When To Consider Venture Debt

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

In startup funding, there is venture capital and venture debt.

Venture capital takes an equity stake in a startup in return for funding.

Venture debt makes a loan to the startup for that funding.

Both have their place in the startup ecosystem.

Venture capital comes in at the early stage of the business as the startup needs funding but has no revenue to pay it back.

Venture debt comes in at the later stage of the startup because the business has revenue with which to repay the funding.

Venture capital launches the business, but venture debt continues the growth.

As the startup grows from the early stage to the later stage, equity becomes worth a great deal more.

At the later stages, the founders calculate the value of their equity and compare that to the cost of a loan.

Dilution in the form of equity funding becomes expensive to the founders.

Founders turn to venture debt when the dilution from the funding costs more than the loan repayment.

Consider the use of venture debt in replacement of equity funding from venture capital for your fundraising.

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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In this episode of Investor Connect, Hall T. Martin, CEO of 10 Capital, introduces co-host Kat DeLillo and special guest Brian Wood of Wave Ventures. Brian delves into the innovative approach of Wave Ventures in partnering with universities to commercialize intellectual property. He shares the backstory of Wave Ventures' collaboration with Baylor University and how this partnership successfully accelerated the university's research status to R1 in record time. Brian outlines their unique model which allows Wave Ventures to hold over 80% equity in their startups, and how they strategically place business experts to guide these deep tech innovations from conception to market.

The discussion covers various successful projects, including advances in digital display technology, novel ventilator systems, and significant improvements in propeller design for drones and aircraft, all sourced from university partnerships. Brian also shares personal anecdotes about his unexpected journey into the venture capital space, highlighting his background in medicine and previous success in the entrepreneurial world.

This episode provides a comprehensive view of how Wave Ventures is not only financing the next generation of deep tech startups but also de-risking these investments to secure substantial returns. For more information on Wave Ventures' projects and their innovative investment strategies, stay tuned to Investor Connect. To engage with Wave Ventures and learn more about their upcoming initiatives, please visit their website and explore their wide range of high-potential startups transforming deep tech landscapes.

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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How To Stand Out From the Crowd

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

In raising funding, it helps to stand out from the crowd of other startups pitching.

Most founders will give the standard pitch, often with slides in the same order.

Here are some key pointers to make your startup stand out.

Show your business model in unit economic terms.

Show your growth story with a chart that goes up and to the right at a 45-degree angle.

This demonstrates there’s a growth story happening in your business.

Point out the recurring and repeating revenue streams you already have.

Show the skill set in its entirety that your team brings to the table.

List the team's exits and other performance wins.

Show your business with numbers that the investor can digest.

Choose three compelling metrics and show them in the presentation.

The investor will have a hard time remembering more than three, so choose the best.

Show the customer engagement with your product in terms of daily, weekly, and monthly active users.

Show how you have figured out customer acquisition and its repeatability.

Show your ideal customer profile. Make it clear you know who you want.

Consider adding these points to your presentation.

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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Show the Business Model Unit Economics

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

Early-stage companies pitching investors often have little revenue traction.

In place of traction, show how the business model performs on the unit economic level.

Calculate the cost of acquiring a customer and the expected lifetime value of that customer.

Show the ratio between the two and make a note of it.

Show how your business model is profitable at the unit economic level.

This will resonate with investors who seek working business models.

Discuss the variability of the costs and how the costs will scale with the business.

Make a note of the gross margins and the profit margins at the early stage.

Some investors judge the business based on the margins and the variability of costs.

This allows the startup to ride the economic waves of good times as well as bad times.

Show how the business is close to breakeven already.

Note how few customers it will take to reach break-even.

Show how the business is profitable at the very early stages.

Show the business model in unit economic terms when pitching to an 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.

_______________________________________________________

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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Raising Funding in a Down Market

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

The best time to start a new business is during a down market.

Labor is plentiful.

The competition is on their heels.

Yet, customers are still looking for a solution to their problem.

In a down market, it can be even more difficult to raise funding than in an up market.

The outlook is gloomy, and uncertainty about the future hangs in the air.

Here are the key steps to raise funding in a down market:

Bring your A-game to the table.

Show all the values in the business, including a strong team and a large target market.

Also, show your key insights into the customer problem and your unique solution.

Show initial interest and traction with customers.

Highlight the robust margins in the business.

Talk about the short timeline to break even.

If your business requires a long timeline and has thin margins, rethink your business model.

Investors look for robust margins and short runways to profitability.

Show how the business is up and running and stable, and can weather uncertain economic conditions.

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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What Angels Look For

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

Angel investors are not professional investors in the same way as venture capitalists.

Angel investors are typically successful business people who want to invest in startups.

The old angel saying is, they want to make a little money, do a little good, and have a little fun.

They often have a broad or general investment thesis.

They don’t focus on one sector or niche in most cases.

They look for startups that are solving a big problem with a differentiated solution, and led by a strong team with experience.

They look for product validation and market validation.

The product works, and people will pay for it.

Most importantly, they look for startups demonstrating the growth story.

The revenue is growing, and the startup is making good progress on building the business.

There needs to be a large potential reward but it doesn’t have to be 100X as in the case with many VCs.

They avoid companies that need to raise a large amount of additional capital, as this will dilute them.

They get excited about an opportunity that has recently reached an inflection point.

This could be closing a lighthouse customer, launching the final version of their product, or hiring a team to accelerate sales.

In raising funding, position your deal for angel investors with these care abouts.

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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For Investors check out: https://tencapital.group/investor-landing/
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First Meeting With an Investor

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

After a number of calls with a prospective investor, there comes the first meeting in person.

Here are some key steps in running that meeting:

Introduce yourself and your team.

Show the market you are pursuing.

Present your solution.

Show your sales process and how it works.

Explain your go-to-market strategy.

List the milestones you plan to achieve with the funds raised.

Define the fundraising status, including the amount, terms, and how much has been raised so far.

Make the presentation a collaborative effort, taking questions along the way to ensure everyone is tracking with you.

Answer questions directly and to the point.

If the question begins with How many or How much then the answer should be a number.

If the question begins with When, then the answer is a time or date.

Stay on topic and avoid long, meandering stories.

Finally, come prepared knowing your numbers.

Consider these points when preparing for your investor meeting.

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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In this episode of Investor Connect, we welcome Alan Foreman, the CEO of Be Secure, who discusses the transformative journey of his company in the realm of heart health. Alan shares that he founded Be Secure nine years ago after a lengthy career in Accenture's Life Sciences division. Currently, the company is on a $12 million growth raise to commercialize its breakthrough heart health technology, which received FDA clearance recently. Be Secure focuses on making preventive rather than reactive heart health solutions, leveraging their powerful, device-agnostic software that offers high accuracy ECG readings in consumer and medical devices alike, such as the latest versions of the Whoop and Fitbit devices.

Alan elaborates on how the recent challenges faced by Philips, a significant player in heart monitoring technology, present both a testament to the need for better solutions and an opportunity for Be Secure to make a substantial impact on the market. Alan details the company's innovative use of cybersecurity experts and detailed signal processing to develop technology that bridges consumer wellness and medical-grade ECG technology. He highlights how Be Secure's cloud-based and on-device solutions offer transformative accuracy and efficiency in heart monitoring, even earning the interest of major insurers like Blue Cross Blue Shield. The conversation turns to the scalability and swift deployment of Be Secure’s solutions in medical environments, emphasizing how their data quality can accelerate and improve diagnosis in cardiologists' workflows. Alan stresses the importance of their upcoming scale-up and commercial focus, particularly in filling the funding gap to expedite the deployment of their remarkable technology in the healthcare space.

We also learn about Be Secure's financials and investment strategy, which involves contributions from venture capital and venture debt providers. Alan emphasizes ongoing discussions with top medical companies and the anticipated rapid revenue growth fueled by the latest FDA clearance. The episode wraps with Alan addressing some practical questions about scaling, design timelines, and the lifecycle of deals with their partners, giving a comprehensive view of Be Secure's promising future. For more updates and opportunities to engage with Alan and Be Secure, stay tuned to Investor Connect.

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/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.