How to Diligence an AI Startup

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

Artificial intelligence companies bring new challenges to the diligence process.

Here are the key steps to diligence an AI startup:

Does the AI startup have a clearly defined market that needs the product?

How competitive is the startup over other providers?

How well does the product fit the customer's needs?

Does the company have a clear growth strategy?

What type of data does it need, and can it find enough to meet the growth goals?

How does the customer of the product use the output?

How does one ensure the quality of the output?

Can the business be built on a data-driven approach?

Does the AI learn from its own processing, thus improving the model with more data?

Can the product build new use cases and thus open up new market opportunities?

What metrics does it use to check performance?

Does the system require a human to be involved?

What is the cost of this step?

Does the team have the necessary AI skills to build and run an AI-based product?

Does the team require outside expertise? Can they find it?

Consider these questions in diligencing an AI 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.

_________________________________________________________

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Technical Due Diligence

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

Investing in startups requires due diligence.

In addition to financial diligence, an investor should consider technical due diligence.

Here are the key areas to review for technical due diligence:

Scientific risk.

This is the risk in deep tech startups that comes from basic science.

Look for startups that have de-risked science.

Technical risk.

This is the risk that comes from designing the product.

Look for a clear plan on what to build.

Check the skills of the team to see that they can build it.

Manufacturing risk.

This is the risk that comes from building the product.

Look for a plan for sourcing materials and components.

Check the requirements for producing the product.

Ecosystem risk.

This is the risk that comes from the product needing a specific environment in which to succeed.

Check the requirements for the product to operate in.

IP risk.

This is the risk that comes from a competitor's ability to copy the product.

Look for patent coverage that provides a strong defense.

Check these elements when running a technical due diligence on a 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.

Why VC Funds Should Build a Community

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

A community is a network of contacts who come together for a common cause.

Venture capital funds should build a community.

Here are the reasons why:

A community will generate more and better deal flow.

Those in the network will know of the venture capital fund and will send deal flow automatically.

Having a community positions the fund as an anchor for the network.

This generates credibility for the fund.

A community provides additional support mechanisms such as mentors.

Those in the community who can provide mentorship around sales, marketing, and finance are more easily engaged.

A community provides services.

Those in the community who can provide financial forecasting, accounting, and marketing services are more readily available.

Word of mouth.

In a community, news propagates more quickly.

Attract investors.

A community will attract more investors as they look for networks to join so they can learn and find support.

This includes both Limited Partners for the VC fund and individual investors to provide follow-on funding to the startups.

Consider building a community 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.