2017 was a banner year for ICOs. The money was flowing. Startups with nothing more than a whitepaper were raising millions of dollars. The events around ICO’s were extravagant affairs at high-end hotels and on cruise ships. Then it came crashing down by the end of Q1 2018 when it came out that 42% of all ICOs in 2017 were already dead. The party was over. Even today, two years later, it’s still over. I see those who raised funding during 2017 come back around for their next raise. They now appear as ICO Refugees. They have the mindset of 2017 in which the ‘sky is the limit’ and the investment dollars infinite. Their pitch starts with the promise of blockchain and the new market they are going to create. They’re going to tokenize an application and create a market. They have big-name partners lined up to work with them. The only need $5M dollars to build out the system and another $10M to launch it. For some reason, I never seem to recognize any of the partner names and I can never see a working version of the software. The reality is that 2017 is over and standard startup metrics apply. Blockchain is another enabling technology. You must have a product with users engaging it and line of sight to revenue. No one is going to invest $5M to develop something that will launch 3 years from now.  Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

While unforeseen events can overtake a startup, most CEOs simply don’t plan ahead. For every $1M you want to raise, it will take you one calendar year to raise it. Most of the time, an entrepreneur who approaches me is raising funding today and is looking for a check now.  In some cases, they need their funding within the next thirty to sixty days or something bad is going to happen. Most startups end up educating their investors during the fundraise. I once had an entrepreneur come to me saying, “I’m not raising funding now, but in six months I will be. May I keep you informed of our progress?” Of course, I said yes, because I wanted to see how it turned out. Over the next six months, the CEO sent me monthly updates about his progress. When he launched his fundraise formally, he was able to close it in just a few months.  He used those six months to educate the prospective investors about his deal.   This is a great technique for introducing your deal to a prospective investor.  More investors sign up to track along since there’s no pressure to engage the fundraise. It takes four touches or more to introduce your deal and educate the investor about it.  It’s a great idea to start that process sooner rather than later in your fundraise. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

I recently saw a pitch deck from a seed-stage startup which had a small amount of revenue. The deck claimed a valuation of $50M because a similar company exited at that valuation. I asked his valuation and he claimed $50M because “that’s what my company will be worth.” I reminded him that the example company exited with a $50M valuation had $15M in revenue at the time. He said, “I’ll have that too.” I often see entrepreneurs calculating valuations for today’s’ fundraise using tomorrow’s revenue. Today’s revenue determines today’s valuation. Your business tomorrow determines your valuation tomorrow. Some entrepreneurs have a strong mental block around this. They think their company will one day be worth more, so they should have that valuation today. Investors match investments with the current state of the business. As you increase sales, team, product, and IP, your valuation goes up. The takeaway here- only raise as much as you need to get to the next level. Otherwise, you’ll be raising more funding on a lower valuation which means you’re giving up more equity than necessary. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%. Virality is different from Network Effects. Virality has users inviting other users to join.  Network Effects has the platform increasing in value based on more users participating. I once had a CEO tell me “I wish I had designed for virality rather than revenue.” If you have virality built into your product, revenue will follow. Here are five sources of competitive advantage: Recurring revenue Channel access Platform-based solution instead of singular products Network effects in action (the value of the product increases with the number of users) Virality (not the same as network effects; users invite other users) Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%. Here are five sources of competitive advantage: Recurring revenue Channel access Platform-based solution instead of singular products. Network effects in action (the value of the product increases with the number of users) Virality (not the same as network effects; users invite other users) Most businesses increase in value as the customer base grows as it validates the product/service and encourages others to use it. If a business can harness that customer base and turn it into a community that more aggressively attracts other users then it’s a competitive advantage.  Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%. Here are five sources of competitive advantage: Recurring revenue Channel access Platform based solution instead of singular products. Network effects in action–the value of the product increases with the number of users Virality (not the same as network effects) (users invite other users) A platform-based solution is a competitive advantage over a single product as it provides a solution that works for more than just one type of customer. Platform solutions have a lower cost than single products because you can reuse the research, design, architecture, packaging, and other aspects. Platforms also reduce the cost of supporting the customer as you can reuse support resources. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%. Here are five sources of competitive advantage: Recurring revenue Channel access Platform-based solution instead of singular products. Network effects in action (the value of the product increases with the number of users) Virality (not the same as network effects; users invite other users) Channel access indicates you can connect to a group of customers that others cannot access. Perhaps your previous job gave you contacts throughout the industry that you can now leverage for your startup. Perhaps you have found a social media channel, SEO, email, other marketing channels that work well. It takes some experimenting to find that channel. In your pitch to investors, you want to highlight this as it’s a key differentiator. It may not be a sustainable advantage for the long haul, but it can be crucial to launching your startup. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%. Here are five sources of competitive advantage: –Recurring revenue –Channel access –Platform-based solution instead of singular products. –Network effects in action–the value of the product increases with the number of users –Virality (not the same as network effects) (users invite other users) In today’s world, you would think every business has recurring revenue.  Yet, I find most businesses who are raising funding did not structure their business that way. Recurring revenue helps your business in several ways. It opens up your business to new customers who could not afford your product previously because the one-time payment was too high. By breaking the payment into smaller steps, more customers can afford it. It provides a known revenue stream so you can plan your business better as you know how much you will have coming in. Overall this should increase your revenue in the long run by 30%. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

When I ask an entrepreneur what their competitive advantage is, most point to their product and say it’s better. Of course, they spend ten minutes citing anecdotal stories to “prove” it. My definition of a competitive advantage is that it increases in revenue by 30% over the competition or a decrease in cost by 30%. Here are five sources of competitive advantage: –Channel access –Recurring revenue –Platform based solution instead of singular products. –Network effects in action–the value of the product increases with the number of users –Virality (not the same as network effects, users invite other users) These advantages give your business the ability to scale. Scale comes from revenue increasing faster than cost. In raising funding, competitive advantages can make the difference in closing an investor. The key is to quantify the effects of the advantage in dollars. If you just say you have it then it will convince no one. You must demonstrate with numbers. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies