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Critical Success Factors in Early-Stage Diligence

Critical Success Factors in Early-Stage Diligence

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    Top 5 LinkedIn Groups for VCs

    If you’re looking for a place to find like-minded individuals in a business setting, then LinkedIn groups are a good place to start. It’s a great spot to get and share information, get answers, and even search for or post jobs and business opportunities. As a venture capitalist it’s important to stay connected and on top of news and trends in the industry, so we’ve gathered a few LinkedIn groups to keep you in the know. Venture Capital: Funds, Growth Capital Funding, Business Capital & Financing: WIth 46,525 members, this group is focused on sharing events, connections, and videos as well as resources and training on the venture capital industry. This group was created by Richard C. WIlson of The Miami Family Office, a $500M AUM single family office. Impact Entrepreneur: This group is organized by Laurie Lane-Zucker, founder and CEO of the Impact Entrepreneur Center. It is listed as an official “Best LinkedIn Group” and has 15,914 members. Impact Entrepreneur is in the business of change, and hosts entrepreneurs, investors and scholars who are interested in creative visioning. Startup Entrepreneurs Network: This a group dedicated to networking for startups, investors, VCs, and Angels. SEN has 29,004 members and was started by John Ricci, founder of US Angels, a group that invests in technology, healthcare/life sciences and other sectors across the US. Private Equity Investor Relations, Fundraising, Placement and Investment (and Venture Capital, too):  This is a new group that already has over 31,000 members. It’s for anyone involved in investing, VC funds, and private equity. It’s a great place to post and share articles and insight and to engage in open discussion about current topics. International Wealth Management Group: This group is for networking, discussions and investment opportunities. It currently has over 18,000 members and is open to all, especially those with interest in wealth management. This list just scratches the surface of all of the wonderful groups out there. We think you’ll find that LinkedIn groups can be a quick way to network and share opportunities, opinions, and know-how.   Liza Dickinson is a freelance virtual assistant, writer, and master of keeping people organized. She coordinates TEN Funding events and manages TEN social media outreach.        If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Token Design for an ICO

    The Initial Coin Offering (ICO) uses the blockchain as a new organization unit – a decentralized and self contained mini-economy.  The token is the key access point into the system as the middleman has been cut out.  Designing the token becomes a key part of the new system as it determines the flow of payments and rewards to those using the system. In developing an ICO, one must determine the cryptoeconomics of the token including the maximum number of tokens, value for purchase (usually based on Bitcoin or Ether or an alternate (ALT) coin), discounts for purchasing early, and distribution of the token to founders, backers, developers, and other uses such as marketing, legal, and security. The key to determining the tokenomics is estimating the size of the digital ecosystem and how many players both contributors and users will engage the system and how many transactions they will incur. One should issue enough tokens to run the core system but also consider how the system may grow over time. One can optimize the token for different goals. Most ICOs issue tokens for building out the system and running it in its basic form.  One could take the longer view and price the token to increase usage of the platform, i.e. setup a price that matches the value the user receives. Similarly, one could price the token to encourage developers to build out the digital ecosystem around the ICO. It can be difficult to develop a plan for the entire life of the blockchain system envisioned so one may consider issuing another type of token later that give a higher level of access to the digital system since it may be in a more mature state. One may also issue different types of tokens to give unique benefits to users.  As the system grows, new applications and higher value benefits will become available.     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.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Whitepaper

    In the world of the Initial Coin Offering, the primary document is called the Whitepaper which covers the key elements of a blockchain-based, tokenized system and associated token sale. Since most projects are in the early phase – conceptual/prototyping, the whitepaper contains not only the business fundamentals, but also the technical underpinnings to the project. Here’s a list of topics to include your whitepaper. Introduction with problem description–set the context for the ICO with the problem you are solving. It helps your case to use numbers to make the problem more specific. Solution—describe your solution and how a tokenized, decentralized blockchain system solves the problem. Technology background—show the technology plan behind the solution.  At a high level show how you plan to attack the problem. Team—show the team especially the technical members who will build the system. Token Description— show how the token works with the proposed system.  Those who contribute receive tokens while those who draw value from the system are contributing tokens. Sale methodology & Redemption process—Show what the tokens cost and how one signs up to buy those tokens. This also includes maximum number of tokens as well as discounts for pre-sales and bounty programs.  In addition describe future redemption plans based on lockup periods. Market size and competitive analysis—show the size of the market you are pursuing and what portion of the market your solution addresses. Security Considerations – show how your token relates to securities laws and if your backers must be accredited investors? Potential Risks – outline the risks in the project including technical, marketing, and otherwise. Disclaimer—list the caveats for the token backer including securities issues. Since the ICO focuses on blockchain technology and the industry is in its early stage, the two key elements backers look for are a strong technical team, and a compelling use case that doesn’t require a tremendous amount of infrastructure to be in place.     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.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Learn how to mitigate fraud at the Texas Venture Forum

    Fraud is an increasing challenge for small business owners. One type of fraud occurs when a new customer or client signs up for your online service, and then later turns out not to be who they said they were. This type of fraud costs small businesses every year. As business transactions have moved online, we are now finding that FinTech tools can introduce increased liability for small business owners. In the Texas Venture Forum, we’ll hold a panel on this topic and hear from one small business owner who was hit with fraud.   In this panel, we’ll propose an identity management solution: the Data Co-op.  What if a small business owner could verify a potential customer or client by asking another business in the community?  The members of the Co-op will have the ability to propose potential client/customer names to the Co-op network to verify if any other business is currently working with that person.  If so, then the likelihood that person is who they say they are is high.  If no one is working with that person, then additional due diligence can be done before taking that person on as a client/customer. The panel “How to Mitigate Fraud for Small Businesses” will be held at 2pm.

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    5 Key Terms in the Blockchain World

    Blockchain is a digital currency used by both Bitcoin and other cryptocurrencies and is currently gaining momentum around the world. Investors as well as people in the technology industry are all abuzz about how it will change the way we invest. Blockchain works not only with Bitcoin but also embraces other cryptocurrencies that followed. Although Blockchain has gained momentum since its invention, it’s still a new and inventive technology. To get a better understanding of this technology it is important to understand some key terms. Below is a glossary of terms relevant to the Blockchain world for the beginner. Blockchain: This is a digital file distributed to everyone that participates in a cryptocurrency network. It basically acts as a digital ledger that keeps track of any transactions that happen within the network. The network cryptographically sealed to prevent anyone from tampering with it. Bitcoin: One of the forms of digital currency with no central bank, that is distributed directly between individuals. This cryptocurrency is also the most popular of its kind. Cryptocurrency: This is a term used to describe any digital currency that, just like Bitcoin, is used peer to peer and has no central bank. Cryptocurrency networks keep track of all transactions to ensure individuals and investors don’t renege on a deal. Peer to Peer: In a normal financial transaction between two individuals, money is typically transferred using a bank as a third party to complete the transaction. In the Blockchain world, there is no middleman, and individuals make direct ‘peer to peer’ transactions using technology, to cut out the need for a bank. Smart Contract: A contract agreement that, once signed, cannot be altered. Normally a contract would be drafted by a lawyer and the parties involved agree and sign. Smart contracts are programmed and will perform any specified actions or enforce penalties as they arise. This technology allows room for less miscommunication between two parties.

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    NSS Labs Raises Funding From Texas Venture Growth Forum

    A critical step for companies seeking growth-stage investment is making connections with venture capital firms and other investment groups who are looking to get involved in promising businesses. That’s been especially true for companies in Texas for years, as the lack of a conference that could bring founders concentrated in Texas together with potential funders. Thankfully, that has changed after the first annual Texas Venture Growth Forum – a conference held in Austin and presented by Texas Entrepreneur Networks and Hermes Investment Group – that served as a two-day “speed dating” event for entrepreneurs and investors. Many connections were made between representatives of the 27 companies and 42 investors who attended, with a recently announced Series B investment of $16 million in Austin-based NSS Labs as one of the biggest success stories from the gathering. That deal saw LiveOak Venture Partners and Delta-v Capital team to help NSS Labs continue to grow as a leader in the information security industry. Venu Shamapant, a general partner with LiveOak, selected five businesses his company had early stage investments in to attend the conference in hopes of finding partners who could help them grow to their full potential. “We’d identified the best companies that were in the right stage to get in front of people who were looking to become involved in a growth-stage company,” Shamapant said. “For some of them maybe it wasn’t exactly the right time to do a deal, but they got to start building relationships with late-stage firms and that makes it easier to re-engage when the time is right.” Shamapant said the conference and its emphasis on capital for Series B and growth will help the investment climate in Austin and Texas as a whole move beyond its recent emphasis on startups and early stage funding. “The focus has been on been on early stage companies, but you think of it sort of like a pig moving down the snake… now there are companies that have progressed to the Series B stage,” he said. “The conference is focused on fixing that and being a catalyst so more interactions happen and people are talking to each other continuously.” Dan Williams, vice president of Delta-v with offices in Dallas and Boulder, said he went into the conference looking for companies with more than $20 million in revenue and operating at or close to break-even financially. NSS Labs fit that profile and is concentrated in information security, which has been an interest of Williams for many years. He said he and other investors were pleased to learn that Texas finally had a geographically focused investor conference akin to similar events in cities like San Diego, Atlanta, and Denver. “It’s great to see a community coming together there and for a tech hub that’s as prominent as Austin is, it’s great to have an event that brings the right people together,” he said. “A conference is nice because the leads are immediate and you can move forward from there, whereas most other times deal flow comes from relationships and networks and that is a much longer process for everyone.” The timing of the fall 2015 conference was perfect for NSS Labs’ CEO and president Vikram Phatak and his management team, who had just decided to pursue a Series B round. The $16 million from LiveOak and Delta-v will let the company expand its offerings, build its customer base and grow its headcount from 70 employees to more than 120 by 2019. Phatak said the conference setting offered a “pre-filtered” selection of possible investment partners, with 15 meetings that eventually led to a deal. “A conference allows you to very efficiently check off the ‘no’ box for a lot of people, so you can be as efficient as possible with your time and focus,” Phatak said. “What it did for us is put us in front of people who had an interest but who we might not have met otherwise.” With the Austin and Texas entrepreneur community being fairly close knit, Phatak expects word about the advantages of attending to grow as the second event nears. “I know several smaller companies that as the conference gets closer I’ll reach out to their investors and encourage them to have their companies go to it,” he said. “You look at something like TechCrunch in the bay area and that’s a place where deals happen, and it gets a reputation, and then more deals come about because of that.”  

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    Top 5 Twitter Accounts for VC Reading

    Being a venture capitalist is not for the faint of heart. To be successful, it’s good to stay on top of news and trends in the industry. To keep you up-to-date on-the-go, we’ve compiled the top 5 VC Twitter accounts to follow to get a wealth of information—and inspiration! Mark Cuban: It’s hard to think of investing and NOT think of our favorite shark, Mark Cuban. He’s an avid Twitter user and posts about his latest investments as well as useful tips. You can follow him at @mcuban – it also doesn’t hurt if you’re a Dallas Mavericks fan. Jason Calacanis: @Jason is an angel investor with an impressive list of investments, including first round investing in Uber and more than 60 other startups. Calacanis is not only great on Twitter, he is a self-described serial entrepreneur with a blog full of useful information for investors. Kevin Rose: @kevinrose is not only the founder of Digg, an internet news aggregator that specifically selects stories for readers based on interest, he is a partner at Google Ventures. His Twitter feed brings light to new and interesting companies and projects. Peter Fenton: @peterfenton is a Silicon Valley-based VC and Twitter board member. Fenton was named one of the top 100 technology investors and has worked his way up the list over the years. His tweets are full of news, and provide a look into his life. Reid Hoffman: @reidhoffman is a VC, entrepreneur and co-founder of LinkedIn. Reid was ranked in Forbes top list of the world’s billionaires (#631), so he knows a thing or two about investing. His feed shares news and links as well as opinion. In 140 characters or less, you’ll gain first hand knowledge of the investment world and thoughts from insiders and innovators.

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    Top 5 Podcasts for Investors

    With so much information out there for investors, it’s good to stay on top of your game and learn any new and fascinating trends in investing. We’ve searched for a few of the top podcast to keep your ears on. We hope you enjoy! The Twenty Minute VC: Venture Capital | Startup Funding | The Pitch:  The Twenty Minute VC takes you inside the world of Venture Capital, Startup Funding and The Pitch. They help you learn how to get funding for your venture by letting you know what investors are looking for. Not only do they give advice to startups, but they also help new investors learn the ropes. The Investors Podcast:  This podcast focuses on one premise: the best way to improve your skills as an investor is to study billionaires and share their habits for success. The Investors Podcast talks about investing strategies as well as how the big guys make their money. Angel Investing with Tatyana Gray:  Host Tatyana Gray interviews the most elite angel investors and discusses strategies, breakthroughs and cutting-edge technology. This podcast is a great resource for learning the ins and outs of angel investing. The Full Ratchet:  This podcast was created after host Nick Moran grew frustrated with the confusing nature of the investing/fundraising process. After speaking to many VCs and angel investors, he decided that the knowledge he gained was worth sharing with others in the same situation. The Pitch Deck:  Host Gavin McCulley helps discover real insights from experienced Angel and VC investors that take chances on young companies as well as expert founders who have raised the cash they needed to take their company to the next level.

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    Top Investors in Texas HR Technology

    Technology is changing the way HR operates in the modern world. Here are the top 10 investors in Texas HR Technology companies. The top 10 companies are Accel Partners, Techstars, Right Side Capital Management, Greylock Partners, Austin Ventures, Social Starts, TCV, Salesforce Ventures, IDG Ventures USA and Silverton Partners. Company Name Description Headquarters Location Accel Partners Accel is a leading early and growth-stage venture capital firm, powering a global community of entrepreneurs. Palo Alto, California Techstars Techstars is a Worldwide Network that helps entrepreneurs succeed. Boulder, Colorado Right Side Capital Management Right Side Capital Management invests in capital-efficient, seed-stage technology startups across the U.S. in every technology sector. San Francisco, California Greylock Partners Greylock Partners backs entrepreneurs who are building disruptive, market-transforming consumer and enterprise software companies. Menlo Park, California Austin Ventures Austin Ventures is a venture capital firm investing in early stage and middle market companies. Austin , Texas Social Starts Social Starts is a $60M+ venture partnership that invests at the moment-of-inception and Series A. San Francisco, California TCV Founded in 1995, TCV is a leading provider of capital to growth-stage private and public companies in the technology industry. Palo Alto, California Salesforce Ventures Salesforce Ventures invests in the next gen of enterprise tech to help companies connect with their customers in entirely new ways. San Francisco, California IDG Ventures USA IDG Ventures USA is an early-stage venture capital firm for enterprise IT and consumer founders. San Francisco, California Silverton Partners Silverton Partners is people-driven in their investment strategy. They back exceptional teams who not only have the talent to identify and execute on exciting opportunities but can also pull off the mid-course corrections that are inevitably required in an early stage company. They focus on executive leadership, execution ability and domain expertise in our assessment of teams. Austin, Texas  

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