After fundraising comes building the team. The core team may already be in place, but growth will demand new hires. Here are some key points in hiring the team for your startup: Have your high-performing team members interview new candidates. The high performers tend to hold others to their standard….

Venture capital is a job that many aspire to hold. It’s challenging, but it provides great experiences. For those who want to become a venture capitalist, there are several paths. Start by working in a startup in a sales role. Some of the most effective VCs are those who have…

Investors look for large target markets that are growing well. Founders looking to launch a startup often look for huge problems to solve. Since startups are limited in their resources, they must find a way to solve a large problem with few people and products. One solution to this problem…

Investors looking for startup investments need to screen deals efficiently. Here’s a set of criteria to apply to startups before pursuing diligence. Check the team. Do they know what they are doing? Do they have the skills to achieve the goal? Do they have passion and grit? Check the business….

In the early days of a startup, the founder seeks to build and sell a product. In the later days, the founder seeks to scale the business. Here are several ways to scale a startup: Raise funding to fuel the scaling strategy. This could be a substantial amount of funding…

Press releases can help the startup gain exposure in the marketplace. This helps recruit employees, find customers, and attract investors. Founders can do this upon closing a round of funding. Here are the steps to write a press release for your startup: Start with a compelling headline that motivates the…

Building an MVP is a part of almost every founder’s work. Here are the key steps to build an MVP. Most founders build an MVP and then talk to users. Instead, talk to users first and then build the MVP. Take into account the users’ feedback. Release the initial MVP…

The startup life brings many challenges. It’s not for the faint of heart. It will demand the best of you and will test you often. Here are some key challenges in the startup life: Most founders have co-founders to deal with. Maintaining the relationship is tantamount to having a marriage….

When finding new startup ideas, start with your own interests in mind. Look for solutions to problems or challenges you face. Here are the steps to finding new startup ideas from your own experiences: Choose a problem that is a major pain point. Skip the casual problems that generate solutions…

In raising funding, the founder will find that investors vary in their approach to the startup’s fundraise. Some will want a valuation set while others just want to be in the deal. Some will invest because of the team, others because of the product or sector. Founders should customize the…

Investors funding startups look for founders who have the right characteristics for success. Here’s a list of key characteristics of fundable founders: Grit is top of the list. Launching and running a startup is hard work and takes years to see an exit. Founders with grit who can last through…

Founders who take on funding start the process of transferring control of the company to the investors. As the funding moves from Seed to Series A, the investors increase their control. Most seed-stage companies have no board of directors. Instead, they often have a board of advisors who can provide…

There are several reasons international companies expand into the US market. The US market is the largest market in the world and provides the most opportunities to the company to sell its products. Funding in the US is more available than in most other countries. Startups moving to the US…

Investors should foster the local startup community. The more vibrant the community, the better the deal flow. Here are some key ways investors can foster it: Provide events and activities that connect and network startup founders with co-founders. It takes a complete team to make a startup successful, so it’s…

In startup investing, look for startups that solve real-world problems. Focus on the ones that provide a solution tantamount to a painkiller. The customer has a problem that causes them enough pain that they’ll pay for a solution to get rid of it. There tend to be fewer painkiller solutions…

Invest in the Capable Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing. The team is often the key indicator of a successful startup. In startup investing, look for competency and experience in the team. Competency and experience can…

Startups raising funding should have a grand vision. That vision must inspire investors to join the cause. It takes years for the vision to come to full fruition. To take on a large problem, consider the following: Start small.   In the early days, the startup will be small and sometimes…

Startup investing requires several skills, including business model analysis, domain knowledge, and team evaluations. The early days of the startup provide only a glimpse into what that startup will be in the future. Startups often look unable to achieve greatness in the early days, as the team is not built…

Startups are different from small businesses in that they are based on the growth paradigm. Small businesses such as restaurants and retail are good businesses, but they are not startups. A startup seeks high growth throughout its life. Startups build their businesses to foster growth. Through the products and services…

There are many entity types used in forming businesses. Here are the key ones to consider for your startup: LLC — Limited Liability Company Startups use this structure to protect themselves from liability. It’s issued by the state, which can vary the rules across the country. It doesn’t allow for…

Founders looking for their next startup seek ideas for launching a business. Some look at what other founders are doing and then copy the idea. It’s best to start with a customer problem that has not been solved. Once you have a startup idea, test it with the following: Are…

In acquiring a company, there are indicators pointing to success. Here are the key elements leading to a successful acquisition: Outgoing CEOs Acquirers with outgoing CEOs often lead to successful outcomes. They have the ability to project their vision onto others. Their personality can sway the negotiations to a successful…

There are more venture capital funds in the market today than ever before. It’s never been easier to launch a VC fund. Here are some key steps to consider before launching one. Do you have a track record in startup investing? Limited Partners in the fund will want to know…

In raising funding, it’s important to create a herd effect. A herd effect is building a larger group of investors that gives your fundraiser credibility. Here are some key steps to create a herd effect with investors.  First, show how other investors have either invested or are following your deal….

Startups appear to be straightforward to launch and run. But there are many aspects of running a startup that are not obvious. Here are some key points to consider before launching a startup: The key to success is not just to know how to run a business. It’s about knowing…

In building a startup, the founder should consider monetizing the data. Data can provide an additional range of moats for the business. Here is a list of data moats that are ineffective: Openly available and easily accessible data sets General analytics on the data Dashboards and reporting tools. Here’s a…

Founders raising funding are often under the gun with a dwindling cash account. Some founders mistakenly use this as part of their pitch. They emphasize the need the founder has rather than the return the investor will receive if they fund the startup. Investors look for fundable companies. Those in…

Startup investing returns vary greatly from one investor to the next. Here’s a list of key drivers that provide startup investors with a return. High-quality dealflow. Many startups seek to raise funding, but only the top 15 to 20% will provide a good return. Rigorous due diligence. It’s easy to…

The startup world is constantly changing. It brings new technologies, applications, and business models. The startup investor must keep up with the ever-changing startup world. Here are some key tips on how to stay up: Realize that one’s beliefs about how the world works will at some point become obsolete….

Founders pitching investors almost always use a pitch deck. It’s a convenient way to organize the story. Graphics, charts, and glyphs help tell the story in a short, concise fashion. In some cases, the pitch deck is not available for the pitch. For example, the founder receives an impromptu introduction…

The investor holds sway over the startup founder since they hold the decision of who to fund. Some investors take advantage of this and treat founders poorly just because they can. It’s better to be the nice guy investor. Here’s why: The nice guy investor builds relationships rather than burns…

Startups carry with them a glimpse of their potential future. Most companies look small and insignificant in their early days. The challenge for the investor is to see their future and know how to help them achieve their potential. Successful startups have a vision of the future and work to…

Startup founders must build a company from scratch. After fundraising, team building is one of the biggest challenges. The founder must be able to recruit qualified people to the team. Startup failure most often comes down to hiring the wrong people for the job. A founder must have charisma and…

There are several key legal documents every startup will use. Here’s a list of those documents: Business Entity filing — this establishes the legal entity of the business, such as a Delaware C Corp, an LLC, or other. Non-compete documents — employees sign these to prevent competition with the company….

Investors look for protection against the competition. The stronger the moat around the business, the more compelling the offering. Here are some key steps to build a moat into your startup: Develop a unique brand that stands out. This prevents others from copying the business model and diverting revenue away…

Founders face a daunting challenge in launching a startup. There are many things the first-time founder doesn’t know. Accelerators bring many benefits to the startup founder. Here is a list: Accelerators bring education to the founder to fill in their knowledge gaps. This is often around sales, marketing, and finance….

Investors screening deals look for momentum and traction before investing. They also look for the team and its capabilities. An often overlooked factor is the team’s genuine interest in the field. Passion for solving a particular problem can be a strong factor in startup success. The founder who wants to…

In the startup space, one is always learning. There’s a new technology, a new business model, a new market, or other to grasp. It’s important that those in the startup space can make mistakes and learn from them. The faster one can learn, the better. The startup often has two…

Some founders find fundraising to be frustrating.   The founder expects more to happen than is realistic. Progress is slow, and the results are not coming in as expected. In most cases, the expectations for the fundraising results are not aligned with the current market conditions. Most deals are done several…

The best asset in raising funding is growing traction with customers. Knowing how to sell into the enterprise is a key skill that founders should have. Here are the steps for selling into the enterprise: Find a champion for your product within the target company. This is typically the person…

Closing an investor for funding is a critical skill founders need to have. Here are some key steps in closing an investor: Investors look for startups that show evidence of success. They avoid startups with red flags and problems. To close, you must show key elements of success already in…

The pivot brings additional opportunities to the startup. Consider using a pivot to add additional revenue streams and touch points to your business. Here are some examples: Consider monetizing the data flowing through your business by capturing and reselling it. Partner companies are ideal customers for this type of data….

Success in most endeavors comes down to having the right skills and the right connections. Your network determines your focus. In startup fundraising, you’ll need skills such as how to pitch, how to grow a business, and more. You’ll also need a network of investors to tap for funding and…

Investors want to see momentum and traction before funding a startup. It’s important to have a growing revenue stream to gain investor interest. Here are some key ways to grow your revenue. Look for disruptions in the market and take advantage of those opportunities. This could be external factors, such…

Pivots are part of the startup journey. Most startups pivot at some point along the way. Here are some reasons to pivot your startup. The revenue traction is simply not coming up. Consider a pivot to a more profitable business model, such as SaaS. This can generate a great deal…

While a fund of funds investment approach may have benefits, there are disadvantages. Here is a list: The returns on a fund of funds range widely. It’s rare that a fund of funds makes more than 25% IRR. It’s just difficult to do with the funds spread across so many…

Investors looking to fund startup investments often receive unsolicited calls from founders. In most cases, the founder is not yet fundable but is making a go of it. To find quality investments, investors need to be proactive in their outreach to founders. Here are some key steps in approaching a…

Biotech startups bring a unique set of value propositions and exit opportunities to the startup investor. Here’s what investors look for in a biotech startup: Investors look first and foremost for a novel target to pursue. These receive outsized funding rounds at the early stage. Investors look for platform-based approaches…

In engaging investors, startup founders should master the self-introduction. It’s important to make a good first impression. While some introductions come from others, most often the founder will be introducing themselves. Here are some key points in introducing yourself to an investor: Begin with gratitude for their time. Avoid the…

The power law drives the startup investment return. Only a small number of startups are going to have an outsized return. The power law also applies to startup pitching. The best pitch in a group wins the lion’s share of the funding. While investors may view each startup differently, the…

Investors see many pitches from a wide range of founders. To stand out, the founder should show credibility to the investor. Those with exits should put that first in the pitch. This shows you know how to reach a successful exit for your investors. Those who were part of companies…

Investors say no to most of the deals they see. Founders should take ‘no’ in stride and do the following: Review the deal for the risks the investors see. Some investors worry about risks that don’t exist, as they are not familiar enough with the company or the market. Founders…

Fundraising is a time-consuming challenge for founders. Some consider outsourcing the fundraising process to brokers who will take a success fee for what they raise. This works well in later-stage funding but is not a fit for startup fundraising. Portions of the fundraising process can be outsourced, such as the…

Running a startup brings many challenges. Here’s a list of key challenges to overcome: The startup is a rollercoaster ride from the highs to the lows. Be prepared to have your emotions go through turmoil. The founder must move everything. There’s no corporate flywheel behind you. There’s no brand that…

Investors reviewing a startup for a potential investment know there are many risks to consider. Here’s a list of key risks to look for in a startup: Team risk. Does the startup have the right team with the right skills, and can they work together? Market risk. Will the market…

In raising funding, investors look to see where the startup is in finding product/market fit. Here are some key tests to check how close your startup is to product-market fit: Demand outstrips supply. The startup finds itself constantly adding more server space for customers. The startup finds itself hiring more…

In raising funding, the founder should avoid out-of-market valuations. There may be investors who become so excited about the deal that they offer a valuation that is above the current market. While this may appear to be a great opportunity to get a better price, the founder should avoid it. …

In raising funding, a founder starts with their own network. When that runs out, he looks for additional sources. There are many investor lists available through online resources. Here’s how to use an investor list in a fundraise. Check your connections to the investor through your network, including social media….

In raising funding, the bar goes up with each round. The revenue must be higher, and milestones must be achieved. In raising funding, consider how to build a steady growth rate into the business. Look to avoid those businesses that have strong seasons and cycles throughout the year. Rework the…

Investors see a tremendous amount of dealflow. For some, it can become wearisome to see the same mistakes repeated. It’s important for the investor to keep a good relationship with the founder. This means avoiding arrogant or condescending feedback to the startup. It also includes treating the startup founder with…

In raising funding, the founder sets a target.  Oftentimes, the target is a rather large number. It’s best to break the larger raise into smaller rounds. This lets you run a series of smaller campaigns inside the larger fundraise. One of the benefits of breaking the raise into smaller rounds…

Startup investors should act as role models for startup founders. Startup founders are often new to the startup world and so look to others with experience for how best to play the game. Avoid these sins as a startup investor. Not being genuine. Investors want startups to tell it straight,…

Bringing on a cofounder has many advantages. There are also disadvantages. Here’s a list of challenges with partnerships: Decision making. Partners bring the challenge of making decisions. It’s best to decide who has the final say in all decisions to avoid a stalemate. Liability. Both partners are liable for the…

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. …

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…

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…