Building a Startup Portfolio

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

Startup investing requires a portfolio approach.

Here are some best practices for building a startup portfolio.

Determine how much time and investment dollars to allocate to startup funding.

This could be done on a total allocation basis or on a time basis such as annually.

Determine how many startups to fund and at what check size.

Consider breaking the startup allocation in half and initially investing the first portion.

In a follow-on round, consider if you should invest the second half into that startup.

Beware of emotional investing.

This comes from investing based on the quality of the pitch or the emotions the pitch raises.

Match the risk to the reward.

The greater the risk, the higher the potential reward must be.

While investors most often choose the startups they want to invest in, the best startups typically choose their investor.

Look for high-quality startups to engage and invest in.

Finally, avoid turnaround situations.

Consider these points in building your startup portfolio.

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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What To Include in a Due Diligence Report

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

The due diligence report is written by the due diligence team.

It covers the financial, operational, legal, and strategic aspects of the startup.

A due diligence report for a startup investment contains the following:

Market analysis

This includes the size, growth rate, sectors, competition, and the startup's target customer.

Product.

The diligence report assesses the product for competitive advantage, defensibility, and scalability.

Financial.

The report reviews the financial projections to see if they align with the startup's team, product, and market opportunity.

Team.

The report covers the team's experience, skills, and industry knowledge to see how well it matches the startup's requirements.

Exit.

Reviews the various exit strategies and how to achieve them.

Here are the components of a due diligence report:

Executive summary

Purpose of due diligence

Financial

Legal

Operational

Market

Regulatory

Assets

Risks

Growth prospects

Conclusion

Appendix with supporting documentation

Consider these elements for your due diligence report.

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.

Using the Four-Quadrant Slide

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

In pitching the startup, the founder shows how the business will be positioned in the market.

The four-quadrant slide is one tool to show how the startup compares to the competition.

Here's how to set up the four-quadrant slide.

Start by identifying the key criteria for customers.

This could be cost, performance, ease of use, or more.

Check the competition for how they rank on the criteria compared to the startup.

Choose the top two criteria and show how the startup's product performs.

Lay out an x/y axis and show one criterion on the horizontal axis.

Show the other criteria on the vertical axis.

Label the axis so the startup is positioned in the upper right corner.

Position the competition in each of the other three corners.

This communicates to the investor how the startup will compete and on which criteria they are superior.

This helps the investor understand the startup's position compared to the competition.

Consider using the four-quadrant slide in your pitch deck.

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.