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    5 Investor Questions You Should be Able to Answer

    September 21, 2021

    2 min read Securing funding is one of the most difficult and yet most important aspects of launching your startup successfully, so what investor questions should you prepare for? Before diving in, investors are going to want to do their due diligence and ensure that your organization is worth the risk. Before you approach investors you should know enough about your startup to answer the following five questions. What is your value proposition? This is the feature that makes your product or service stand out from the rest. The answer points out what your company provides, and why people want it. Will customers pay for the solution? Free usage is not hard to achieve- but the ability to secure paying customers is required. Investors want to know if customers will pay for your solution, therefore producing a profit to be shared. Who is on the team? About half of an investor’s decision comes down to believing in the team and knowing they will be enough to reach the goal. The team should be able to tell who is in charge of what business functions, for example, marketing, sales, R&D, etc. Why is now the right time? Is there anything in the deal that suggests now is the right time to start this business?  Why hasn’t someone done this before? Showing that there is a current need to be filled, problem to be solved, or demand to be met is necessary. What is your exit? This is one of the hardest questions to answer. If you need or choose to exit, what will this look like, and how will the investor get their money back? There you have it- the top five questions a startup needs to be prepared to answer when meeting with a prospective investor. We suggest typing the answers to the above questions out so that you and your team are fully prepared! 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

    10 Reasons an Investor Will Pass on Your Deal

    September 12, 2021

    2 min read  Investors see many deals and can spot glaring holes immediately. Here are ten main reasons an investor will pass on your deal: No Traction. You need to show some evidence of market validation. Even without a sales team and a marketing budget, there should be some demand for your product. No Social Proof. There needs to be some evidence the product works. The Team Doesn’t Fit. If there are major holes in the team or you’ve filled the secondary roles and left the primary ones empty, then it’s going to be a problem. Criteria Don’t Fit. Many funds are clear about what they invest in (SaaS, Healthcare IT, etc). Your deal needs to fit into one or more of those criteria. You Don’t Know Your Market. Those with a vague or fuzzy knowledge of the market or customer will have difficulty raising funding. The ability to site numbers (market size, growth rates, customer spend, etc) helps demonstrate your knowledge. Financial Projections Don’t Add Up. Some startups use the excuse that they can’t predict the future and therefore they have no financial projections. Most investors see this as a lack of knowledge about the business and the market. Fuzzy Business Plan Some plans are filled with future possibilities and great opportunities but fail to define the core product and how it will be built and sold. Investors can spot a lack of focus on the business plan a mile away. No “Use of Funds”. The phrase “I’m raising $1M” often triggers the bull meter because the fundraiser rarely knows how they’ll apply the funds. No Validated Business Model. There’s no evidence of a business either in product or customer activity. Lack of Follow-Up. Surprisingly, an investor will express interest and then never hear from the entrepreneur again. It can take several follow-ups to close an investor. TEN Capital has created a series of calculators to help you see how your startup compares to industry standards. You can discover if you are ready for funding, see how your deal will be seen by investors, learn how to set the price for your next raise or exit, or calculate how much TEN Capital can save you on your fundraising campaign. 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

    Successful Fundraising Habits

    September 5, 2021

    2 min read The best startups demonstrate key successful fundraising habits that can be easily replicated if you are willing to put in the work. Here are some of the key habits that will help you hone your fundraising ability: Goal setting. Know what you want from the overall raise and break it down into stages. The entrepreneur who vaguely requests $1M has not yet thought through the use of funds and most likely needs less to get started. Setting (and sticking to) a budget. Set up a timeline and budget for raising funding, and then stick to it. This is a regular (daily and weekly) exercise, not a “some time” or “whenever” thing. Calendar consideration. Starting a raise in the middle of summer or just before Thanksgiving is going to be difficult. Plan the launch of your fundraise with the investor’s schedule in mind. Knowledge of target audience. Understand the target investor and what they are looking for. It’s a good idea to see what they have already invested in and approach them from that angle. Document preparation. Spend time preparing investment documents. Make sure each document, your executive summary, pitch deck, and financial projections, are ready to go so that when an investor expresses interest you can provide them. Pitch practice. Successful fundraisers practice their pitch. Have yours well-honed and know it cold. Working the plan. Create a plan and then work the plan. Have a list of prospective investors and continually work investors through the process. Focus on metrics. Keep track of the numbers in your campaign. Know how many prospects you have and how many you need to achieve your goal. Asking for feedback. Ask investors for feedback. Be open to feedback from investors and others on your pitch and campaign. Demonstration appreciation. Solid fundraisers demonstrate appreciation. They show appreciation to those who help them in their fundraise. Fundraising is a skill just like most other aspects of running a business. These skills can be learned and honed. To learn more about the fundraise process, check out our Edu section: 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

    5 Signs Your Startup Isn’t Ready to Raise Funding

    August 31, 2021

    2 min read  So you want to raise funding, but are you ready? Here are 5 signs that you may not be, and how what you should do. Your Vision is Fuzzy. Investors will not be too interested if the vision is still fuzzy and hasn’t come into focus yet. if you’re still sorting out the market and your position in it, then you need to gain more clarity on the space and your company’s position. The Team Isn’t in Place Yet. if you still have major holes in the team that you are seeking to fill, you need to find candidates for those positions before funding. Investors will not invest in an incomplete team. No Repeatable Business Model. Before starting a fundraise, you must identify the repeatable business model. if you’re still pivoting from one business model to the other then you’re not ready for investors. At this stage, the business model must be predictable at some level. Financials are Not Under Control. You are definitely not ready to raise funding if you don’t have your financials under control. If you don’t know how much to budget for expenses or what the impact of a sales increase on your bottom line may be, then take some time to prepare those financials and be ready to present that information to investors. No Clear Path to Profitability. If you can not show a clear path to profitability (if you don’t see how you can grow to a profitable position with your current business model) then you’re not ready for fund raising. Investors want to see how and when you will be profitable before making an investment decision. TEN Capital has created a series of calculators to help you see how your startup compares to industry standards. You can discover if you are ready for funding, see how your deal will be seen by investors, learn how to set the price for your next raise or exit, or calculate how much TEN Capital can save you on your fundraising campaign. 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

    Should you Raise Funding?

    November 6, 2019

    1 min read Should you raise funding and if so, how much should you seek? Funding helps accelerate what you already have going into your business. You should have a core process for acquiring customers and providing a service. If you don’t have it then funding at this stage will only hurt your business. It’s best to continue testing your core business model until you know it works. Keep in mind that it’s important to find the best channel for acquiring customers and at the most efficient cost. By stating your core business in numbers, you now know what it costs to grow your business. Then ask yourself, what is the best source of funding for your business? In addition to equity funding, you may consider debt financing, self-funding, or bootstrapping. Debt financing requires you to pay back the loan but after you do so, you own the business outright. You could self-finance, which means you put in your own money, or you could bootstrap it, which is another way of saying ‘find a customer who will pay for your product/service’. I call this customer funding. For this, you may need to offer additional services at a higher price to cover the startup costs but is a great way to grow your business as it keeps you focused on your product and customer. If you decide to raise funding, how much should you raise? Raise enough so that it will take your business to the next level. Think about the position you need to achieve to raise the next round of funding. Your fundraising should take you there and set you up for the next raise. Your valuation in any startup is low at the beginning. Raising too much money at a low valuation will end up giving away too much equity. For those with larger fundraises you may want to break it down into several milestone steps in which case you can raise your valuation for each step as you achieve more revenue. Read more in the TEN Capital eGuide: http://staging.startupfundingespresso.com/how-to-raise-funding/ 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

    How to Raise Funding

    September 26, 2018

    1 min read How to raise funding: a little at a time. Traditionally fundraising takes a tremendous amount of time on the part of the startup CEO. Some CEOs drop everything to run the fundraise. I advise against spending too much time fundraising but rather set up a system to help with the fundraise. With the right use of online tools (analytics, CRM, Drip campaigns, etc.), the CEO doesn’t have to let fundraising become a huge distraction. Building a list of investor prospects and keeping them informed of your progress, the CEO can reach out to ask for an investment at the right time. Instead of raising two year’s worth of funding, the CEO can raise a few months, which is a great deal easier. This type of funding works best for early-stage and those with recurring revenue business models. TEN Capital helps startups raise funding through online tools. TEN Capital helps startups raise funding through online tools (sourcing investors, prepping documents, and running campaigns). These techniques were popularized by crowdfunding but can be applied to accredited investor raises as well. As investors see more and more deal flow, they need help finding, qualifying, and following up the deals. At TEN Capital, we let the investor select the deals they want to see and then send updates only on those deals. We work with the startups to build updates to share with interested investors. All of this happens online. At some point, interested investors set up a call to talk with the CEO, and later they decide to invest or pass. Most of this process, if not all, takes place online. Read more about the TEN Capital Fundraise as a Service Program: http://staging.startupfundingespresso.com/company-landing/ 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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