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Successful Fundraising Habits

Fundraising /

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: https://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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5 Signs Your Startup Isn’t Ready to Raise Funding

Fundraising /

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: https://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

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Do I Have a Venture Deal?

Fundraising /

1.5 min read Do I Have a Venture Deal? If you are having a hard time deciding if your venture business is worth investing in, or are just not sure how to value your venture, we have a very handy tool to help you secure an investor with confidence. Well, Do You Have a Venture Deal? Before using the calculator, consider if you have a deal that’s in the game for venture funding by asking these questions: Is it a high-growth company? Is it scalable? Do you have an experienced team ready to join? Do you have a platform-based business, or is it a single product? Do you have recurring revenue? Do you have virality built into it? Do you have network effects in it? Are you addressing a large market? Do you have a clear competitive advantage? The more you can answer yes to these questions the more you have a venture business that qualifies for venture funding. TEN’s Venture Funding Calculator This can be a lot of information to sort out, so we’ve come up with an easier way: our Venture Funding Calculator. Just answer a short list of questions and automatically get results showing how fundable your company is. The calculator provides a quantitative score of how investors, like VCs, angels, and family offices, will value your deal based on the team, product, revenue model, value proposition, exit potential, and other characteristics of your startup. Scoring levels: 90-100: Strong venture interest 80-90: Medium venture interest 50-70: Some venture interest 0-50: No venture interest The score you receive highlights where you currently stand, and what you can do to improve your score. A score above 50 means your startup has enough merit that investors will give it some consideration. A score above 80 indicates medium interest, while a score over 90 will translate to strong interest from investors. Click on the following link to try out the calculator for yourself: https://staging.startupfundingespresso.com/venture-funding-calculator/ You can also read more from the TEN Capital eGuide Do You Have a Venture Deal?: https://staging.startupfundingespresso.com/venture-deal-eguide/ 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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How to Write a Pitch Deck

Fundraising /

2 min read When venturing into raising funding, every startup needs to know how to write a pitch deck. The following is a listing of all the slides you’ll need to put in your startup’s pitch deck. Use it to make a solid first impression on potential and current investors. After reading this list, if you still have questions about what needs to be in the slides, check out our TEN Capital eGuide: How to Build a Pitch Deck for an in-depth explanation of the subject. The Problem State the problem you are solving so the investor has a frame of reference for your startup. Show how this is a critical problem and must be solved versus a nice-to-have solution. The Solution For your solution, show a picture of the core product or technology so the investor gets a sense of it. Describe how you came up with it and why it’s a great solution. Highlight both what it does and why they should care. The Market Show the total available market, which is anyone you can sell to. Then show the serviceable market or your core target market. Finally, show the beachhead market (the first 20 customers you’ll sell if you are early stage). Monetization This slide answers the question of how you make money. The goal is to show you have predictable revenue from your operations. Traction In this slide show current sales as well as the funnel of upcoming sales opportunities, your pipeline, customers and prospective customers, and forecast numbers for each opportunity. The Competition This slide often helps highlight the market size and strength by showing who is playing in that space. In your slide, highlight three to four competitors. Avoid saying you have no competition. Competitive Advantage Highlight your core value proposition for the customer, then show what value the customer receives from your product/service. Show what competitive advantages you have. The Team For this slide, the goal is to show you have a complete team and everyone has experience. Show the C-level team, including the CEO, CTO, and CSO, and the names of companies and projects they have worked on that, are relevant to your target industry. Value Proposition This slide should tell you the benefits and why customers will choose you over competitors. Financials This slide gives the company’s current status concerning revenue, expenses, and profit. You want to cover growth rate, scale of revenue, and break-even expectations. Investment Opportunity This slide shows the fundraise target and how much is raised so far. Show interested and committed investors and invested funds to date and key terms of the deal. Read more from the TEN Capital eGuide How to Build a Pitch Deck: https://staging.startupfundingespresso.com/how-to-build-a-pitch-deck/ 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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Presenting Your Pitch Deck

Fundraising /

2 min read Presenting Your Pitch Deck: what you need to know. A pitch deck is an essential tool to have when looking for funding for your startup. Your pitch deck functions as your introduction to your potential investor and can make or break your relationship. Here are some essential points to keep in mind when crafting your own. The Goal of The Pitch Deck The goal of the pitch deck is to introduce your deal to an investor and find out what is essential to them. It isn’t to tell your complete story or explain how your product works. Ideally, you want to plan a follow-up meeting with the investor. Good pitch decks show what you are doing and the opportunity to grow more with funding. Ideal pitches show the proposed outcome will happen with or without them; in other words, the outcome is inevitable. The results of the team are there for everyone to see what has been done so far. Remember, you are the presentation, not the slides. Avoid discussing multiple scenarios as this may confuse your audience. Focus on the core message – it’s one product, one team, one market, one fundraise, and one outcome. What Your Title Says About You Investors want to know what your product is from your pitch, not just your technology or benefits. Your title should come near the beginning of the pitch, as some investors have difficulty focusing on what you’re saying until they know what the product is. It’s essential to show the product and define it clearly, so investors know how you will approach the market. If it’s a physical product, show a picture of it. Make sure the product has a name, helping establish it as a real thing in the investor’s mind, even if the product is still in development. Even the case of a physical device can make it seem real. Say what it does in five words or less, so the investor gets a high-level understanding of it. Even if the product is not yet ready for sale, treat it like it has form and function now so that investors can grasp what you are doing. Common Mistakes in Developing a Pitch Deck One of the most common mistakes is explaining in great detail how the product or technology works. Instead, focus on the benefits of the product and what it does for customers. It’s better to save the detailed explanations for later. Other mistakes include: Not identifying the competition or claiming there is none. Making the font so small that no one beyond the first row can read it. Using too many words so that readers get distracted by reading it. Not setting up a flow, so the slides follow a logical story form. Using market sizing to distract the audience from the fact that you have no traction. Forgetting to ask for investment, so investors are left wondering what you want from them. Using cut and paste from Excel for financials, rendering the slide unreadable. Trying to tell the investor everything in one sitting. Remember… The pitch deck should focus on your core product, team, customer, and fundraise. You can flesh out the details later. The biggest mistake is not asking questions or listening. Most startups spend their time talking when they should be listening for objections and concerns. Read more from the TEN Capital eGuide How to Build a Pitch Deck: https://staging.startupfundingespresso.com/how-to-build-a-pitch-deck/ 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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What’s Your Timeline for Raising Funding?

Fundraising /

2 min read What’s Your Timeline for Raising Funding? If you answered, “right away!” (as many entrepreneurs do), you’re probably not being realistic. In fact, the benchmark is that for every million dollars you are raising, it will take you one year. But even if your fundraise isn’t that large, it can still take many months of planning and executing to raise funding from Investors. Here’s a rough outline of what you should be ready for when developing your plan: Month 1: Check Readiness. Assess your readiness for raising funding, and be honest. Ideally, you have a product and have sold some units. You should also have built a core team. Communicate with your current team and investors you already have about raising funding. And don’t forget to check with your attorney about the legal aspect. You may have to consider modifying your legal entity to allow for outside investment. Month 2: Prepare the Company. Planning your fundraising strategy includes assembling your key documents including, the Executive Summary, Slide Deck, Financials, and Due Diligence documentation. Take steps to fill out your board of advisors and build a set of email updates for monthly transmission to the potential investors. Month 3 to 5: Prepare the Investors. Identify potential investors to put on your investor prospect list. Start with ten investors you already know and have contacted, and add ten new investors per month to your list. Set up meetings to introduce investors to your deal and tell them that you will start raising money in a few months. Ask permission to keep the investor on the list for updates you will be sending out. Start sending monthly updates on your company’s progress using personalized emails – not ‘broadcast’ emails. Customize the mailings to build a personal relationship. And don’t send them your press releases. Demonstrate how you are actually achieving milestones. Month 6 to 9: Pitch the Investors. Follow up with each potential investor and pitch the deal. Identify the lead Investor and close the first round with investor-friendly terms. Offer an incentive to the lead investor for the additional risk he is taking by going first. Month 10 to 11: Close the Investors. Invite other investors to follow on. Keep the relationship with all investor prospects–some may join in a future round. Month 12: Finish the Round. But you’re not done. At this stage, continue sending updates to investors AND the investors on your prospect list quarterly to prepare for the next round of funding. Read more from the TEN Capital Network: https://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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COVID-19 Impact on the Cybersecurity Space

Investing /

3 min read What do investors see as the COVID-19 Impact on the Cybersecurity Space? The fact that COVID has impacted nearly every aspect of our daily lives is not new information. The way we live, connect, work, and play has been directly impacted. As our lives moved online, the web evolved and adapted to our increasing dependence on it. This led to increased vulnerabilities and therefore increased attacks on personal and corporate information. The cybersecurity sector has been adapting to keep up. In doing so, players in the space have gained new insight on more efficient ways to move forward. COVID-19 Impact During the last year of lockdown, working from home has left the workforce more vulnerable to malicious attacks and created specific challenges in the cybersecurity space. Employees are using their own devices to log into networks, exposing themselves and their personal information more now than ever. Corporate IP is suddenly at risk of invasion, and as a result, there’s new funding, and therefore solutions, aimed at those particular issues. People have become increasingly comfortable working remotely, putting a huge amount of pressure on the IT environment to decentralize. At the same time, in America alone, 300,000 jobs in cybersecurity are currently unfilled. There aren’t enough skilled workers to fill the industry’s current needs. In the next 12 months to 18 months, we will likely see a boom in the space as people recognize this trend, take the time to get the required education, and fill the need. We’ll start seeing more opportunities for the cybersecurity space. We will likely see many of the technologies that depended on the old environment struggle to keep up in the new remote world, leading to consolidation within the industry. Privacy Needs We’re seeing a trend around privacy in cyberspace as people now recognize their data is being used (and misused) overall, and they’re not getting compensated for it. At the same time, the amount of information leaks is increasing exponentially, leading to corporations and individuals demanding better privacy protection. Ten years ago, everything was centralized; employees were in offices and accessing the corporate network through a VPN. COVID flipped this scenario on its head, and now people are not only working remotely but from a variety of places, each with their own unique internet connections. They’re using personal devices, not always their own, that have systems that might be calling out to nefarious servers. The exposure to the opportunity for hackers to take advantage is now rampant, and the understanding of the corporate environment is more confused than ever as they’ve lost some control and understanding of their own systems. Back to Basics The cybersecurity space has experienced a resurgence of “back to the basics”. The industry has been around for about twenty years, but there has been a massive explosion in investment, major acquisitions, and new companies in the last five years. One of the patterns presenting itself in all of this is that we’re going back to a lot of the basics that a good security program is built on. Questions like “Before I think about securing my stuff, where is all of my stuff?” and “What are all the accounts that we have?” or “Where are all of our servers? Our data centers? Our users?” are now back at the forefront. Due to this reverted mindset, more companies focus on fundamentals such as asset management and attack surface, leading to specialization. We’re starting to see more security companies avoiding solving all of the issues, instead simply wanting to make the user more efficient at X or to increase efficiency in generating returns to the user rather than completely claiming to protect the customer from the user cataclysmic breach. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/investor-perspectives-on-the-cybersecurity/. 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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Five Steps to Identifying Market Validation

Fundraising /

2 min read Five Steps to Identifying Market Validation (and the one key criteria that counts). Angel investors look for market validation in a startup before investing. Fundamentally, this means that the entrepreneur has found a market with a need. But how to validate a market segment? There are 5 key criteria that Investors will look for, and one key that provides the “acid test”, indicating you have found one. Identify the Target Market Write out a specific definition of your target market segment and how it fits in the overall market. Set up a list of objectives you want to learn from the research. Build the Question Set Using an online or email survey to ask no more than five questions. In an interview, up to ten questions capture a good amount of information. Match each question to your objectives. Test the Question Set Send the question set to five friends. Ask them to fill it out and then give you feedback on the wording. You can also check their responses to see if it addresses your question. Roll up the responses and see if the results answer your objectives. Conduct the Interviews/Surveys In an email survey, you will receive most of the responses you’re going to get in about 2 to 3 days. After that, the responses drop off dramatically. In the survey, you may want to ask if you can contact them for further questioning. This may give you additional contacts to interview. Analyze the Data Review the raw data yourself. It’s surprising how often the same set of data can generate completely different results from different reviewers. While surveys and interviews can help validate the market, the one criteria that counts more than anything else is: “Will the customer buy the product/service?” Generating revenue, even at a small scale, says a great deal about your market’s need for the product. This is important because when investors review deals, one of the first questions that come up is “Do they have revenue?” If the answer is “yes” then you’re in the “to be considered” category. Read more from the TEN Capital Network: https://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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Investing in Cybersecurity

Investing /

3 min read Investing in Cybersecurity Cybersecurity resulted from the expanded exposure of people’s critical information on the web, including personal data, identifiable information, healthcare information, and more. The industry is horizontal, crossing many other industries such as energy, consumer products, government services, media, and more. Cybersecurity is central to the functioning of these sectors, as well as our economy as a whole. There has been a significant increase in the “bad side” of cybersecurity. Whereas cyberattacks may have referred to petty theft, we now see massive attacks on both personal and national levels. Economically, there’s an entire industry on the wrong side which creates an explosive industry on the good side. The minute a cybersecurity capability that can block hackers’ tactics is found, the bad guys figure out a way around it, creating a continuous lifecycle for the cybersecurity industry. Why Cybersecurity? Unfortunately, there is a lot of cyber-crime happening. You can’t help but pick up the newspaper or turn on the TV and hear about another breach, another ransomware attack, or something else to be afraid of. And you only hear about the tip of the iceberg. There’s a lot of issues at work, and there are several different solutions. The growth in cybersecurity is an asset class, and from an investor’s perspective, everything is on the table. From traditional venture capital investments to early-stage seed investing, late-stage pre-IPO growth, and even buyouts, there is a full spectrum of investment opportunities in the cybersecurity space at this time. What Makes a Company Successful? What makes a successful cybersecurity company is the same as in any other sector- good timing, a strong team, the right technologies, and traction. Specific to cybersecurity is the understanding of the history and evolution of the industry. Cybersecurity is a relatively new field, and in the last 20 years, it’s grown to be more sophisticated than ever. Being in the know about mergers and acquisitions, technology adoption, company name-changes, and how this evolved is crucial to see opportunity in the space and avoid getting run over by the traditional tech companies. What Do Investors Want to See? Solid Management: Is the management team made up of solid leaders that understand the domain? Do they have the experience and skillsets to be understood in that particular domain? Market Share: Investors want a return on their investment. Is the market big enough not to be pushed out? Funding: What kind of money is backing the organization? In cybersecurity, it takes funding to get technologies to market. It’s not as extensive as pharmaceuticals or medical devices, which have many FDA regulations. Still, the technology itself takes some time to get done, meaning you need to have pockets with enough depth to bring you the runway you need. Culture: The culture of a company and the investor backing it has to be synergistic. When there are inevitable discussions, debates, and challenging situations, people aligned on the philosophies of life and management and structure and returns end up getting through together. In contrast, when it’s not aligned, you see scenarios that can destroy the organization, such as powerplays, struggles, and people not getting fair shakes. Distinctive Technologies: Technologies addressing significant and large problems are going to go further. Investors tend to be turned off by companies who claim to do or solve it all because it is improbable they do. Investors in this space look for companies that do one thing and do them well, especially when funding small or young companies. And for Extra Credit Quantification and Defensible Metrics: Very few companies are quantifying cyber risk or have a defensible set of algorithms that look at cybersecurity in the digital asset context. Today, 85% of businesses are run digitally. The explosion to digitization is parallel to the explosion in cybercrime, and this is what the cyber-criminal attacks. When you can quantify this, many use cases come out of it, including prioritization and insurance limits that aid in prioritizing your cyber program. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/investor-perspectives-on-the-cybersecurity/ 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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