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Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In negotiating a terms sheet, there are several key elements to keep in mind. Valuation is the biggest hurdle as it sets equity ownership.  Key terms that often come into play include the following: Liquidation […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. When I ask startups how much they are raising for investment, they often quote their total raise for the life of the startup. We then talk about breaking the raise into smaller rounds so the […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In determining your raise amount, consider what you need for the next 18-24 months and focus on that window rather than the entire life of the company. Raise enough to accomplish the goals for that […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. I often hear investors say if the company just had revenue then the risk would be gone. But once the startup achieves revenue, the next stage of risk comes up – will they be able […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Startups raising funding should keep track of their cap table which shows who has ownership in the business. If you have one, make sure to keep it up to date.   If you don’t have one, […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Depreciation represents the reduced value of assets. Each asset in your business has its own useful lifetime.   Based on that useful lifetime, one can expense a portion of the value each year over the life […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Your financial projections will be important for your fundraise. Banks will want to see your projections when you apply for a loan.  And investors will want to see them as well when you raise equity […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Operating expenses are the day to day expenses a business incurs. They support the operational side of the business covering sales, marketing, product development, and administration. These expenses include legal, digital marketing, payroll for employees, […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. For later-stage startups with revenue, one can use the financial projections to estimate the company’s valuation for fundraising purposes.  Discounted cash flows, called the DCF method, values the company based on future cash flow projections.  […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Your financial statements will generate a wealth of metrics on your business. Investors want to know these metrics – also called KPIs – which stands for Key Performance Indicators. You can use the metrics to […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In preparing your financial projections, you’ll need to account for investments into assets, also called capital expenditures. These include real estate, intellectual property, equipment, facilities, and buildings.  Assets also include computers, servers, and office equipment. […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Working capital is the capital you need to run the daily operations of the business and includes anything that can be converted to cash.   This includes cash, accounts receivables, and inventory.   Accounts payable reduces your […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. All businesses must pay taxes, including startups. Taxes include payroll and social security taxes which are based on the salary of employees and paid monthly. Even if your business is not yet profitable you still […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Any financing you have must also be accounted for in the financial statements.   You’ll need to set up a tab in your spreadsheet to capture the details of a loan, or other types of financing […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. For sales forecasting, begin with your current sales funnel and revenue history. The more you know about your sales process — lead generation, conversion, and time in funnel, the more accurate the forecast will be.  […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In setting up for your financial projections model, personnel is straightforward to forecast. Each employee has a salary, benefits, and payroll taxes.   Payroll taxes are a calculation off of the salary.  Commissions need to be […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Cost of Goods Sold, called COGS forecasting, represents the cost to build and deliver your product or service. This includes the cost to build the product or hours to deliver the service.  In most cases, […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Financial projections also called the pro forma, is a key document you’ll need for your fundraise.  Investors will want to see detailed, five-year financial projections as it shows you’ve thought through the financial side of […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. There are two approaches to financial forecasting for startups. The first is top-down forecasting. The second is bottom-up forecasting. Bottom-up forecasting uses the company’s historical data for cost and sales. It takes a micro view […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. There are two approaches to financial forecasting for startups. The first is top-down forecasting. Top down takes a macro perspective by using the overall market sizes and industry estimates for your type of business.  The […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. A financial model provides three outputs. Key financial statements, an operational cash-flow forecast, and key metrics for the business. Key financial statements include the profit and loss statement (called P&L), the balance sheet (BS), and […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The most important financial statement is the cash flow statement because cash is the most important financial metric for the business. If you run out of cash then you most likely will have to put […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. After completing the financial projections, you may want to create various scenarios of your financial model.  Startups are often optimistic, while investors are pessimistic. You may want to create a best-case scenario and a worst-case […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The elevator pitch is the short-form version of your presentation for investor opportunities that give you a limited amount of time. The key to an elevator pitch is not to talk faster, but rather to […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. After the pitch comes the investor discussion, in person or by conference call.  Research the investors in advance by looking them up on LinkedIn and their own company websites. In setting up a call or […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In developing the pitch deck, there are several mistakes I often see. One of the most common is trying to explain in great detail how the product or technology works. Instead, focus on the benefits […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the fifth slide is the monetization slide. It answers the question on how you make money.  Show the business model you are using such as recurring revenue, transaction fees, or other. […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the twelfth slide is the Investment Opportunity slide. This slide shows the fundraise target and how much is raised so far. Include interest and committed investors as well as invested funds […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the eleventh slide is the Financial slide. The Financial slide gives the current status of the company with respect to revenue, expenses and profit. You want to convey highlights such as […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the tenth slide is the Value Proposition slide. The Value Proposition slide shows what value your product/service brings to the customer.  It should answer the question, ‘what benefits does it offer’ […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the ninth slide is the Team slide. Show the C-level team, include the CEO, CTO, and CSO. Include a picture of each team member with their name and title. Show the […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the eighth slide is the Competitive Advantage slide. First, highlight your core value proposition for the customer. Show what value the customer receives from your product/service. A competitive advantage gives you […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the seventh slide is the Competition slide. The Competition slide often helps highlight the market size and strength by showing who else is playing in that space. In your slide, highlight […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the sixth slide is the Traction slide. For this slide, show current sales as well as the funnel of upcoming sales opportunities. Include forecast numbers for each opportunity. Show the pipeline […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the fourth slide is the Market slide. The Market slide shows the size of the opportunity. Show total available market, which is anyone you can sell to. Then show the serviceable […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the third slide is the Solution slide. For your solution, show a picture of the core product or technology so the investor gets a sense of it. Describe how you came […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck the second slide is the Problem slide. It’s important to start the pitch with the problem you are solving so the investor has a frame of reference for your startup. Show […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In your pitch deck, the first slide is the Title slide. It’s important as it’s the first slide the investor will see. It should convey the style and culture of the company. On the slide, […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. After funding, you need to keep your family and friends investors informed on the status of the startup. Consider the following: Be transparent about the results and share both bad news as well as good […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The goal of the pitch deck is to introduce your deal to an investor and find out what is essential to that investor. The goal is not to tell your full story or explain how […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising funds from family and friends, you could take it in the form of a gift.   Most family and friends want to help you out rather than make a return.   A gift is an […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In launching your startup you must consider your intellectual property strategy. Intellectual property or IP includes patents, trademarks, copyrights, and trade secrets.  You should trademark your company name. For your technology, you can either file […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising equity funding, you can only raise from investors who are accredited. The Securities and Exchange Commission (SEC) establishes the criteria for those who are accredited. You can see the specific requirements on the […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In launching your startup you must consider employment law.  You should check to see what contracts your prospective employee may have signed with a former employer around non-competes, non-solicitation agreements, and assignment of inventions.  A […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In launching your startup you must have a legal entity to raise funding. Start with an LLC or Limited Liability Company. This can be filed with your Secretary of State at your state government.  The […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. All startups need to have a legal entity. Before you launch your fundraise make sure you have a legal entity filed as you’ll need it for accepting investment funds.  Start with an LLC which is […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. If you want to raise venture capital funding, then check these points to see if you are venture fundable: Do you have the following: – Recurring revenue – Do you have recurring revenue in your […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Raising funding requires document and business preparation as well as pitching and extensive followup. Throughout the process there’s one thing you need to do before you can raise the funding.  You need to build a […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In fundraising, milestones are specific goals you have accomplished. In crafting your fundraise story, focus on key milestones both those you just hit and those you are striving for. This demonstrates you are making progress. […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others such as anchor clients. Anchor clients are those who prepay for a custom version of your product. They are typically […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others such as consultation funding. Consultation funding is using consultation work to pay the bills and salaries while you are building […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others. In general, equity funding is for launching and growing a business and is the most expensive form of funding.  Each […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others such as grants. Grants are typically provided by government organizations to spur research and make a small contribution to the […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others such as crowdfunding. There are several forms of crowdfunding such as crowdfunding with prepayment, crowdfunding from non-accredited investors, and crowdfunding […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Many startups use equity to fund their business.  Equity is an ownership stake in a company.  Equity aligns everyone’s interest in the startup. It preserves cash since it’s only paid upon the exit of the […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Another source of funding is supplier funding. Supplier funding comes from those who provide services to your company such as contract manufacturing, software development, legal, accounting services, and more. Suppliers provide their services in exchange […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others such as a line of credit. A line of credit is a short-term loan from the bank to help smooth […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Equity funding is just one source of funding for your startup. There are many others such as bootstrapping and barter. Bootstrapping is using your own funds and that of initial customers to launch your business.  […]