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Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Returns on a Fund are based on the power law which means that the Pareto Principle applies: The bulk of returns come from just a few of the companies. Out of ten investments, one […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In running a fund it’s important to analyze market segments. First, evaluate the leading companies in the market. Are there any leaders that stand out, or are all the companies competing head-to-head with the same […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Fund managers must present their investment ideas to the other general partners.  Here’s how to analyze a potential company for investment: 1) Identify a recent event for the target company, such as entering a new […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. There are 3 key legal documents for your fund. They are: 1) Subscription Agreement — describes how the limited partners purchase interest in a fund, or rather, subscribe to it. It contains representations and warranties. […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. There are three key metrics for tracking the performance of a Fund. The first is Net Internal Rate of Return (called Net IRR) — this measures the performance of fund distributions and the change in […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. For those raising a fund, you must develop an investment thesis for your fund or investing strategy. An investment thesis is a hypothesis that describes how a particular market is suitable for producing a positive […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising a fund you’ll need an executive summary which should include the following: Fund Objectives, (Legal) Structure, Fund Specifics, Investment Strategy, Investment Criteria, Investment Process Overview, Management Team and Disclaimers. Fund Objective — purpose […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. One of the key selling points for a startup is their potential market size. There are several ways to find it for your startup. You could buy a market research report. These typically run anywhere […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. You can now start your own VC fund. Venture capital, angel investing, crowdfunding, and most forms of startup funding are best done through a fund model for when deal flow volume reaches scale.    A fund […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. As a startup, it’s helpful to understand the VC investor you are talking to and how they make money. In venture capital, there’s two ways to make money. First, VCs typically take one third of […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In calculating returns the timing of the return is a key factor. There are two metrics for measuring return. ROI is return on investment without respect to time, and IRR which is Internal Rate of […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In angel investing the two basic approaches are generalist and specialist.  The generalist funds across all sectors but with certain criteria focused on growth rates, team composition, or monetization models such as recurring revenue. The […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. You’ll need to gather your basic company documents for investors to review. In preparing a due diligence box also called a dataroom, there are basic documents to include: Income Statement and Balance Sheet Three to […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Many people want to work for a VC, especially those straight out of college. Most are not aware of the challenging dynamics that come with the VC life.  Here are a few: Raising funding — […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. I once read a sixty-five page business plan that talked about the startup’s services and the benefits that came from it. After reading it, I met with the CEO and said, “This is great. What […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In diligencing a startup, the team is the most critical factor in the process.  Since the startup has only a nascent product and perhaps some intellectual property, the team is the only thing that you […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In due diligence you may encounter red flags indicating something is wrong. Here are some that I’ve found: The founders are not investing any of their own money into the business.   The cap table is […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In due diligence, what isn’t being said or shared is as important as what is. When a startup pitches their idea, you should be skeptical of founders that don’t mention potential risks or discuss their […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. So many entrepreneurs think the most important moment in the investor engagement is the pitch.   In fact, the pitch is the second most important.  The most important moment is the follow-up after the pitch. The […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising funding you will hear “no” from investors a lot.   When I say a lot, I mean it’s more than most entrepreneurs think. I know one entrepreneur who made 50 investor pitches before he […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In running a fundraise campaign you’ll need to set up calls and meetings with investors who are busy and may struggle to find time to give you. Of course you can have a mutual contact […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. So how do VCs make a decision to invest? Venture Capital investors make investment decisions as a group. As an associate, partner, or otherwise, you must convince the team to move forward with it.   Even […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In pitching you can position your startup in more than one way.  You could pitch for the sector it is in — such as Edtech. Many investors focus on a sector. In this case you […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. So, how do investors decide to commit to a startup investment? Entrepreneurs look at the opportunity in the deal. Investors look at the risk. There are two factors that help the investor decide to invest […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. At each stage of funding, investors bring not only funding, but also some level of support.  From crowdfunding you receive not only the investment (or prepayment, if you are running a rewards campaign), but you […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising funding, start with your own network. Set up calls with angels, family offices, and others who you already know. Since the relationship is already built, it’s much easier to set up the meeting. […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. There are many sources of capital.   There are family and friend loans. There are bank loans. There are revenue share loans. There are equity investments in the form of convertible notes and equity ownership. There […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In the Coronavirus lockdown, we’re seeing trends that will establish the next cycle of startup innovation. We’ll see the government shift to building out the infrastructure and response programs for healthcare and public safety initiatives, […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In the Coronavirus lockdown we’re seeing trends that will establish the next cycle of startup innovation. While already underway, there’s an accelerating shift to digital.   Startups in this area will find investor interest if they […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In evaluating a team, there are elements to look for in a CEO for early-stage companies. The first is character. The CEO must have integrity and demonstrate character. Over time, the company will adopt the […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Vince Lombardi once said, “Winning isn’t everything, it’s the only thing”. In startup investing, “Team isn’t everything, it’s the only thing”. All problems will ultimately be solved by the team. If the team can’t solve […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. After the COVID-19 pandemic of 2020, investors look to see if you have made your business COVID-19-proof. Here are some steps to COVID-19-proof your startup. Ensure your startup can continue day-to-day operations by working remotely, […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The prospective investor wants to see traction in your fundraise just as they want to see traction in your core business.  In raising funding, investors will first express interest and then make a commitment before […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus pandemic impacts what venture capital funds. We’ll see changes in the following ways: Goods and services deemed ‘essential’ will receive funding such as cannabis, CBD, and hemp.  Alcohol will see increased funding as […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising funding, you need to build a relationship with the investor and communicate your story.  Both take time.  It’s a numbers game. You have to put yourself in places to meet people. Once you’ve […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Most investors look for startups in which they can find a return on their investment. In the diligence and funding process, what the investor really wants is to not lose all their money. They want […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus pandemic impacts many parts of the economy including logistics and supply chain. We’ll see changes in the following ways: The need for flexible manufacturing come to the forefront in the Coronavirus pandemic in […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In pitching your business plan, consider using the story format. Start with the problem you faced. Show how you couldn’t find a solution so you created your own. And now others are coming to you […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus pandemic impacts many parts of the economy including education. We’ll see changes in the following ways: Education has been moving online for the last twenty years. With online courseware, virtual classroom tools and […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. There are several approaches to Due Diligence. The most common is the “Thorough Approach” in which you review each aspect of the business and focus on the top items. Main areas to cover in due […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus pandemic impacts many parts of the economy including work. We’ll see changes in the following ways: Increased usage of remote-work software tools. Video conferencing, shared drives, Slack, and other tools make virtual work […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Investors look for some protection over the idea. Patents and trade secrets can help. Half the value of a patent is for show, to investors. In practice, it’s difficult to use patents as the sole […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus pandemic impacts many parts of the economy including healthcare. For healthcare startups, we’ll see changes in the following ways: Increased use of telemedicine. The pandemic highlights the challenge of centralizing all healthcare functions […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. I’m often asked what venture capital looks for.  VCs look for emerging tech markets with strong growth projections. These sectors include blockchain, AI, Data Analytics, and other strong growth areas. They do this partly because […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Today’s question is from Markeyla Markeyla asked: I would love some direction about creating relationships in the VC world. Although I have been accepted into an accelerator, I don’t have many connections in the VC […]

Hello, this is Hall T. Martin with the Startup Espresso — your daily shot of startup funding and investing. Today, we’ll talk about how to achieve an exit in a startup investment. It’s easy to get into a startup investment, but difficult to get out — especially with a positive return. Most startup exits come […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus economy is accelerating changes already underway. Content and engagement is moving online. This impacts healthcare and education in particular, as well as general business. As a startup, you need to recognize this acceleration […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus has sent the stock market into a wild ride of 1000-point swings every day. In talking with investors, I find the following: Early-stage investors continue to move forward with their investment plans.  Later-stage […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. While the Coronavirus brings a lockdown in the movement of people, it doesn’t point to an altered future, but rather an accelerated one. The Coronavirus will accelerate changes in the economy that are underway. We […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The Coronavirus has taken an historic 10-year bull market and turned it into a bear market. With comparisons to 9/11, the 2008 financial meltdown, and the Great Depression, startups and investors are adjusting to a […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. In raising funding, investors want to know what progress the company is making.  After the initial presentation, the investor wants to hear about progress in four areas: Sales, team, product, and the fundraise. For Sales […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. Most startups focus on the product first and treat the customer as an after-thought.  The investor knows that in the long run customer revenue will make or break your business — not the product.  In […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. To pitch your deal you must first start with a prospect list of investors. Include your contacts who are angels, family offices, and VCs. Canvas your network for those who know angels, family offices, and […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The investor will look closely at the team in your startup. In particular, they will look for skills and completeness.  Your team must have the skills you need to accomplish the work and you’re not […]

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The sign of a quality pitch is the simplicity in the message. One test is, can you say your business in five words or less? You should know your business well enough that you can […]