The Role of Intuition in Startup Investing

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

Startup investing requires several skills, including business model analysis, domain knowledge, and team evaluations.

The early days of the startup provide only a glimpse into what that startup will be in the future.

Startups often look unable to achieve greatness in the early days, as the team is not built out.

The business case can be difficult to assess because the market is new or the technology behind it is nascent.

While business acumen is the primary tool for vetting a startup, there's also intuition.

Startup investors use their intuition and prior startup investing experience to identify key patterns that lead to success:

Intuition plays a role in startup investing as follows:

Look for evidence that the team has the right mix of skills and motivation to achieve the goal.

Look at how well the product solves the customers' problem.

Look at how profitable the business model is on a unit economic level.

Look at the scalability of their fundamental business model.

These are the key elements that require intuition to suss out the strength of a startup.

Consider these elements in screening startups for investment.

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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Growth Is the Paradigm of the Startup

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

Startups are different from small businesses in that they are based on the growth paradigm.

Small businesses such as restaurants and retail are good businesses, but they are not startups.

A startup seeks high growth throughout its life.

Startups build their businesses to foster growth.

Through the products and services they offer to the business models they use, they seek high growth.

Startups often look to technology, in particular disruptive technologies, to foster that growth.

Startups need capital to achieve it.

To be considered for funding, the growth rate needs to be at least 50% or more year over year.

Anything below, and investors will not consider the startup to be in the growth mode.

Startups also need a team that can foster and manage growth.

This high-growth paradigm either takes the company to new heights or sends it crashing down.

In startup investing, look for these drivers of growth in a startup before 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.

Legal Entities for Startups

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

There are many entity types used in forming businesses.

Here are the key ones to consider for your startup:

LLC -- Limited Liability Company

Startups use this structure to protect themselves from liability.

It's issued by the state, which can vary the rules across the country.

It doesn't allow for issuing stock but rather ownership units.

S -- Corporation

This is an LLC that elects to defer paying taxes to the owner.

This provides a tax advantage but comes with a limitation on the number of members.

It should not be used for startups seeking to raise outside capital.

Delaware C Corp

This is the ideal legal entity for a startup as it provides the most protection of assets and limitations of liability.

The entity exists beyond the life of the founders.

It can have an unlimited number of shareholders.

The drawback is that there is double taxation.

First at the corporate level and then at the personal level.

The Delaware C is the best C Corp to use as it has substantial case law behind it in the event of litigation.

Consider these points in selecting the legal entity of 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.