Stages of Technology Adoption

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

Technology adoption goes through several stages over the life of that technology.

Here are the steps of adoption:

Unknown -- no one knows the technology.

Awareness -- some hear about it but don't know what it is.

Understanding -- those who know it understand how it works but don't know what to do with it.

Belittlement -- those who know it consider it an underperforming technology and discard it as a toy.

Usefulness -- some users find use cases for it.

Repeat usage -- more users find it helpful and use it repeatedly.

Designed in -- the tool becomes embedded into the workflow and is used constantly.

Locked in -- the tool is something the user has no choice but to use.

Regulated -- the tool becomes so prevalent that it attracts regulatory oversight.

In building your product, consider these stages for marketing the technology behind your product.

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.

_________________________________________________________

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Acid Test for Startup Valuation

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

Valuation is a key negotiating factor in startup investing.

There are many valuation models available.

The most common is the use of comps or comparables to see if the valuation is at market rate.

Consider using the acid test for startup valuation.

The acid test for startup valuation compares the money invested so far to the proposed pre-money valuation.

Some call this the Money-in method.

To calculate this value, take the pre-money valuation and divide by the total funding to date.

Total funding includes founder funding, investor funding, and non-dilutive funding such as grants.

This yields a factor.

A factor in the low single digits is a conservative valuation.

A factor in the double digits is a speculative one.

Most investors look for a factor in the single digits to make an investment.

Anything in the double digits requires more investigation to understand the value proposition of the business.

Consider this metric in reviewing the valuation of a startup.

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.

_________________________________________________________

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Innovation Looks Trivial in the Early Days

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

In the early days of a startup, innovation can look trivial.

Innovation is often applied to the lower end of the market.

New technologies often start as simple devices or applications.

These devices have minimal functionality and lack robust features.

In vetting startups, look past the minimal functionality to the rate of change of the technology.

While today it may seem trivial, a fast growth rate can move it into a more competitive position.

Look at the underlying growth driver.

For example, semiconductors double their density every eighteen months.

Genomics brings an even higher growth rate.

It's these drivers that determine the trajectory of a startup's product.

Startups that leverage growth drivers are positioned to succeed over time.

The incumbents often dismiss startups because their initial solution underperforms the current competition.

Over time, the startup's product will outperform.

Consider this in evaluating 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

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Hiring a Professional CEO

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

Startup founders take the CEO position because they bring the vision and passion to launch the company.

They know the domain and are building the core product and go-to-market strategy.

They are the ultimate authority at the company.

As the company grows and then scales, there comes a time for a professional CEO.

Here's a list of key characteristics to look for in a professional CEO:

One who has experience managing a large company.

They've grown and exited companies in the past.

They bring a network to the process for growing the company and finding an exit.

They know how to transition the company from the founding CEO.

They are good at processes and programs.

They understand the product development process and can manage it in the company.

Founders are often at their best in innovating and launching startups.

They often do better by turning over the reins of the business to a professional CEO when the company no longer needs the founder's skills.

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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How Startups Can Make Better Forecasts

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

Forecasting is a key skill founders need for raising funding.

Investors want to know the founders' expectations for the business with the funds raised.

Here are some key steps to make better forecasts:

Start with a baseline.

If the startup has revenue, then use that as the starting point.

If the startup is pre-revenue, then look to similar startups to set a baseline.

Determine the drivers behind the revenue.

This could be leads generated, clients viewing a demonstration, or other.

Determine how much can be done with the team proposed.

Focus on the customers signed up rather than a percentage of the available market.

Use the sales cycle for the product to determine lead times.

The more you know about your customer buying cycles, the more accurate your forecasts.

This is called a bottom-up analysis.

For predicting explosive growth, look for trends in the market that can drive hyper sales growth.

Look to other startups for their sales forecast to calibrate your own.

Consider these points in making better forecasts.

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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How To Build an Elevator Pitch

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

The elevator pitch is the short form of your startup pitch.

It introduces the deal to an investor and gives the key highlights.

The goal is not to tell them everything but rather to intrigue them to learn more about it.

Here's how to build an elevator pitch:

State in five words or fewer what the startup does.

Show two examples of the impact of the startup using numbers.

This could be exploding revenue, such as "We're seeing 50% month over month growth."

It could have an impact on the community, such as "We help feed 5000 children a week."

State the goal of the startup, such as "We're looking to reach a break-even in 4 months."

Choose three words that best describe your startup and work them into the pitch.

Choose three phrases that best describe your startup and build them into the pitch.

The keywords will help the audience understand the context.

The catch phrases will help the audience understand what the startup does.

Consider these steps in building your elevator pitch.

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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The Nuances of Pitching

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

In pitching investors, there are key nuances that can make or break the pitch.

Here is a list of nuances to consider when pitching:

Use the pitch to build a collaboration.

Funding is a part of it, but not the only thing.

Start your pitch with your core value proposition.

State in plain language what your company does.

If you have revenue numbers, build the pitch around them.

Showcase the growth story with a graph showing a curve going up and to the right at 45 degrees.

If you don't have revenue, then build the pitch around the key insight you have into solving the problem.

Don't avoid the risk factors.

Instead, focus on how you are mitigating those factors.

Don't avoid the competition.

Instead, show how the competition validates the market.

Show how this raise will set up the business for the next round and is a part of an overall strategy.

Consider these nuances in building your pitch.

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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For Investors check out: https://tencapital.group/investor-landing/
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Key Skills for a Startup Founder To Have

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

Successful startup founders share several key skills.

Here are the key skills for a startup founder to have:

They have access to the networks that are vital to their startup success.

This includes investor networks for funding and customer networks for buying the product.

They are flexible.

They can pivot the business when the market changes or they discover a better one.

They are persistent.

They stick with it during the down times as well as the up times.

They take calculated risks.

They understand the downside cost as well as the potential upside reward.

They know their numbers.

They know their key numbers that are critical, such as cash runway.

They have focus.

They know what the must-dos are and focus on them.

They constantly learn.

They are always learning new things and find it a part of the startup life.

Consider these skills in a startup founder before investing.

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/
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