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How To Start Investing Busting The “One-Size-Fits-All” Myth

2 min read There’s a lot of information out there about how to start investing. As a new investor entering into an unfamiliar field, it can be confusing and overwhelming when figuring out where to begin. Unfortunately, this is why many first-timers fall prey to the “one-size-fits-all-myth”. But the truth is that there’s no right way and there’s no wrong way to do it. There is no “one-size-fits-all” for investing. Different approaches work for different people, and what it really comes down to is finding the best approach that works for you. Ultimately, your approach to investing in Startup A should in fact be different than Startup B. With this new perspective, we hope you can confidently go out into the field and make informed investment decisions based on the specific company you are planning to work invest in.  Why Can’t One Size Fit All Startups? For starters, not all startups are even the same size. I’ve learned over the years that where you are in the world molds your definition of what counts as a startup.  In Austin, if you have a great idea, and two people working on it, then you’re a startup.  In Dallas, if you have $1M of revenue, then you’re a startup. If you have less than $1M then you don’t exist.  In Shanghai, if you have $10M of revenue then you are a startup.  I once heard a fund manager refer to a $20M company as a startup. What makes entrepreneur communities vibrant is their inclusion of all players in the ecosystem, not just those with substantial traction. Startups with differing levels of experience and revenue streams require different investment approaches. Growing Number of Potential Deals In the past, angel investors followed the one-size-fits-all approach, writing $50K to $100K checks for the deals that looked promising.  If the deal went well, they would write another $50K or $100K check to add on to their investment.  However, in today’s world, there are so many deals that it’s hard to invest this much into each deal unless you know it’s going somewhere. This is another reason to approach each startup as a unique investment opportunity. An Easy Rule of Thumb The one-size-fits-all investment approach is a likable theory due to the fact that it makes investing easy. But if there isn’t one solid approach to startup investing, and there isn’t even a standard definition of what a startup company is, then how do you know what to invest where? We’ve generated a rule of thumb for you to follow in future investments. But keep in mind, each scenario is unique, and you may need to just go with your gut. In most cases, we advise to invest: $2500/deal for a seed company $5000/deal for a growth company $10000/deal for an expansion company Feel free to try out our calculators and contact us if you would like to discuss your fundraise: http://staging.startupfundingespresso.com/calculators/ Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

New Investor Risks

1 min read As a new investor, entering into the world of investing can be an exciting time. Opportunities can seem limitless, and they are, especially as the world’s talent pool continues to expand in ways we’ve never seen before. When you’re just getting into the game, there are a couple of steps you can take to increase your chances of success. The first thing you should remember is: Networks are a priceless resource for countless reasons, especially for a new investor. One of the main advantages of a robust Network is having a place to ask questions. The more questions you can ask, the better. When you’re just starting out, you’re going to spend some time in a learning phase. Take this time to soak up all of the information you can; a good network will make all of that information available to you. All you have to do is ask and be open to learning. Another vital thing to keep in mind at the very beginning is: Don’t get overexcited. You might find a few companies with a solid pitch and great founders. The founders are excited, so you get excited, too. Inevitably, new investors who are too eager will write a check to startups who will, as most do, close their doors. This outcome is simply the nature of the space. A number of the startups you invest in will fail because, no matter how much you want them to be a winner, the startup world is a numbers game. Often, this leads to frustration, and many investors choose not to re-engage in the investment world because they feel they’ve “been burned.” However, you can minimize the potential risk. Instead of getting caught up in the excitement, try to take the first 6-12 months to familiarize yourself with the ecosystem. Ask a lot of questions and then write your first check. Continue to learn and ask questions along the way. Focus on building your portfolio slowly and with the correct education. In the end, this will help reduce the risk of failure. Read more: http://staging.startupfundingespresso.com/education Hall T. Martin is the founder and CEO of the TEN Capital Network.TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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