

How far will each fundraising dollar take you?

The pitch deck for seed and Series A shows how you will sell the product.

The Series B deck shows how you will scale it by highlighting the drivers behind cost and revenue.

Consider these points for your Series B 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/
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European Waterfall Model

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

Venture capital funds use different payback structures.

Each varies the structure for how the Limited Partners receive their returns.

The European waterfall model does not pay back the carried interest to the general partners until the limited partners have received all their capital and return.

The American waterfall model pays the general partners on a deal-by-deal basis.

This spreads the risk over several deals and throughout the life of the fund.

The American model works at the deal level.

The European model works at the fund level.

The American model gives equal precedence to the managers and the investors.

The European model gives precedence to the investors.

Other factors to consider include the carry rate and the management fee.

In raising funds, consider the payback structure 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

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.