The Four T’s of Startup Investing

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

There are many ways to evaluate a startup.

For investors funding SaaS startups, here are the four T’s to consider:

Team.

Does the team have the skills to build the proposed startup?

Are they in place, working on the business now?

Have they proven themselves yet?

Timing.

Is now the right time for the startup?

Is the market ready for this idea?

Traction

Does the startup have revenue growth?

Will the growth continue?

Technology.

Does the startup have the right technology for the market?

Can the technology scale?

Does it provide a moat for the business?

Use the four T’s to determine if the startup is ready for an investment.

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 Pitch in a Down Market

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

Down markets change the care abouts of the investor.

The investor wants to know whether the business will survive difficult times.

Here are some key points to consider when pitching your startup in a down market:

Focus on the core financials to show the business is stable.

Show how the company is cash flow positive or nearing it.

Talk about the break-even point and how soon your startup will reach it.

Show the burn rate is low and shrinking.

Highlight the path to profitability.

Show reasonable valuations and fundraising goals.

Focus on the core business and avoid extraneous products and markets.

Show the strength of the core team and the competitive product they are building.

Talk about how founders have launched and grown startups in down markets before.

Point out the market opportunities in the current down market.

Pitching the startup in an upmarket focuses on the potential growth.

Pitching in a down market focuses on the solidity of the business and its efficiency.

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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Prepping Your Website and Social Media for Fundraising

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

Before launching a fundraiser campaign, make sure your website and social media are prepped.

The first place an investor goes after hearing your pitch is your website.

They are primarily looking to learn more about the product and the team.

Pitch Decks are designed to pique interest and do not give the full story.

Interested investors will use your website to ‘fill in’ the gaps left by the pitch.

Make sure your website is up to date with your current business.

A website that is two steps behind will undersell your startup.

Consider adding an “Investor relations” button to your website to capture their questions.

Make sure the team’s profiles on LinkedIn are up to date, as that is the primary social media channel they will use.

Investors are looking to learn more about the team members and their experience.

They also want to see if the team members’ titles on the pitch deck and the titles listed on LinkedIn match.

Are you formally engaged with the company or are you tangentially connected to the startup?

Make sure your website and social media enhance and engage the investor during your fundraiser.

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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Startup Metrics in a Down Market

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

In an upmarket, startup metrics focus on growth rates, cost of customer acquisition, and scalability factors.

In a down market, the startup metrics focus on efficiency.

Here’s a list of key startup metrics to use in a down market:

Burn multiple.

This measures the startup's efficiency in growth.

It’s the net annual burn rate divided by the net new ARR.

Rule of 40.

This is another efficiency metric.

The growth rate and profitability added together should reach 40.

Customer payback period.

This calculates the number of months to pay back the cost of acquiring a customer.

It’s calculated by taking the cost of customer acquisition and dividing it by the monthly revenue from that customer.

Revenue per employee.

This measures productivity by showing how much growth can be sustained by the employees.

It’s calculated by taking the annual revenue for the company and dividing it by the number of employees.

These metrics shift the focus from raw growth to efficiency.

Consider these metrics 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/
For Startups check out: https://tencapital.group/company-landing/
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How To Tell When the Startup Doesn’t Have Anything

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

Startups raising funding should bring customer engagement, if not traction, to the pitch.

Founders raising funding often compensate for the lack of customer engagement through distractions.

Here’s how to tell when the startup doesn’t have anything:

Revenue is only listed as a forecast with pipeline sales.

Key metrics are based on forecast sales, not actual sales.

There are no actual customers in discussion, and no names of any partners.

The focus is on technology and how it works.

The product is a high-level vision of what will be, but nothing is under development.

The team has a handful of potentials but no actual results from their work.

The pitch is primarily how big the market is and the size of the opportunity.

The discussion focuses on how the competition is failing but never mentions how the startup is succeeding.

The deck shows huge returns to the investor, but there are no actual revenue figures listed.

In short, it’s all vision and no execution.

Look for these signs that the startup doesn’t have anything before pursuing investment.

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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In this episode of Investor Connect, Hall Martin engages with Joe Perino, a seasoned industrial strategist, consultant, and engineer with over four decades of experience. Joe shares insights on industrial transformation, emphasizing the importance of technology-enabled business model changes that yield significant improvements. He discusses the impact of predictive analytics and edge computing in the energy process and manufacturing sectors, highlighting their role in predictive maintenance and operational efficiency.

Joe also touches on the challenges of scaling AI applications, the necessity of robust cybersecurity measures, and the importance of interoperability standards in industrial tech. Additionally, Joe shares his experience with mentoring startups and the role of industry consortia and accelerators in fostering innovation and business growth. This episode provides a comprehensive overview of the industrial tech landscape, offering valuable advice for both operators and investors.

Reach out to at www.linkedin.com/in/joe-perino-952792/ or pertex@comcast.net

_________________________________________________________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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LP Investing Mistakes

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

Limited partners are referred to as LPs.

They invest in venture capital funds.

Just as angel investors make mistakes, so do LPs

Here’s a list of LP investing mistakes:

Not investing consistently.

It’s easy to invest when the market is up and difficult to do so when the market is down.

One of the best times to invest is after the market has dropped.

Investing based on track record alone.

While it’s a good reference point, the returns of a manager can be manipulated.

Treating a venture as an index fund.

While an index fund model can be applied to venture capital, it yields limited returns.

Focusing solely on fees.

The LP receives the return minus the fees.

In some cases, the return may justify the fees.

Ignoring portfolio structure.

LPs should build a diversified portfolio of funds and startups and avoid over-concentration in a sector.

Direct startup investment.

While there may be opportunities that come along, it’s very rare that solo investments will prove out.

Avoid these mistakes in your VC investments.

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

Let’s go startup something today.

_________________________________________________________

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

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

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

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Tips for the Startup Financial Pro Forma

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

Part of the fundraising documentation is the financial pro forma.

Investors want to know what the founder proposes will happen if they raise the target fundraising amount.

The financial pro forma shows this projection.

Here are some tips on building your startup financial pro forma.

The pro forma should be a bottom-up analysis, not a top-down.

This means each revenue and expense comes from history.

Use historical dates such as 2024, 2025, rather than year 1, year 2, etc.

This helps the investor understand what will happen and when.

For hires, include the full overhead that comes with each one.

For revenue, start with a realistic amount and then apply a growth rate to it.

This will give a steady ramp to the revenue and can be changed easily when the assumptions change.

Model the sales funnel in the pro forma by showing the cost to generate the lead, qualify it, set up a pilot, and close the sale.

Include churn as a part of the financial pro forma.

Build the pro forma with each month listed, but be able to roll it up into quarters for use in the pitch deck.

The investor understands the entire forecast is based on receiving funding, and that is a moving target.

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.

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