Benefits of Having a Co-Founder

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

Launching a startup is a challenging endeavor.

Having a co-founder can bring many benefits as follows:

Share the responsibility of launching and running the business.

One can hire administrative people and outsource functions, but there needs to be management over each of those areas.

Bring more skills to the business.

Two people bring more skills and experience than one.

Mitigate risk in the business.

Two people are better able to handle the risks than a solo founder.

Broader network

Building a business requires hiring team members, closing customers, and raising funding from investors.

Two people bring a broader network to these tasks.

Better decision-making

Two people can often make better decisions than a single person because they bring a greater range of perspectives.

Moral support

Two people can support each other better than a solo founder can.

Customer and project success

Two people can bring more resources to the project than a single person.

Consider these reasons for bringing on a co-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.

_________________________________________________________

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How To Generate the Herd Effect

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

In raising funding, the startup founder's job is to motivate the investor to engage in the deal.

Investors are often motivated by what they see other investors do.

This is called the herd effect.

This is when people copy what others are doing.

Here are some key tips on how to create the herd effect with your investors:

For investors who have influence or a network, offer them advisory shares to help recruit more investors.

The advisory shares incentivize the investor to promote the deal to other investors.

Use social media to showcase your investor updates and encourage existing investors to repost and like the mention.

Pitch investors in small groups rather than one-on-one.

Five is an ideal number.

Investors can see the interest from other investors, which generates FOMO.

This also helps build confidence in the investor that they are not alone and will have support from others if they invest.

Finally, calculate the interest and committed funds and share with the investors in regular updates.

This shows investor interest in the deal.

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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Avoid Giving Up Too Much Equity in the Early Stages

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

In the early stages of a company, fundraisers should focus on the minimum amount, not the maximum.

The valuation is low, and so the founders encounter greater dilution.

The majority of the fundraise should be done later when the valuation has increased.

Each round will cost the founder 25% of their equity.

Most use convertible notes.

Beware of using the convertible note as a credit card in which the founder keeps raising funds on it.

At the Series A level, venture capital will check to see if there's enough equity left for their investment.

The VC will also want to see enough equity left in the round for the founders.

If the founders have given up too much equity in the early stages, then investors will not fund the startup.

Founders should keep track of the equity they are giving up with convertible notes.

They should have at least 60% of the equity by the time they approach a Series A investor.

Consider these points in negotiating early-stage rounds of 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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On this episode of Investor Connect, Hall welcomes Dave Sanders, angel investor and Membership Chair at SAC Angels. Located in El Dorado Hills, California, Sac Angels is a long-running Sacramento-based angel group that's been investing in high-potential early-stage startups since the late 1990s, with about 70 members completing roughly 15–20 transactions a year. The group focuses primarily on broad-based technology (about 70–80%) across the western US while remaining open to opportunities nationwide, and it supports founders not only with capital but also with mentorship, connections, and experienced operator guidance through the early, messy stages of growth.

Dave shares how Sac Angels typically invests at the seed stage (with some Series A), with common check sizes of $100K–$250K and rounds often raising $750K–$2.5M. He explains how their multi-class LLC structure allows them to write one check to keep the cap table clean and encourages more participation from members, and he notes SAC Angels' collaborative approach with other groups and accelerators, including Berkeley SkyDeck and the 14-group NSYNC Angels network. Dave also highlights their ability to move quickly on strong, led deals—sometimes writing checks in under 30 days, and in one case in three days. Dave is an active angel investor who helps source, evaluate, and co-invest in seed-stage companies through SAC Angels. He also serves as a GP in a micro fund and has invested across dozens of companies, sharing lessons learned about portfolio construction and the importance of diversification in an asset class where outcomes are hard to predict.

With deep experience working with founders, Dave spends significant time coaching and mentoring companies post-investment, using his network to open doors and make strategic connections. He emphasizes that successful companies often differentiate early through strong teams, clean deal terms, crisp storytelling, and the ability to raise follow-on capital—since many startups ultimately succeed or fail based on continued access to funding. Dave discusses what SAC Angels looks for in founders, themes they find compelling today, including AI applied to targeted workflows and health tech, and how syndication and relationships drive access to quality deals. He also shares advice for founders raising their first round—question whether venture is the right path, stay lean, and show real traction—and for new angels to join a group, build a diversified portfolio of 15–20 investments over four to five years, and target disciplined, portfolio-based returns.

Visit SAC Angels at sacangels.com/

Reach out to at www.linkedin.com/company/sacramento-angels/

________________________________________________________________________

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

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There Are Many Scenarios in Fundraising

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

In fundraising, there are many scenarios and strategies a founder can use.

Here are several factors that impact which strategy to use:

The current market for funding.

In up markets, one can raise more funding and at a faster pace.

The strength of the startup.

Startups with traction and a great team can command greater fundraises.

The target growth rate of the company.

The higher the growth, the greater the fundraising goal.

The type of investor sought.

There are angels, venture capitalists, and family offices to consider.

Angels can be easier funding to acquire.

VCs can invest greater amounts of money.

Family offices can be patient money.

Throughout the campaign, consider which strategy and scenario to use at each stage.

In pitching, be sure not to play out all the options to an investor, as this will be confusing.

Choose a scenario and play it out with the investor.

Consider these points in choosing the strategy and scenario of your 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

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It's Not Closed Till Money Is in the Bank

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

Founders seeking funding will hear yes from an investor.

Many founders consider the funding to be done.

Founders should move to close the funding and not rest until the funds have been transferred.

Many funding commitments never materialize.

Issues come up in diligence.

The investor has cash flow issues or unexpected expenses.

Bad news from the financial markets shakes the investor's confidence.

To close the funding, set up a timeline with the investor.

Baby step in the process to get the documents signed, the diligence done, and the funds transferred.

Remove areas of friction, such as docu-signing the investment documents.

Diligence is a key area to watch out for, as new information will come to light.

This will have the most impact on an investor's decision.

Finally, keep the fundraise going.

It's not closed till money is in the bank.

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 Handle Pushback on Valuation

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

In fundraising, the founder encounters a variety of investors.

Some are concerned about the return, some about the traction, and others about the valuation.

For those focused on valuation, here are some key steps to consider:

First, check their knowledge of current market valuations.

Ask what valuations they've seen on recent fundraises and exits that match your company.

Next, identify what they consider the most important factors that drive valuation.

This could be revenue, growth rates, team, or other.

Finally, ask what valuation they would ascribe to your deal.

The goal is to delay the negotiation process and gather as much information as possible.

Investors see many deals and have information that most founders do not.

Consider how their information informs your valuation.

Once you decide on a valuation, stick with it and approach investors who are not as concerned with it.

Raise a meaningful amount of funding for the deal.

Find comps that support your valuation.

Only then do you engage the original investors, but now there's evidence that other investors are in the deal.

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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Think Minimum Raise, Not Maximum Raise

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

Most startup founders calculate how much funding they need to accomplish the goal.

This is a good initial step in the fundraising process.

The mistake is then asking for that amount of money in one go.

It's important to break the raise down into steps and stages.

The first round of fundraising should be the minimum needed to reach a milestone.

Not a maximum to reach the end goal.

The startup's valuation is low in the early stages, so the fundraise should be at a minimum, so the founders don't suffer too much dilution.

For a minimum fundraise the founder should consider what is the minimum team focused on a minimum viable product to achieve initial traction.

As the startup generates more products, revenue, and traction, it can raise its valuation and take larger amounts of funding.

This will reduce dilution and make the job of building and selling the product easier.

Consider what your minimum raise should be and what you can do with 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/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
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