Founders Who Got Lucky

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

Some founders get lucky and achieve a successful exit of their business.

They were in the right place at the right time with the right solution.

Investors should be wary of founders who got lucky.

Their luck may have come early in the life of the startup.

It's often the case that they haven't built the skills necessary to launch and grow a startup.

Successful founders typically have several years of experience, but an early exit may have cut this short.

When those who got lucky start their second business, they assume the conditions will be the same.

They assume they will have a great product, and traction will come easily.

But the conditions that played out on the first startup will rarely be there for the second one.

The challenges of a startup are what make the founder.

The hard times become the lessons that they take with them throughout life.

If they skipped the hard times, then chances are they don't have the skills needed to take a startup through to an exit.

As an investor, be wary of founders who got lucky.

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

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Your First Round Should Have an Investor-Friendly Valuation

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

In raising funding, the first round is always the hardest.

Here's why it's so difficult:

There's often no product or revenue to prove traction.

The team, in most cases, is unproven.

The market is not yet well defined.

The ideal target customer has not yet been identified.

How the business will make money is not yet known.

The founder is inexperienced, as this is often their first rodeo.

The first round of funding should have an investor-friendly valuation.

Use family and friends' funding to raise at least half of the round.

Show investors how funds have already been raised.

It's a positive that family and friends believe enough in you to invest.

Invest your own money and show prospective investors that you are committed.

Show how the valuation will go up in the next round when you have more values in business.

Make the first round small so as not to incur too much dilution.

With so few values in the business, most investors will not pay 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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
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Mitigate the Risks

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

In a pitch, founders focus on the opportunity while the investors focus on the risk.

Founders who raise funding have successfully shown how they mitigate those risks.

Here are some key risks to mitigate:

Team risks -- show how the team works well together.

Cite a substantial project the team has already taken on and successfully completed.

Product risks -- show how the product works, and customers will pay for it.

Show the revenue from the product and how customers are happy with it.

Technical risks -- show how you have already solved the technical issues.

Describe the technical solution and the benefits that come from it.

Launch risks -- show how you have already solved the launch challenge.

This can be done by showcasing the results of the launch of the product.

Market risks -- show how the market exists and will engage your product.

Describe the market, including size, structure, and careabouts and list each segment you have already sold into.

Revenue risks -- show how the revenue will be sufficient to cover the costs of doing business.

Use unit economics to show how the product, which is already selling, is profitable.

The more risks you mitigate, the easier it is to raise funding.

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

Let's go startup something today.

_______________________________________________________

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

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For Investors check out: https://tencapital.group/investor-landing/
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Keys to a Successful Preseed Fundraise

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

Raising pre-seed funding is one of the bigger challenges in startup fundraising.

This round comes at the idea stage, so there are no metrics around traction or product-market fit.

Here are the keys to a successful pre-seed round.

The current team must have strong experience in the domain and a track record of growing and exiting startups.

The team must have a unique insight into solving the problem in the industry.

This will become the company's competitive advantage.

The insight must be compelling enough to create a business that can generate more revenue or run the business at a substantially lower cost.

The team must know the industry segment well and have enough connections to find customers, partners, and providers.

In pre-seed funding, the team becomes the proxy by which the investor will judge the startup, as all values of the business will come from the initial group.

Consider this in setting up your pre-seed 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/
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In this episode of Investor Connect, we hear a pitch from Aether on addressing the global opioid epidemic with ATX-1209, a neuromodulator designed to modulate the mu-opioid receptor by suppressing dependence signals while preserving analgesic benefit when used alongside opioids, with additional development plans for opioid use disorder and neonatal opioid withdrawal syndrome (NOWS).

The team cites completed human safety work, clean toxicology, and consistent animal data across species, along with validation from neuroscientist Dr. Phil Skolnick, and outlines a stage-gated, capital-efficient plan to run two clinical studies in Australia over roughly 2.5 years for about $10M to reach a key value inflection point.

Ethair is raising $10M on a convertible note at a $13.3M pre-money valuation (with a lead investor already in for $4.5M on a $9M note), targeting an early exit if Phase 2A data shows reduced dependence scores with no loss of analgesia, or alternatively pursuing a pediatric orphan NOWS registrational study tied to a potential PRV voucher.

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

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How To Choose a Vertical SaaS Niche

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

Vertical SaaS is a known business model that narrows the focus to a single application.

This reduces the cost of capital to raise and gives the startup the opportunity to go deep on an application.

Here's how to choose a vertical SaaS niche.

Look for industry segments that are highly fragmented.

It works well where market share is not concentrated.

Find niches where technology can improve the efficiency of the business.

Combining these two factors, one looks for a highly fragmented market that is currently inefficient.

The market segment needs to be able to spend on tech efficiency.

There needs to be enough money to implement SaaS systems.

In prioritizing highly fragmented markets with low current efficiency, one looks to find the largest submarkets.

The vertical must be big enough to produce a profitable business.

Applying this methodology to each NAIS industry segment category provides a prioritized list of markets to apply vertical SaaS to.

Consider these steps in selecting a niche for a vertical SaaS play.

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

Let's go startup something today.

_________________________________________________________

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 Not To Follow Up With an Investor

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

Founders raising funding should consider their approach to following up with an investor.

Here's a list of ways not to do it:

Have an admin send out the email follow-ups.

At this stage, the founder should be building a relationship with the investor and should send all correspondence.

Sending a formal email.

The founder should make the email warm and friendly.

Passing a new entrepreneur to the investor.

It's best to focus on your own deal at this stage.

Introducing others may come later.

Fill the email with buzzwords and cliches.

The email should be informative and not a brochure website.

Jumping straight to the ask in the first sentence.

It's best to set the context of the email, such as new information about customers.

Skipping the updates about the business.

Never send an email without some new information about the startup.

It's best to continually inform and educate the investor.

Consider these steps when following up with an investor.

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

Let's go startup something today.

_________________________________________________________

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

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
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Investor Questions and What They Mean

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

Founders pitching investors can learn a great deal about an investor by the questions they ask.

Investors apply the founders' pitch to their investment thesis.

They work through the pitch to see how it does or does not fit.

For example, questions focused on the financials show the investor makes decisions based on the numbers.

Questions focused on the team show the investor makes decisions based on the skills of the founder.

After assessing the interest of the investor, the founder can position the deal as a good fit by focusing on the investor's area of interest.

For investors focused on financials, the founder can showcase the other numbers in the deal that are relevant, such as growth rate, gross margins, and the time to break even.

For investors focused on the team, the founder can discuss further the experience and skills of the team.

Consider the interests of the investor and reposition the discussion to focus on that area.

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

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