Start by Looking for Your First Investor, Not Your Lead Investor

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

In raising funding, some founders focus solely on finding their lead investor.

In most cases, it's better to find investors to join the round even if they are not leading.

By using convertible notes and SAFE notes, investors can join the raise.

Start with investors who are most likely to join and sign them up.

This shows traction with the fundraiser.

The investor who takes the lead will look for some evidence that other investors will join.

It's rare that the first investor is also the lead investor.

In most cases, the lead investor is the 5th, the 10th, or often the 25th investor the founder meets.

By picking up investors in the round, this often helps polish the pitch, fill out the data room, and prep the founder for a prospective lead investor.

It's easier to pick up investors on a convertible or SAFE note because the valuation is not set.

There's a valuation cap that protects the investor from outsized valuation by the founder.

Start your fundraise by looking for your first investor, not your lead 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.

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On this episode of Investor Connect, Hall welcomes Barry, who presents a medical device focused on improving treatment for hydrocephalus, a condition caused by excess fluid in the brain. Barry describes the current standard approach—ventricular-peritoneal shunts that drain fluid from the brain to the abdomen using a long rubber tube—and outlines key issues including infection, clogging, and siphoning that can over-drain the brain. He notes a 40% first-year reintervention rate, with roughly $1B in first-year reintervention costs and about $3B in annual overall health system costs, and explains that patients typically face a lifetime of revisions averaging about 10 surgeries. Barry explains their alternative approach, "physiologic shunting," which drains cerebrospinal fluid into part of the venous system and is placed entirely on the cranium, avoiding the long-tube failure points.

The procedure is described as a 15–30 minute implant that can be done under local anesthesia, requires no navigation/robotics, uses standard neurosurgical tools, and is designed for constant, self-regulating flow. He positions the device as a Class II de novo/510(k) pathway and says the team has had two FDA pre-submission meetings, is currently in sheep animal studies, and plans a GLP study later in the year to support an IDE for human use. Barry shares market context: the U.S. hydrocephalus shunt market is about $170M annually with around 100,000 surgeries per year, including about 70,000 revisions; worldwide the market is about $500M. He argues a more reliable device could rapidly capture the revision market and notes the current market is dominated by Medtronic and Integra. He also discusses an additional opportunity in normal pressure hydrocephalus (NPH) in patients over 65, stating there are about 700,000 diagnosed in the U.S. and only 1% receive shunts despite symptom improvement. Barry states the company has raised $2.5M to date and is seeking an additional $2.5M via convertible note to reach a first-in-human pilot targeted around 2025, with initial offshore pilots potentially in South America or Australia.

Barry is a medical device industry professional who presents a cranial implant designed to simplify hydrocephalus management and reduce revision surgeries. He emphasizes the device's ease of training for neurosurgeons, multiple cranial placement locations, and a "no bridges burned" approach where the implant can be removed and replaced through a small skin incision if needed. Barry describes a competitive landscape that includes one competitor pursuing an endovascular technique, while his team's approach is a surgical technique intended to be safer, simpler, and not dependent on specialized equipment. He also discusses manufacturing readiness, stating a supplier/contractor has been identified and that devices used in animal studies meet sterility and related standards. Barry discusses the shortcomings of current shunts, the company's physiologic shunting approach, the regulatory and study plan toward first-in-human use, the funding raise, and the market opportunity—especially capturing the large revision segment and potential expansion into normal pressure hydrocephalus.

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

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Track Interest, Committed, and Invested

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

In raising a round of funding, most founders focus on the invested funds so far.

When asked about the progress, the founder quotes the invested amount and the amount left in the raise.

This undersells the traction the founder has.

In addition to the invested, also track the interest and committed funds.

For each investor who has some interest, ask for their level of interest.

Add up all the interested investor amounts.

For those who are committed but not yet invested, add up those funds as well.

In discussing with prospective investors, quote the interest, commitment, and investment.

This shows additional interest from investors in the round.

A typical update would be, in our $1M raise, we have $600K invested, $250K committed, and interest at $800K.

It's often the case that the interest and committed funds are greater than the remaining amount in the raise.

This creates scarcity and generates FOMO with the investors who now see that there's not enough room to cover all potential investors.

Use this to help close the fundraising round.

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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Prioritize Investor Follow-Up

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

Startup founders raising funding will encounter a range of investors with varying levels of interest.

Founders should prioritize their follow-up and focus on the investors with the greatest likelihood of making an investment with the least amount of work.

A lead investor can be quite helpful but will require substantial time and effort on the part of the founder.

Budget time for the lead investor.

Close the easy ones first.

These are often angel investors with small checks who typically run a light diligence process.

They invest $25K to $50K on average.

After that come angel groups that have a process for vetting deals.

The application process can be heavy, but once it's done, the angel group process happens on a known timescale.

A typical angel group will invest $150K to $300K, if not more.

After that come microVCs, who typically write $150K checks on the first round.

Their diligence will be more substantial.

Finally, the standard venture capital fund will require a full diligence review with an initial investment of $500K.

Start with the easy ones and work your way up.

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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Investors Want Optionality

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

Investors follow many startups before investing.

They stall in making an investment to be certain it's a good one.

They look for additional information about the startup, its product, and market before making a final decision.

Investors want optionality.

They want to have as many options available as possible.

This gives them a better return on their investment.

Many investors drop out of a deal without telling the founder.

They want the option of coming back in if the deal turns out to gain traction or momentum later.

This leads many founders to chase investors who have basically said no to the deal.

Founders should ask for the investors' status on the deal.

Are you interested?

If so, how much are you considering investing?

Assuming an investor is interested without confirmation is a dangerous situation.

Once the investor decides on a deal to fund, they typically say no to other deals in the running.

Gain clarity with prospective investors about investing 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.

_________________________________________________________

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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One and Done Is Not Going To Work

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

In raising funding, the founder will need to follow up with the investor to close.

After the pitch, some founders send one email to follow up.

The one-and-done approach to follow up will not work.

It takes multiple follow-ups and outreach to close an investor.

The investor is searching for more evidence that the startup will be successful.

This could be information around the growth of the market, the productivity of the technology, or the strength of the team, to name a few.

Continue to give regular updates to the investor with a focus on traction and market adoption.

It takes seven touches to close a sale, so it takes seven touches to close an investor.

Budget time and resources for the follow-up effort.

Set up systems such as a CRM to provide updates to the investors following the deal.

Set up follow-up calls and meetings to showcase the results of the business.

It takes time to follow up, but that's where the results come in.

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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Fundraising Takes Time and Focus

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

Fundraising is a full-time job.

It takes time and focus to do it properly.

For some founders, it's a job within a job.

In running a fundraise campaign, the founder should consider it their full-time job.

Their startup duties should be handled by someone else for the time it takes to raise the round.

Some investors will come in more easily than others.

For those investors who want to be in the deal and are ready to join, have them sign the investment documents.

This is often done with a convertible note in which the valuation is not set.

Most investors will require time and attention to close.

The lead investor, in particular, will take time to negotiate the valuation and other deal terms.

Be sure to budget time and attention for the lead investor negotiation.

These often take up to two months to complete.

In engaging investors, identify the type of investor you are talking to and understand how much time it will take to close the investment.

Always continue the fundraising process till the 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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In this episode of Investor Connect, Hall Martin speaks with Nader Fathi, CEO of Enlil Technology, about the innovative strides his company is making in the MedTech industry. Based in Campbell, California, Enlil Technology emerged from the Shifa Fame Innovation Hub. Their AI-powered platform brings compliance, product lifecycle, and regulatory traceability into one unified system for medical device and digital health companies. Designed to reduce complexity and enhance operational efficiency, Enlil's platform streamlines processes from concept to commercialization, empowering MedTech companies to navigate FDA and other regulatory pathways efficiently.

Nader delves into the genesis of Enlil, explaining how it spun out from the internal needs of Shifa MedTech's portfolio companies. Initially developed to aid in internal compliance and process management, Enlil was commercialized in early 2022 and has rapidly gained traction, adding over 34 companies to its user base. The platform leverages a proprietary AI called Lilly, which aids in search functionalities, report generation, and even automates critical tasks such as FDA submissions, significantly accelerating product development timelines and reducing costs.

The conversation also highlights Enlil's go-to-market strategy, including their expansion efforts on the global stage. Despite focusing primarily on the U.S. market in 2022, Enlil has garnered international interest from countries like India, Singapore, and Japan. Nader emphasizes the necessity for startups to implement robust systems early to avoid scalability issues and successfully navigate the complex regulatory environment.

Reach out to at nader@enlil.com

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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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