The Many Challenges in Angel Investing

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

Angel investing comes with many challenges.

Here's a list of how to deal with them:

One's angel investing experience will inform one's investment thesis.

That's why every angel brings a unique perspective to the process.

It takes more than intelligence to win at angel investing.

It requires emotional intelligence as well.

The one who can control impulses will do better than those who don't.

Taxes on the gains are an issue.

Every angel investor should study how to mitigate taxes throughout the investment process.

Choosing the winners at the earliest stages is often difficult.

There are many exogenous factors that come into play before the exit.

Look for the basics in a startup -- strong team, compelling product, and large market.

A product is not a company.

It takes a team, a customer, and a market as well.

Optimism is required to achieve success.

Pessimism alone will not succeed.

Look for what will work in addition to what might go wrong.

Avoid the overly complex and stick to the simple.

Consider these principles when facing challenges in angel investing.

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.

The Value of Proprietary Insights

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

In selecting startups to fund, investors often use various deal flow channels to find the ones that fit their investment thesis.

In addition to deal flow, the investor also needs proprietary insights.

This comes from not only seeing a wide range of deals but also knowing which deals stand the best chance of an exit.

Proprietary insights come from understanding the needs of the acquirers of startups.

These are often larger companies that grow by acquisition.

Knowing their care abouts and requirements gives the investor a keen insight into which ones will most likely be acquired.

This includes the sector, stage, and key metrics.

For example, this could be fintech companies in the scaling stage with a CAC:LTV metric above 1:8.

An investor can gain proprietary insights by building a network of CEOs in the target area.

Spending time with that CEO network will unveil a list of care abouts and opportunities for a startup investor to pursue.

The more the investor knows about what the acquirers are looking for, the better the investor can select companies to fund.

Consider how to gain proprietary insights for your startup investing.

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.

Alternatives to a Down Round

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

During down markets, the founder may find it a challenge to raise funding at a higher valuation than the last round.

If the company is not doing well, there's the possibility of a down round.

Instead of a down round, consider the following:

Raise more funding but at the same valuation as the last round.

This move sideways avoids the down round but generates more funding to continue the growth.

Run an internal raise giving existing investors a lower valuation.

This works best by offering investors the option to invest more at the same valuation as their original investment.

Current investors gain more shares at their original valuation but in a company that has progressed further.

Reduce the amount of funding raised but at a slightly higher valuation.

This generates some funding for critical needs but doesn't dilute the previous investors as much as a down round.

Finally, the founders could avoid a down round by giving up some of their shares to compensate new investors joining the round.

This could be structured as warrants.

Consider these steps for avoiding a down round in your startup.

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.