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The Ins and Outs of Whistleblowing: What You Need to Know

The Ins and Outs of Whistleblowing: What You Need to Know

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Fundraising, Investing

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    Guide To Startup Ecosystems

    November 6, 2021

    2 min read If you are a serial entrepreneur or are otherwise serious about startups, building a startup ecosystem may be an attractive option to you. Startup ecosystems provide built-in connections and ongoing support, making the growth of a startup from the grassroots stage to a mature business far easier to manage. In this article, we discuss the best way to begin building your startup ecosystem. What Is a Startup Ecosystem? A startup ecosystem is a network of startups, investors, and others who come together to foster startup formation and growth. At the core of the network are startups led by founders who launch high-growth businesses. This network encourages innovation through shared resources such as capital, talent, and mentorship. Each member in the network has something to offer: Accelerators and incubators: provide education around the initial launch Investors: provide potential capital Universities: provide talent for launching and supporting startups Freelancers: provide additional talent in the form of labor Providers: offer support for legal, financial, marketing, and other services Mentors: provide coaching and guidance on how to grow the business How To Build a Startup Ecosystem In building out your startup ecosystem, consider these points: First, investigate every kind of funding and consider where it may fit into your overall funding plan. It’s most likely that you will use two or three types of funding over the life of your business. To understand the type of funding you should look for, ask: “How will you pay the investor back?” For example, equity funding should be considered if you plan to pay back when you sell the business. On the other hand, if you plan to pay back out of the company’s cash flow, then debt funding is a better choice. If you have a consumer-facing product, consider crowdfunding which offers both debt and equity options. Break your funding down into parts, and consider using more than one type of funding for your business. How to Prepare for a Raise Before launching your fundraise campaign, prepare your business, complete your investor documents, and build your investor network. Start with a group of entrepreneurs interested in startups and meet regularly. Encourage startups to share their projects and invite others to support through coaching and making introductions. Set up a blog and publish a newsletter each week on startup activities in the area. Interview startups and investors. Build a resource list for all startups to use. Recruit lawyers, accountants, and other professionals to join the meetings and support early-stage companies. Set up events such as pitch sessions and happy hours to expand the network and recruit more people into the community. Put the group on website lists for startup communities to generate awareness. Set up a coworking space to give startups a place to work. Recruit startup programs to your area, such as the 3 Day Startup, to provide additional programming. Start small and grow your startup community through regular meetings and consistent newsletter mailings. Remember that your role in building a startup community is to create connections and networks for players in the space. Therefore, facilitating communication and connection is key. 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

    Overcoming Common Investor Biases

    October 23, 2021

    2 min read In this article, we look at five common investor biases.  It’s natural to have biases – we all do. We’re only human after all. However natural or not, some of these biases may be interfering in our relationships with our startups. It’s important to be aware of these biases so that we can do our best to overcome and understand them. Overcoming these biases can help strengthen your startup relationships and your deals. Who knows, you may even break through a current issue with a startup and see a higher return on investment. Bias Blind Spot The bias blind spot is a cognitive bias defined by Wikipedia as the tendency to see oneself as less biased than other people. To clearly identify more cognitive biases in others than in oneself. All investors have blind spots and biases, investing in experiences causes one to be biased unconsciously. To overcome biases, focus on self-awareness. Learn more about the common types of bias such as anchoring and confirmation bias. Pay attention to how you react and respond to different pitches. Question your judgment to see if it’s based on fact or on personal feeling or opinion. Identify what type of deals and founder types make you uncomfortable. Question your judgment process to see where it may be flawed. Are you biased against certain types of people because of past experiences? If certain types of startups and founders make you uncomfortable then spend more time with them. Becoming familiar with them will make you more aware of potential biases you may have. Self-Serving Bias The self-serving bias is a cognitive bias defined by Wikipedia as the tendency to claim more responsibility for successes than failures. Investors use successful investments as proxies for their skill but attribute the failures to other causes. Investors are naturally optimistic, and when things go wrong it’s easy to blame external factors. To overcome the self-serving bias, consider the following: Maintain awareness about the self-serving bias. Check yourself when giving yourself the credit and give credit to other factors for success. For failures, take some time to review it so you understand it well. Make yourself accountable for any failures on your part. And look for ways to improve your skills and process. Selective Perception Selective perception is a cognitive bias defined by Wikipedia as the tendency for expectations to affect perception. Investors tend to see what they want to see in a startup deal. Investors choose those elements in the pitch that match their experience and expectations. Selective perception comes from previous experiences with startups both good and bad. Make sure you are an active listener, truly hear what the person speaking is saying. Ask questions to confirm understanding and that you heard correctly. Check with other investors for their perception to see how it matches and differs from your own. It’s easy to focus on parts of the deal that matches your understanding and ignore those elements that don’t fit.  Stereotyping Stereotyping is a cognitive bias defined by Wikipedia as expecting a member of a group to have certain characteristics without having actual information about that individual. Investors can stereotype startups based on their previous experience. This can be a bias against a sector of business, a leadership style, or other. To overcome stereotyping, investors should set aside preconceived notions and examine the facts available. Investors should look at the deal, the team, and the market as a growth opportunity. Look at similar investments by other investors to learn more about the deal. Investors need to generate self-awareness to understand biases that come into their decision-making. Staying in the know will make changes easier as the startup world is constantly changing. Out with the old and in with the new.  Reactive Devaluation Reactive devaluation is defined by Wikipedia as devaluing proposals only because they purportedly originated with an adversary. Founders tend to ignore and or discredit lessons and or advice given by their competitors as they see it as just that, their competition, and how would their competition know better than them.  To overcome reactive devaluation, consider the following: Maintain awareness of reactive devaluation and watch for it when making decisions. Separate yourself from the situation and view it as an impartial bystander to evaluate the information without bias. Consider the same information but coming from another source.  Would you perceive it differently? Check with others about their view of the situation and if the information is worthy of consideration. If so, review the information with other founders to verify it is legitimate. It’s helpful to separate the information from its source in order to remove any bias either for or against it. 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

    The Most Common Reasons Why Startups Fail to Raise Funding

    October 13, 2021

    1 min read There are many reasons why startups fail, these are the most common. Working with entrepreneurs every day on starting and growing their business, in addition to building a product/service that the market wants, recruiting a team that is effective, and finding customers, they must also raise funding.  A select few have the funding to start and grow the company but the vast majority of today’s startups do not.  They have to raise funding from outside sources and they know it. The most common reason why startups fail to raise funding is that they don’t budget the time or financial resources to do it.  When they ask me for help in fundraising, I ask for their business plan.  In reviewing it I find they have a time and financial budget for building the product.  They also have resources set aside for marketing and selling it. When I ask for their time and financial budget for raising funding, I often receive a blank stare. The four components of a startup are product, team, customers, and funding.  They budget time and dollars for the first three but many miss the fourth one–funding. Fundraising typically doesn’t require a lot of financial resources upfront but it does take some.  Pitching to angel groups requires application fees. Putting investor docs in order requires some cost as well.  The cost is not great but a budget of zero dollars makes it harder. The primary cost in raising funding is time.  It’s nearly a full-time job for three to six months in most cases.  Who on your team is dedicated to the process?  Closing investors is not unlike closing a customer.  You must have several interactions.  For a new company with a new product is almost never one visit and you’re done.  You have to go back and show how the product is improving.  Getting the first customer is the hardest and as you gain more users it does get easier.  The same is true with investing from investors.  If you’re starting to raise funding, I recommend you review your time and financial budget and make sure you are prepared for it. 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

    How To Start Investing Busting The “One-Size-Fits-All” Myth

    October 12, 2021

    2 min read There’s a lot of information out there about how to start investing. As a new investor entering into an unfamiliar field, it can be confusing and overwhelming when figuring out where to begin. Unfortunately, this is why many first-timers fall prey to the “one-size-fits-all-myth”. But the truth is that there’s no right way and there’s no wrong way to do it. There is no “one-size-fits-all” for investing. Different approaches work for different people, and what it really comes down to is finding the best approach that works for you. Ultimately, your approach to investing in Startup A should in fact be different than Startup B. With this new perspective, we hope you can confidently go out into the field and make informed investment decisions based on the specific company you are planning to work invest in.  Why Can’t One Size Fit All Startups? For starters, not all startups are even the same size. I’ve learned over the years that where you are in the world molds your definition of what counts as a startup.  In Austin, if you have a great idea, and two people working on it, then you’re a startup.  In Dallas, if you have $1M of revenue, then you’re a startup. If you have less than $1M then you don’t exist.  In Shanghai, if you have $10M of revenue then you are a startup.  I once heard a fund manager refer to a $20M company as a startup. What makes entrepreneur communities vibrant is their inclusion of all players in the ecosystem, not just those with substantial traction. Startups with differing levels of experience and revenue streams require different investment approaches. Growing Number of Potential Deals In the past, angel investors followed the one-size-fits-all approach, writing $50K to $100K checks for the deals that looked promising.  If the deal went well, they would write another $50K or $100K check to add on to their investment.  However, in today’s world, there are so many deals that it’s hard to invest this much into each deal unless you know it’s going somewhere. This is another reason to approach each startup as a unique investment opportunity. An Easy Rule of Thumb The one-size-fits-all investment approach is a likable theory due to the fact that it makes investing easy. But if there isn’t one solid approach to startup investing, and there isn’t even a standard definition of what a startup company is, then how do you know what to invest where? We’ve generated a rule of thumb for you to follow in future investments. But keep in mind, each scenario is unique, and you may need to just go with your gut. In most cases, we advise to invest: $2500/deal for a seed company $5000/deal for a growth company $10000/deal for an expansion company 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

    Three Important Questions to Ask Before Investing

    October 10, 2021

    2 min read Three Important Questions to Ask Before Investing The startup world is full of big ideas. Entrepreneurs have grand plans to make these big ideas a reality, and in some cases investing in these plans can lead to a hefty ROI for investors. But how do you know if this startup is the one to invest in? We’ve boiled this down to three main questions to ask before investing in a startup company. If even one of these answers is wishy-washy, you may want to consider saving your investment for a company in steadier waters. Let’s take a look at what these three questions are. Do They Have Sufficient Traction? The first question to ask is if the startup has sufficient traction.  You can track them on their sales growth, team changes, product development, and fundraise.  As you receive reports, you can start to build out a list of crucial traction points– leads, sales, channels, etc.   As one investor said, “I don’t invest in dots. I invest in lines.”  It’s essential to build out a picture of how the business is growing. By watching the deal over time, you can better understand it and hopefully see an upward trajectory, at which point an investment makes sense. Are They Serious? Here are a few signs that an entrepreneur may not take the business seriously enough to be successful: Job titles are overly vital to them, and they are generally more concerned with receiving titles and credit for the work than they are about the actual work. They are not focused on the customer. In fact, they may not even have a clear understanding of who their customer is or what that customer wants. They don’t take responsibility for problems the startup may have. They blame others for the issues and may claim there can be nothing to fix the problem.  Know your entrepreneur. An entrepreneur who isn’t committed to the cause will raise funding and ultimately waste it. You do not want to invest money in those who aren’t going to see it through. Do They Have a Well Thought Out Plan? They might have a great idea, but they’ll need to do more than just layout a slide deck with goals they hope to achieve. A promising startup must be able to back it up with a well-thought-out plan to accomplish those goals. Here are some questions you can ask to get a better idea of what kind of plan they have in place: How will they generate leads, and what does that look like? What is their current sales pitch/angle, and how will it work for them? Where are their customers coming from, and how do they make the sale? It shows potential for investment if they’ve done their homework and have clear answers and processes in place. 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

    Three Important Questions to Ask Before Investing

    October 10, 2021

    2 min read Three Important Questions to Ask Before Investing The startup world is full of big ideas. Entrepreneurs have grand plans to make these big ideas a reality, and in some cases investing in these plans can lead to a hefty ROI for investors. But how do you know if this startup is the one to invest in? We’ve boiled this down to three main questions to ask before investing in a startup company. If even one of these answers is wishy-washy, you may want to consider saving your investment for a company in steadier waters. Let’s take a look at what these three questions are. Do They Have Sufficient Traction? The first question to ask is if the startup has sufficient traction.  You can track them on their sales growth, team changes, product development, and fundraise.  As you receive reports, you can start to build out a list of crucial traction points– leads, sales, channels, etc.   As one investor said, “I don’t invest in dots. I invest in lines.”  It’s essential to build out a picture of how the business is growing. By watching the deal over time, you can better understand it and hopefully see an upward trajectory, at which point an investment makes sense. Are They Serious? Here are a few signs that an entrepreneur may not take the business seriously enough to be successful: Job titles are overly vital to them, and they are generally more concerned with receiving titles and credit for the work than they are about the actual work. They are not focused on the customer. In fact, they may not even have a clear understanding of who their customer is or what that customer wants. They don’t take responsibility for problems the startup may have. They blame others for the issues and may claim there can be nothing to fix the problem.  Know your entrepreneur. An entrepreneur who isn’t committed to the cause will raise funding and ultimately waste it. You do not want to invest money in those who aren’t going to see it through. Do They Have a Well Thought Out Plan? They might have a great idea, but they’ll need to do more than just layout a slide deck with goals they hope to achieve. A promising startup must be able to back it up with a well-thought-out plan to accomplish those goals. Here are some questions you can ask to get a better idea of what kind of plan they have in place: How will they generate leads, and what does that look like? What is their current sales pitch/angle, and how will it work for them? Where are their customers coming from, and how do they make the sale? It shows potential for investment if they’ve done their homework and have clear answers and processes in place. 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

    Five Fundraising Myths Facing Entrepreneurs

    October 7, 2021

    2 min read Raising funding is difficult for many entrepreneurs, and there are fundraising myths out there making it even harder. In this article, we plan to bust those myths one by one so that you can start raising funding with confidence. Myth #1: Fundraising is about getting the check Many entrepreneurs believe that fundraising is all about making their startup money. On the contrary, fundraising is about building a relationship with the investor. Investors start as mere contacts in your network. A relationship begins to develop through mailers and updates on your startup’s core results related to the team, sales, product, and fundraise, and your potential investor is promoted from prospective donor to a partner in your journey.  Myth #2: My product will carry the day The reality is that your product is not what carries the day- your business is. No matter how great your product is, it isn’t going to win over any significant share of the market without a strong business structure behind it. Investors will base their decision in part on your past and current financials, how much funding you are seeking out and how you plan to use it, your exit strategy to calculate an expected rate of return, and proof of market validation. Myth #3: It should only take a few weeks to raise $1M In reality, it’ll take you a calendar year for every $1M you want to raise at the seed stage. This accounts for the time it takes to prepare the company, the investor documents, and the pitch as well contacting, pitching, and following up with investors. In addition to this, investors will need to have time to complete their due diligence process. Remember, you are likely not the only entrepreneur your investor is working with, and you will need to be patient and work with their schedule. Myth #4: The investor didn’t follow up after my pitch session, so he must not be interested Don’t expect an immediate decision from your prospective investor. Investors spend the first three to five interactions trying to figure out what you are doing. To help push things to the next level, try prompting your prospective investor with the following questions: Would you invest? What number do you have in mind? Can you commit to that number? If not, what holds you back from committing? What date before the close can you commit to signing the docs and wiring the funds? You can also communicate that the following raise will be at a much higher valuation. If the investor is going to commit, they will do so for a better valuation now. Try tacking on incentives such as redemption rights, warrants, etc. Myth #5: I only need to source five investors to raise $250K You’ll need more than five investors to raise $250k. In fact, you’ll need about fifty. Don’t let this number scare you. There are many sources of capital- loans from family and friends, bank loans, revenue share loans, and equity investments in the form of convertible notes and equity ownership. Search your network for potential investors, including your contacts list and your LinkedIn connections. You can even search the web for local angel networks. 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

    Five Startup Cognitive Effects You Should Be Taking Advantage of

    October 4, 2021

    2 min read Five Startup Cognitive Effects You Should Be Taking Advantage of A stellar product, a capable team, and a solid sales and marketing plan are crucial to winning over investors. However, there are a few things you can do beyond this to help ensure your potential investor sees you in the best light possible. Employ these five cognitive effects to your investor pitch and see the difference. Zeigarnik Effect Zeigarnik effect is defined by Wikipedia as uncompleted or interrupted tasks that are remembered better than completed ones. Investors will remember the pitch that leaves them hanging more quickly than the ones that have closure. The cliffhanger in a serialized show is recognized because the action is left unfinished, and it leaves the viewer with an uncompleted story creating mental tension. To use the Zeigarnik effect, consider the following: In your pitch, close with a cliffhanger ending by discussing an upcoming event such as closing a big sale or hiring a great team member. Use the pending outcome as an excuse to return to the investor later for a follow-up. In general, investors are often curious about startups and how they turn out later. Use this in setting up a follow-up call by offering to give them ‘the rest of the story’. Picture Superiority Effect The picture superiority effect is a phenomenon defined by Wikipedia whereby the notion that concepts learned by viewing pictures are more easily and frequently recalled than concepts learned by viewing their written word form counterparts. Investors identify and remember more from images than words. Startups should use pictures rather than words wherever possible in the pitch presentation. Use graphics that are relevant to the content and clarify the message. When this is not possible, then the startup should use distinctive words. These are words that are descriptive and create an image in the listener’s mind. Startups should capture what they do and how they do it into mantras and taglines.  Mantras and taglines create mental images that help the investor remember what you do. Startups can also use video, animation, charts, and graphs as well. Framing Effect Wikipedia defines the framing effect bias as drawing different conclusions from the same information, depending on how that information is presented. How you frame the startup in a pitch can determine how an investor regards it. One can use framing to position a startup, so it’s more relevant to the investor. The investors are tech investors, then position the startup as a tech deal. If the investors look for recurring revenue, then position the startup based on its revenue model. If the investors are impact investors, then position the startup showing the impact it makes. By positioning the startup for the investor, you can increase your chance of aligning with it. Also, by framing the pitch to show the accomplishments of the startup rather than the work left to be done, one can position the startup as successful and on track rather than falling behind. Use framing to put your startup in the best position to connect with the investor.  Humor Effect Wikipedia defines humor effect as humorous items that are more easily remembered than non-humorous ones, which might be explained by the distinctiveness of humor, the increased cognitive processing time to understand the humor, or the emotional arousal caused by the humor. Startup pitches with humor are more memorable than those without. Founders should include humor into their pitch as investors will more likely remember it. Humor also puts a positive spin on the pitch as it removes negative feelings from the investor. It energizes and increases the interest level of the investor in the subject matter. It improves the investors’ perception of the founder as someone friendly and approachable. Humor increases learning ability by telling the investor what they want to hear and following up with what they need to know. Finally, it’s crucial the humor be positive and appropriate and not come at the expense of anyone. Testing Effect The Testing Effect is defined by Wikipedia as the fact that you more easily remember information you have read by rewriting it instead of rereading it. Investors remember that which they recall from memory better than just hearing the pitch again. This comes from research showing that taking a test that requires writing out a response improves retention better than just rereading the material, which moves the information into long-term memory. Founders can use the testing effect by asking investors questions about the pitch to exercise recall. For example, ask the listener: ‘Remember the problem we are solving?’. Give them time to recall it. If they don’t respond promptly, then answer. This avoids the awkward silence that can arise.  During the Q&A portion, engage the investor in a dialog that recalls vital points such as the problem you solve, the solution you offer, and the traction you have. This will help the investor remember your deal better. 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

    Five Investor Biases You Should Watch For

    October 2, 2021

    2 min read Whether you are a new investor or you have been in the industry for decades, you may be falling prey to one of these common investor biases. Read them, study them, maybe even write them down and keep them on your desk. The more familiar you become with these biases, the easier it will be for you to avoid them and make fair and profitable decisions going forward.  Confirmation Bias Confirmation bias is a cognitive bias defined by Wikipedia as the tendency to search for, interpret, focus on and remember information in a way that confirms one’s preconceptions. Investors bring their recent investment experiences to funding new startups. If the investor recently lost their investment on a deal in a specific sector, they will most likely look unfavorably on other deals in that sector. On the other hand, if the investor found success in investing in a particular type of company, then most likely, the investor will look for similar companies. It’s important to understand these forces when setting up an investment thesis and a criterion for funding startups.   To overcome confirmation bias, consider the following: Try to view the deal from other angles than you traditionally use. Ask other investors for their view on it and note the ones with strong objections. Discuss your thought process with other investors to see where you might be off the mark. Expand your connections to include people with different experiences and viewpoints. Give prominence in your thinking to views divergent from your own.  Courtesy Bias Wikipedia defines Courtesy bias as the tendency to give an opinion more socially correct than one’s genuine opinion to avoid offending anyone. Courtesy bias arises when an investor tells the startup what they think it wants to hear rather than what the investor thinks. The investor spares the feelings of the startup but, in the process, withholds feedback the startup needs to hear.  Feedback should be candid, even if it’s not all positive. If the feedback is all positive and negative, it may signify that the investor is under courtesy bias. Consider giving a more balanced view of the startup with both positive and negative feedback to learn from the experience and have something to work on. Another form of courtesy bias is investors who hide their social, political, or other leanings. For example, some investors believe that only those from their social or political circle are reliable investments, but they call out some other facet of the startup for passing. To overcome the courtesy bias, investors should take note of the deals they fund and identify factors swaying their decision. Present Bias Present bias is a cognitive bias defined by Wikipedia as the tendency of people to give more substantial weight to payoffs that are closer to the current time when considering trade-offs between two future moments. Early exits weigh stronger on investors than further out exits, even if substantially larger. Under present bias, investors forgo longer-term gains for immediate gratification. To overcome present bias, consider yourself in the future compared to today. Ask what your future self wants rather than your present-day self. If holding the investment longer will make your future self happier, that can outweigh what your present self wants. Another way to overcome present bias is to set goals and criteria for buying and selling and use those for determining when to buy and sell.  Finally, the time value of money measures how much future returns are worth based on the time to return. By using these calculations, you can see the quantitative difference between the two investment choices.  Shared Information Bias The shared information bias is a cognitive bias defined by Wikipedia as the tendency for group members to spend more time and energy discussing information that all members are already familiar with and less time and energy discussing information that only some members are aware of. Investors focus on information their investor group already knows and talks about but spend less time on information not well understood. In diligence, investors focus on the areas they already know and give less attention to the unknown areas. To overcome shared information bias, consider creating a checklist of critical topics to discuss and move the group forward through the list. Give weight to the voices discussing diverse opinions. Look for those who have experience with the topics and highlight their views. Expand your group to include others who have more varied experiences. Capture the dialog into written form for a follow-up review. It’s easy to talk about the things you know and more challenging to discuss new things. Hindsight Bias Wikipedia defines hindsight bias as the tendency to see past events as predictable when those events happened. Early indicators come back to the investors ‘ minds when an investor witnesses a startup fail or succeed. In some cases, investors selectively remember specific events or facts that later confirm the outcome, leading to overconfidence.  If one believes he can predict the outcome, he’ll make mistakes erroneously, thinking he can envision the result of any startup. Often, success or failure is a combination of market selection, timing, team dynamics, and not just one facet of the business. To overcome the hindsight bias, remember you cannot predict the future. Review the facts of the startup and not just how you feel about it. Write out your thought process, including the facts at hand and the justification for investing. When the investment outcome becomes known, you can refer back to the notes to check your decision-making. Consider other outcomes aside from the one you expect and keep an open mind throughout the process. Build a decision-making process and focus on it rather than guessing the outcome.  Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/startup-and-investor-biases/ 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:

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