Author name: startup_admin

In raising funding you hear no most of the time. It reminds me of  a saying, “A good salesman never takes ‘no’ for an answer.” I worked as a salesman for several years and saw how others used this statement. It played out in several different ways. The rookie salesman harangues the prospect with the current product and pitch. They reminded me of the door to door salesman who put his foot in the door and wouldn’t let you close it until you bought something.  An experienced sales person didn’t just repeat the offer, instead they changed it up. When you hear no, you can alter the price, product, or promotion. So when an investor says no, you can change the price (the terms of the deal), the product (improve the startup with more sales, better team, etc), or the promotion (reposition the deal from say an ed-tech deal to an impact deal). The foot in the door almost never worked for the salesman, and repeating your investment offering will almost never work for on an investor who doesn’t buy into it. Make a change to what you are offering and see what happens. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

TEN Capital is not a broker/dealer but rather a Funding as a Service program. Here at TEN, we help startups raise their own funding rather than raising funding for them. Other groups such as broker/dealers (which requires a license) raise money for startups. TEN Capital is a good fit if you want to raise your own funding a lower cost of funds raised to control your raise including the terms to decide who you want as investors Broker/Dealers are a good fit if you you don’t have time to raise the funds you don’t want to deal with the details of the fundraise such as negotiating the terms want to have someone else raise the funds for you Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

You have to ask five questions to get to the full answer. Ask one question, and you get the idea. Ask four more questions, and you will get you the answer you want. In talking with startups, I find the investor must always probe for the final answer. A single question rarely reveals the full answer. I spoke with a startup recently about their funding progress. They said, “We’re raising a million dollars, and we have raised half of it already.” On the surface, it sounded like they had $500K invested in the business. So then I asked, “You already have $500K in the bank from your raise?” They responded: “Well, not exactly, we have several investors telling us they are interested in investing.” After four more questions, the truth emerged: they had $100K in the bank and around $300K in soft-circled commitments. That’s good progress, but not exactly the half million we heard at the beginning. Never take the first statement as the final answer. It takes at least 5 questions to get down to the real answer, and as an investor, you want to know what the real answer.  Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

2017 was a banner year for ICOs. The money was flowing. Startups with nothing more than a whitepaper were raising millions of dollars. The events around ICO’s were extravagant affairs at high-end hotels and on cruise ships. Then it came crashing down by the end of Q1 2018 when it came out that 42% of all ICOs in 2017 were already dead. The party was over. Even today, two years later, it’s still over. I see those who raised funding during 2017 come back around for their next raise. They now appear as ICO Refugees. They have the mindset of 2017 in which the ‘sky is the limit’ and the investment dollars infinite. Their pitch starts with the promise of blockchain and the new market they are going to create. They’re going to tokenize an application and create a market. They have big-name partners lined up to work with them. The only need $5M dollars to build out the system and another $10M to launch it. For some reason, I never seem to recognize any of the partner names and I can never see a working version of the software. The reality is that 2017 is over and standard startup metrics apply. Blockchain is another enabling technology. You must have a product with users engaging it and line of sight to revenue. No one is going to invest $5M to develop something that will launch 3 years from now.  Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

While unforeseen events can overtake a startup, most CEOs simply don’t plan ahead. For every $1M you want to raise, it will take you one calendar year to raise it. Most of the time, an entrepreneur who approaches me is raising funding today and is looking for a check now.  In some cases, they need their funding within the next thirty to sixty days or something bad is going to happen. Most startups end up educating their investors during the fundraise. I once had an entrepreneur come to me saying, “I’m not raising funding now, but in six months I will be. May I keep you informed of our progress?” Of course, I said yes, because I wanted to see how it turned out. Over the next six months, the CEO sent me monthly updates about his progress. When he launched his fundraise formally, he was able to close it in just a few months.  He used those six months to educate the prospective investors about his deal.   This is a great technique for introducing your deal to a prospective investor.  More investors sign up to track along since there’s no pressure to engage the fundraise. It takes four touches or more to introduce your deal and educate the investor about it.  It’s a great idea to start that process sooner rather than later in your fundraise. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

I recently saw a pitch deck from a seed-stage startup which had a small amount of revenue. The deck claimed a valuation of $50M because a similar company exited at that valuation. I asked his valuation and he claimed $50M because “that’s what my company will be worth.” I reminded him that the example company exited with a $50M valuation had $15M in revenue at the time. He said, “I’ll have that too.” I often see entrepreneurs calculating valuations for today’s’ fundraise using tomorrow’s revenue. Today’s revenue determines today’s valuation. Your business tomorrow determines your valuation tomorrow. Some entrepreneurs have a strong mental block around this. They think their company will one day be worth more, so they should have that valuation today. Investors match investments with the current state of the business. As you increase sales, team, product, and IP, your valuation goes up. The takeaway here- only raise as much as you need to get to the next level. Otherwise, you’ll be raising more funding on a lower valuation which means you’re giving up more equity than necessary. Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies

Competitive advantage increases revenue by 30% over the competition or decreases cost by 30%. Virality is different from Network Effects. Virality has users inviting other users to join.  Network Effects has the platform increasing in value based on more users participating. I once had a CEO tell me “I wish I had designed for virality rather than revenue.” If you have virality built into your product, revenue will follow. Here are five sources of competitive advantage: Recurring revenue Channel access Platform-based solution instead of singular products Network effects in action (the value of the product increases with the number of users) Virality (not the same as network effects; users invite other users) Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies