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Tissue Culture and Cannabis

Investing, Other /

2 min read Of the many emerging technologies in the cannabis market currently gaining steam in the North American market is called tissue culture. Tissue culture itself is not a new technology. Many fruits grown around the world use this same technology. Tissue culture means that growers are creating a seed that has known genetics. Using known genetics ensures that the apple or banana a customer buys at a grocery store in New York is the same as the apple or banana a customer would buy at a grocery store in LA. Tissue culture ensures that things like taste and ripening time remain consistent across the board. Most cannabis is grown using mother plants. At the end of each 4-month harvest, the growers clip the top of the plants. These clippings are planted as seedlings to produce the next crop, and so on. The problem with this is, you can’t determine whether the mother plant has consistent, stable genetics from one growth cycle to another. There has been so much genetic drift over thousands of years of growing cannabis. In turn, you can’t have an infused drink or chocolate bar without knowing that the genetics is stable. This is where tissue culture comes into play. Growers are looking to technology to ensure that the plant: Tastes the same every time Works the same every time Grows the same every time While the tissue culture trend is just starting to emerge in the cannabis space, and it will likely become a standard means of growing soon. Today, most consumers are no longer purchasing cannabis to smoke the flower. Instead, they are purchasing cannabis-infused products where consistency is critical. Due to this shift in the market, we are likely to see the cannabis industry turn more toward tissue culture so that suppliers can ensure that customers are receiving a consistent product. Read more: 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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Building Investor Engagement

Fundraising /

2 min read How to Raise Funding Step 2: Building Investor Engagement You have a good list of investors that are interested in your deal, but how do you get investor engagement? You need to introduce your deal to the investors and demonstrate why it’s a good deal, the operative word here being “DEMONSTRATE.” Most startups tell the investor why it’s going to be a good deal; superb product, great team, great market, great future, etc. The key is to SHOW them. Start by highlighting your traction with customers, the experience and ongoing work of the team, and the improvements on the product. Investors see dozens of deals every day. You can stand out by remembering one thing: Everyone promises, few deliver. Every startup has a great future. Every startup promises the moon.  So what does the investor do? Look for evidence of meeting milestones and a sense of momentum behind the deal. Your outreach to the investor is a campaign, not a one-time contact. You must demonstrate that you have traction. The team must be doing great things. The product must be progressing. If you can’t do anything until you have that $500K, then the process will get tough. You have to show you can do things with little or no funding. Use campaign mailers to tell your story. Over the course of several mailers, you need to showcase your deal and how it works. Investors are busy. They don’t have time to read 5000-word emails. They’ll read a half-page, maybe a little more, and that is it. You need to tell your story over a series of emails as we work our way into the busy lives of the investor. Break the information down into smaller pieces and schedule them out so the investor can see your progress regularly. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/how-to-raise-funding-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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The Various Types of Fundraises

Fundraising /

1 min read A common misconception among startups is that when they are looking to raise for investment, they have the total raise for the life of the startup in mind. It’s a big picture way of viewing things, when in actuality, it is better to look at the chapters rather than the whole story. Approaching the investment, the startup needs the total sum in mind. In many ways, it is biting off more than you should be chewing at the time. A bit more focus here is vital. The ideal way to approach raising for investment is by breaking the raise into smaller chapters and smaller bites, which means focusing on smaller rounds. By doing this, the founder no longer has to spend an excessive amount of time on the fundraise process. There are some things to consider when breaking the raise down into rounds. Below is a guideline on how to break up a startup fundraise into tranches.  Family and Friends Funding $10k to $100k Pre-seed $250k Seed  $500k to $750k Seed + $500k to $750k Series A $1.5M to $3M Series B  $5M+ When going through these rounds, it’s essential to know that if you raise too much money, too early in the life of your startup, you will find yourself giving away too much equity. To avoid giving up too much equity, stick to raising in stages. Read more: 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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Deal-Flow is Crucial, but Where to Get it?

Investing /

1 min read When starting as an Angel investor, it’s essential to set up several sources to consistently find deals that fit your thesis and track those that meet your requirements; this is called “Deal-Flow”. It’s helpful to network with lead investors and build relationships with investors in general so you can share information about deals and provide/receive referrals.  Here are some sources to consider: Ping the members of the group regularly for deals they recommend. Avoid the ones in which they say, “I’m not interested but perhaps others are.” Look for the deals that members want to invest in. Identify investors outside the group who fund quality deals in the same sector and stage as your group and set up a relationship to share deal-flow. Follow up with your portfolio companies about deals they recommend. Consider other angel networks in the geographic area or sector area to provide deal-flow. Talk with service providers such as attorneys and accountants about deals they see needing capital. Join community groups that foster the sectors your group is interested in and have the members attend those group meetings. Review online portals for deals raising funding. Finally, establish a reputation for providing mentorship, feedback, and support to position the group as the go-to resource for startups. Find out how TEN Capital can help you source the right deals: https://staging.startupfundingespresso.com/investor-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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Building a List of Investor Prospects

Fundraising /

1 min read How to Raise Funding Part 1: Building a List of Investor Prospects (You Need Several Hundred, Not Just a Dozen or So) By now, you probably have your pitch deck and financial projections ready, and your due diligence box (some call it a data room) is coming together. Now it is time to take your deal to a list of investor prospects. The first step in a fundraise is to build a list of potential investors. You’ve to go through your contact list, your LinkedIn connections, and you rack your brain for potential investors in your deal. You’ve done a few Google searches and added a few local angel networks, you know. The list stands at about 15 names. Now what? You know the fundraise is similar to sales; it’s a numbers game. Only a small percent are going to invest, so we need more names. A lot more. You can search Medium and find a few lists online. Some have email addresses; most do not. You start asking around for lists from friends, and they share some with you. Some of the lists are up to date, but many are over a year old. Now what? At TEN Capital, we have over 12,000 investors in our network that you can access. We can introduce your deal to those investors based on their interests, so that you can confidently build your list of solid investor prospects. That doesn’t mean they will write a check for $1M in a few weeks, but now you know who you are targeting, and you can start the work of building a relationship with the investor. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/how-to-raise-funding-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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Pivoting is Okay

Fundraising /

1 min read Be prepared to pivot. The idea and the business you started with will almost never be the idea and business you end with. At some point, during the beginning of your startup, you’re going to find that your original vision doesn’t quite fit the market as you hoped it would. This doesn’t mean you’ve failed, it just means that adjustments need to be made. Don’t worry, nearly every new business faces this same dilemma. The good news is, it only takes 3 pivots to get to the growth phase of your startup. The Target Market Pivot This is when you find the right market. The Business-Model Pivot This is when you’ll find the right way to structure your business to fit the new market economics. Team Pivot This final pivot entails finding the right people to grow and run the new business model. After you’ve made these pivots, you should be on your way to growth. Through the lifespan of your business, try to remain as open and flexible as possible when it comes to pivoting. Try to keep in mind that, at any time, you may need to shift your business strategy to accommodate changes in: Customer needs Industry Unforeseen factors Being prepared to pivot can allow a business to move through changes with a graceful evolution. The more comfortable you get with allowing your business to change when it needs to change, the more likely you are to be successful in making those much-needed moves. Read more: 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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Building Your Investment Thesis

Investing /

2 min read For investing in a startup, consider the future and what will be needed then; don’t just look at the world as it is today. Map the trends and extrapolate out and consider what will be needed five years from now based on the direction of technology, the markets, and other factors. From this, you can build a view of the future and inform your investment thesis and begin your preparation for investing in startups. Creating Your Investment Thesis There are too many deals to look at all of them. You’ll want to narrow the field by building out your investment thesis. There are a few crucial steps to take if you haven’t done so already. Step One: View 50 deals, then write down what you like and what you don’t. TEN Capital is a great resource to help you field deals regularly, show you how to review them, and what to look for. Step Two:  Follow up one to three months later to see how each deal is working out. Checking-in regularly will inform your investment thesis as you will see some deals progressing forward, some stall out, and others pivoting to something else. Step Three: Write out your investment thesis in full, including: Your observation about a macro trend in an area you care about The position of the company in the trend Characterization of the company that gives it a competitive advantage Conditions for investing based on price and other factors Example investment thesis statements include: “Healthcare is moving to the home.” “Companies providing technology-enabled services will succeed.” “Companies with recurring revenue and a CAC:LTV ratio of 1:8 are preferred.” “Companies with revenue above $500K and pre-money valuation below $5M are preferred.” It’s essential to write out your investment thesis ahead of time, as you’ll often return to it. Allocating Funds In general, it’s best to keep your angel investing to 3-5% of your discretionary investment funds. These are funds you can lose and not impact your lifestyle or other investments. Determine in advance how much you plan to invest. Use a five-year window. Once you have that number, know how you’ll access those funds for when you need them. Keeping these funds separated from the rest of your investments will make managing the process easier. Read more: 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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Have a Little Fun, Make a Little Money, Do a Little Good

Other /

1 min read There’s an old saying about angel investing: “Angels like to have a little fun, do a little good, and make a little money.” Angel investing is more than just about money. I’ve found the successful investments covered all three of the elements of the old angel saying.  It was fun. The people were great to work with.  It had an element of making the world a better place albeit on a small scale. Finally, it provided a positive return on investment so I could continue funding startups. Have a little fun Pursue deals you like. If you don’t like the deal, then why spend the time? Ask yourself, do I want to work with these people? Do I value the work they are doing? If you can answer yes to these questions, you are well on the path to finding a deal that lets you ‘have a little fun.’  Do a little good Once you have a deal you like, then ask, “does the company align with my interests?” Invest in startups that further that in which you believe. You may want to support your local entrepreneur ecosystem, or further a technology that can solve problems that benefit the general public.  Make a little money Get agreement on the terms of the investment with a defined exit. Use the 3X in 3 redemption to define the exit. If you can help the company then consider setting up an advisory position with them.  One of the biggest sources of burnout is uncompensated work. There’s an almost unlimited amount of work that needs to be done and the startup will load you up.  Set boundaries on what you are going to do and how you will be compensated. Consider including these negotiations in the term sheet, even if you don’t intend to provide advisory work as you may later be drawn into it. Having your time negotiated in the terms upfront makes it much easier to navigate the process. Remember, successful investments let you make some money, have some fun, and do some good. Read more: 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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The Importance of Diversity in Your Portfolio

Investing, Other /

1 min read According to a Harvard Business Review study on increasing diversity in venture capital partnerships, the more similar the backgrounds shared by the investment partners, the lower the investment performance. Diversity, simply put, leads to better performing teams. Diversity of perspective breeds a startup that has a better understanding of the pain points that they’re trying to solve. The more a startup ensures that its team includes both women and minorities, the more likely it is to uncover the solution to the problem it set out to solve, and the more likely it is to yield a high performance. However, the fact remains that minority and women-owned businesses still struggle with funding when compared to their white, male, counterparts. While the investment space is working to shift this imbalance, the work is far from over and many still face an uphill battle toward equality. Minorities and women continue to face both structural barriers and biases when it comes to career paths. These individuals are expected to fit within a certain mold and stay within that mold. For example, less than 30% of the CEOs within the US are women. Statistically, however, there are more women in the US than men at roughly 97 men to 100 women. As Ola Gambari, COO of Hungry Fan explains: “It’s the idea of this preconceived notion that we have a lane, and we’re supposed to stay in it and, as a minority, if I’m not running a business focused on minority problems, I shouldn’t be running that business, neglecting the fact that I share all of the other pain points of other human beings in this society.” Instead, investors should be evaluating the business on its merits, not just the fact that it has minority founders. Again, it breaks down to recognizing that different perspectives matter and yield better results. As more investors embrace this knowledge, the more equality we’ll begin to see. Read more: 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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