How To Hone Your Deal Selection Process

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

Investors funding startups go through a great number of deals to find the ones to fund.

The investor won’t know for several months or years if the deal is going to work out or not.

The startup’s fundraising is typically over after six months or a year.

The investor often brings their personal business experience to the selection process.

For startups, this may or may not be the best way to screen startup deals.

Markets and technologies change over time, so it’s important to keep up to date with one's selection process.

Here’s how to hone your deal selection process:

For the next twenty-five startups, write out which ones you would invest in and why.

Do the same for those you would not invest in and state why.

Revisit those twenty-five startups three to six months later to find out what happened to them.

Compare their outcomes with your written projections.

This will tune your selection process by giving you more factors to consider.

From time to time, hone your selection process to find out what’s working in the startup world and what is not.

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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In this episode of Investor Connect, Hall Martin welcomes Abe Kwon, a partner at Lowenstein Sandler, LLP, a renowned national law firm with a strong focus on emerging companies, venture capital funds, and investors. Abe Kwon shares his extensive experience as a startup venture capital lawyer and provides key insights into the critical legal considerations for early-stage fundraising, especially regarding venture capital, SPACs, and alternative capital vehicles.

The conversation delves into best practices for governance and board structuring as companies grow, emphasizing the importance of trusted legal counsel in navigating these complex waters. Abe Kwon discusses the growing trend of cross-border investments and the complexities early-stage startups face when hiring contractors or employees abroad. He highlights the resurgence of crypto and digital securities, providing his perspective on evolving legal requirements and the importance of staying updated with regulations. The episode also covers strategies for preparing for M&A and IPO events, stressing the importance of having a solid legal framework from day one to ensure smooth exits.

Abe Kwon shares lessons learned from challenging deals and offers practical advice for founders in choosing the right legal partner and preparing for due diligence. The discussion wraps up with an exploration of trends in the ESG and impact investing space and how legal frameworks are adapting to sustainability-based capital. Abe Kwon also touches on his involvement in national innovation ecosystems and the impact on local startup communities.

Visit Lowenstein Sandler LLP at www.lowenstein.com/

Reach out to at www.linkedin.com/in/abekwon/; akwon@lowenstein.com

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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The KISS Note

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

KISS in the startup world stands for Keep It Simple Security.

It’s similar to a convertible note.

Here are the differences between a KISS and a convertible note:

The KISS gives the holder the right to participate in future funding rounds.

Convertible notes only convert the current debt into equity.

The KISS gives the holder a “most favored nation” clause, which means the holder gets the best terms of any investor in the round.

The KISS gives the holder additional liquidation preference rights.

Convertible notes give no liquidation preferences.

The KISS note is more investor-friendly than a convertible note.

In addition, the KISS note provides representation and warranties, which means the founder has disclosed all relevant information and is liable if not.

The KISS can be transferred to others without permission from the founder.

The KISS, like convertible notes and SAFE notes, is easy to use and simple to apply.

Consider a KISS note for your fundraiser.

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

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Under Promise, Over Deliver

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

In fundraising, the startup founder should underpromise and overdeliver to the investor.

Here are some key areas to apply this:

Forecasting.

Most founders overpromise and underdeliver on their sales forecast.

Instead of over-promising on the revenue results, forecast a lower number and then show how you exceeded the forecast.

Planning.

Most founders overpromise on their progress in building products.

Instead of overpromising, set a less aggressive goal and show the investor how you are ahead of plan.

Hiring.

Most founders set an aggressive goal for how many team members they need.

Instead of hiring the full headcount, show how you accomplished the goals with a smaller headcount.

Fundraise.

Most founders set ambitious goals for their fundraisers.

Instead of proposing the ideal fundraising timeline, set a lower goal.

In the updates to the investor, show how you are ahead of schedule on the raise.

Apply these steps to under-promise and over-deliver to the investor.

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

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How To Use Framing in Your Pitch

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

In pitching investors, framing can be used to position the startup as a successful business.

Framing is how you structure your message to shape how your audience perceives it.

It can be used to generate credibility and overcome objections.

Start with a problem statement and a compelling solution.

Position the team as credible and trustworthy.

Articulate the benefits of the solution throughout the pitch.

Show how it aligns with the goals of the investor, which is to make a return.

Contrast is a framing technique.

Use it to show the difference between the current problem and the promised future of the solution.

Start with what you want the audience to think and work back to the solution that creates that result.

Positioning is another framing technique.

Use it to place your startup as superior by showing the competitive advantage.

Use framing in your fundraising pitch to investors.

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

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The Myths of Biotech Investing

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

Biotech investing differs from tech investing.

There’s often no revenue traction to assess.

The startup must navigate the FDA path while dealing with cutting-edge devices and therapeutics.

Here are some myths of biotech investing:

Myth 1-Biotech startups are building companies.

In many cases, the biotech startup will sell during the clinical trials or at FDA approval.

They rarely proceed to launching a business.

Myth 2- Biotechs take much longer than tech companies to exit.

Most biotech startups exit in the 3 to 5 year range, which is often shorter than tech companies.

Myth 3- Regulatory is the key hurdle to overcome.

In reality, it’s proving the therapeutic works.

Most drugs fail in clinical trials and never reach FDA submission.

Myth 4-Reimbursement is the key to a successful biotech therapy.

In reality, it’s showing value to the physician and patient through high efficacy and low toxicity, which is the key to success.

Consider these myths in analyzing biotech 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.

_______________________________________________________

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

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How To Close a Strategic Investor

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

Strategic investors are large companies that use startup investments to further their business objectives.

They rarely invest to make a financial return.

They fund startups to stay abreast of new technologies and markets.

They often invest in advance of buying the startup.

To close a strategic investor funding, consider the following:

The investor doesn’t care about the market size, competitor analysis, or go-to-market.

They care about furthering their own strategic goals.

Align the presentation with how the startup will help them reach their objectives.

Focus the effort on building products and testing markets that are important to the strategy.

Use these tools to gain an introduction to the key people at the strategic level and their priorities.

Point out the key value propositions of the startup and where they should look for entry points into the market.

Identify the key decision makers and keep them informed of your progress.

Be patient with the corporate process, as it will take time.

There’s typically a small number of people focused on funding startups at their company, so don’t expect significant resource commitments.

Consider these steps in closing a funding round from a strategic corporate partner.

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.

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In this episode of Investor Connect, Hall Martin speaks with Rachna Dayal, a global health biotech and venture investment expert, founder of Sugati Ventures.

Rachna shares her transition from corporate roles at Johnson & Johnson and Philips to founding and running a venture fund focused on transformative health tech startups. She talks about the major differences between working in large corporations and managing a small VC fund, emphasizing the importance of flexibility and addressing high unmet needs in healthcare through innovative solutions in medical devices and AI-enabled platforms.

Rachna highlights her investment thesis around consumer-first, purpose-led brands, particularly focusing on life-saving devices and enhancing quality of life, and discusses the crucial role of founder-market fit and diverse backgrounds in fostering innovation in the healthcare space. She also touches on current trends such as the rise of AI in healthcare and the impact of economic conditions on venture capital, offering advice for new investors and emphasizing the need for perseverance during tough times in the investment landscape.

Visit Sugati Ventures at sugativentures.com/

Reach out to at www.linkedin.com/company/sugati-ventures/

_______________________________________________________

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.