Make Sure the Convertible Note Has a Conversion Point

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

Convertible notes are useful tools for fundraising.

They are easy to set up and often don’t require much legal work.

The best part is they don’t require a valuation to be set.

Instead, a valuation cap is used to give assurance to the investor that the valuation will not be set at an unreasonable level.

Most convertible notes convert on a subsequent round funded by equity.

In the event there’s no follow-on equity round, then the note should convert at the maturity date.

This is most often at year 3 or 5 from the start date.

One of the drawbacks of some convertible notes is that they don’t set a maturity date.

In reviewing a convertible note, make sure the note sets the maturity date and converts at that point.

This ensures the investor receives the equity stake.

For startups, this is also an important issue, in that the note left in debt form means the investor could demand their investment back with interest.

Review your convertible notes for the conversion point.

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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Talk to Investors As if They Were Already Partners

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

First-time founders often spend their pitch time selling their product.

This fails as it doesn’t focus on the other elements of the business the investor needs to know, such as the team, the market, the competition, and more.

It treats the investor as a customer.

They are not buying the product; they’re buying a part of the company

Instead of selling, try treating the investor as a partner.

This approach positions the investor as a collaborator.

Start by telling the investor your story.

Engage the investor by showing where you are with the business.

Show why this business matters and is making a difference.

Highlight your progress with customers.

Talk about the challenges with the competition.

Invite them to join the effort.

It’s important to build a connection with the investor.

Selling is transactional.

Partnering is collaborative.

Treat the investor as if they were already a partner in the business.

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/
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Key Steps to FDA Approval for a Therapeutic Drug

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

FDA approval is a lengthy and involved process with therapeutic drugs that startups must go through.

Here’s a list of the key steps to achieve FDA approval:

After basic research, the founder applies for an Investigational New Drug Application called an IND.

The founder takes the proposed therapeutic or drug through four phases of clinical trials.

Phase 1 is for safety testing.

Phase 2 is for effectiveness.

Phase 3 focuses on additional safety testing to determine side effects.

Phase 4 focuses on additional efficacy tests.

After testing comes the New Drug Application or NDA.

The FDA reviews the NDA, including the clinical data and research, to determine approval.

There are fast-track paths for drugs that treat serious medical conditions that have no current solution.

There is also a breakthrough therapy path for drugs that show substantial improvement over the current solution.

For investing in therapeutic startups, consider the FDA pathway for the drug and where it currently resides on that pathway.

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/
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In this episode of Investor Connect, Hall Martin speaks with Abdul Golden, an investor, operator, and mentor with a rich background in deep tech and entrepreneurship. Abdul shares the founding story of Shujaa Capital, his venture capital firm focused on democratizing tech investing for diverse and underrepresented founders, especially in undercapitalized regions like Africa. He highlights the undervalued opportunities in these markets and discusses the importance of financial impact and ethical practices in venture investing.

Abdul also touches on the emerging trends in minority-led startups and the evolving investment landscape in the US. He offers insights into how Africa’s young demographics and leapfrogging of legacy technology systems present unparalleled opportunities for economic growth and technological innovation.

This episode provides valuable perspectives on investing in emerging markets and the pivotal role of passionate, systematic approaches to making impactful investments.

Visit Shujaa Capital at www.shujaacapital.com or www.linkedin.com/company/shujaacapital

Reach out to at abdul@shujaacapital.com

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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Preparing for a Crowdfunding Raise

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

Crowdfunding is a viable method for raising funding for a startup.

Here are some key considerations before pursuing a crowdfunding campaign:

Platform choice.

Look for the appropriate platform for your startup.

There are large platforms that are commonly used and many smaller ones that cater to niche audiences.

Look at the fees associated with the platform and their level of support for finding investors.

Most platforms provide for about 1% of the fundraising.

Marketing platforms.

Most crowdfunding campaigns require a network of 10,000 contacts or more to achieve initial success.

Look for marketing platforms that can generate more contacts at a cost-effective price.

It’s not unusual to find that social media and email marketing cost 20% or more of the fundraising.

Content creation.

Look for resources that can help generate the required content, including pitch decks, updates, digital assets, and social media posts.

Consider these steps before launching your crowdfunding campaign.

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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Key Metrics by Stage

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

Investors use metrics to understand the performance of the startup.

Here’s a list of key metrics by stage:

Pre-seed. User engagement with the prototype.

Since there’s no revenue-generating product, look at how often and how long the customer engages with the prototype.

Seed. Initial revenue traction and cash spend

Track month-over-month growth rates and how much of the revenue is recurring.

Look at the burn rates of the company to see how much runway they have.

Seed+ Continuing revenue traction and more efficient use of capital.

Startups often raise an additional round after the seed raise.

The funds continue to grow the revenue, and the company should see a lower burn rate.

Series A. Revenue run rate with an increase in retention.

The company should be finding product market fit, and so more revenue should come from retention.

Series B. Revenue run rate with a greater increase in revenue than in cost.

The company should continue to grow the business, but the costs should flatten or decrease on a unit economic level.

Consider these metrics in reviewing 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.

_________________________________________________________

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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How To Make Your Pitch Deck Look Professional

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

There’s a big difference between an average pitch deck and a great one.

The great pitch deck sends the signal that you are an above-average startup.

It shows class and status over other companies raising funding.

Here are some key steps to make your pitch deck look great:

Add an investor disclaimer about investor solicitation.

While this is not often done, it signals the founder knows something about securities law.

Use a professional graphics designer to polish the deck.

This shows you care a great deal about how you are perceived by the investors.

Use uniform glyphs from the same source with a common look and feel.

The grab bag of icons found on the internet can look clunky.

Spell check your pitch deck to make sure you don’t have any mistakes.

Include sources for key slides, such as the Total Available Market and any assumptions built into the financial forecast.

Make good use of charts, tables, and graphics.

Otherwise, the pitch deck will come out looking word-heavy.

Make clear the ask in the deck to show the investor the next step.

Include these steps in your pitch deck preparation.

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/
For eGuides check out: https://tencapital.group/education/
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For Feedback please contact info@tencapital.group

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The Key Component to Investor Updates

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

Updates to investors throughout the fundraise campaign are a must.

Investors want to know you are making progress.

It’s important to send weekly or monthly updates about progress on sales, team, product, and fundraising.

The key component to investor updates is to show you have a plan and it’s working.

The updates on sales, team, and product show you have a strategy in motion.

The updates should highlight the momentum and progress the startup is making.

In the very early stages, investors will focus on sales to see if anyone will buy the product.

After that, the investors look at the plan to see if it is building.

This may include shipping products, signing partners, engaging prospects, or closing customers.

Show how the plan has a strategy built in to grow the business and later scale it.

After the initial launch, investors will look for more than just selling the product.

They will look to see that revenue continues to grow, gross margins continue to climb, and cash burn continues to shrink.

Make sure your investor updates showcase how your company is achieving the plan.

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/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.