Screening Criteria – the Product

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

In screening startups for funding, here are the key criteria for vetting the product:

Solve a real problem.

The product solves a problem that is big enough that customers will pay for it.

It helps if customers will pay good money for it.

Traction.

The product has enough traction in the market to prove it works for the customer.

This should be growing month over month.

Core monetization.

There's enough revenue coming from one core source to build on.

Ancillary revenue streams can come later.

Business model.

The business model generates enough revenue to cover the cost of customer acquisition.

The CAC:LTV ratio should be at least 1:3.

Cost to build.

There's a process in place to build and support the product.

There's a system in place to continue building the product and growing the revenue.

Lead generation.

There's a system in place to generate leads that turn into sales.

The conversion rate is known and improving.

Use these criteria to vet the product.

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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Screening Criteria – the Team

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

In screening startups for funding, here are the key criteria for vetting the team:

Number of team members

It's best to have a complete team of three to five.

Short of that, one looks for a team that covers the basic skills required -- someone is building it, and someone is selling it.

Many founders.

More than two founders can be a problem. There are too many leaders and not enough people to execute on all the ideas.

Technical founder.

The lack of a technical founder is cause for concern, as the group may find it difficult to grow.

Lack of industry knowledge.

Founders who made it elsewhere often take up startups in high-growth areas.

Make sure they know the industry well.

Startup experience.

Corporate types often leave the big company to start their own business.

The work model between a big company and a startup is very different.

Too many other jobs.

Founders who work part-time on the business will find it difficult to gain traction as a founder's job is full-time, if not more.

Consider these factors in vetting the team.

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 Work of a VC Scout

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

The VC scout searches for qualified deals for the venture capital firm.

Here are the basic tasks of the VC scout:

Scouts search for deals by joining events, pitch sessions, angel groups, and other sources of deal flow.

The scout analyzes each deal to see if it fits the venture capital fund's investment criteria.

In most cases, the startup must meet key metrics required by the fund, such as revenue levels, growth rates, CAC:LTV ratios, and more.

The scout analyzes the financials to determine the state of the startup.

The scout researches the competitors and determines its competitive position.

The scout also analyzes the market for size, growth rate, and structure.

Unit economics are often a key factor as well.

Finally, valuation is a key component of the research.

The scout checks to see if the valuation is in the range that the VC will fund.

The scout often participates in the due diligence process as well as the term sheet negotiations.

Consider bringing on a scout for your VC fund.

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.