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Understanding the Types of Family Offices: A Guide for Family Businesses

Understanding the Types of Family Offices: A Guide for Family Businesses

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    10 Reasons an Investor Will Pass on Your Deal

    September 12, 2021

    2 min read  Investors see many deals and can spot glaring holes immediately. Here are ten main reasons an investor will pass on your deal: No Traction. You need to show some evidence of market validation. Even without a sales team and a marketing budget, there should be some demand for your product. No Social Proof. There needs to be some evidence the product works. The Team Doesn’t Fit. If there are major holes in the team or you’ve filled the secondary roles and left the primary ones empty, then it’s going to be a problem. Criteria Don’t Fit. Many funds are clear about what they invest in (SaaS, Healthcare IT, etc). Your deal needs to fit into one or more of those criteria. You Don’t Know Your Market. Those with a vague or fuzzy knowledge of the market or customer will have difficulty raising funding. The ability to site numbers (market size, growth rates, customer spend, etc) helps demonstrate your knowledge. Financial Projections Don’t Add Up. Some startups use the excuse that they can’t predict the future and therefore they have no financial projections. Most investors see this as a lack of knowledge about the business and the market. Fuzzy Business Plan Some plans are filled with future possibilities and great opportunities but fail to define the core product and how it will be built and sold. Investors can spot a lack of focus on the business plan a mile away. No “Use of Funds”. The phrase “I’m raising $1M” often triggers the bull meter because the fundraiser rarely knows how they’ll apply the funds. No Validated Business Model. There’s no evidence of a business either in product or customer activity. Lack of Follow-Up. Surprisingly, an investor will express interest and then never hear from the entrepreneur again. It can take several follow-ups to close an investor. 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

    Successful Fundraising Habits

    September 5, 2021

    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

    5 Signs Your Startup Isn’t Ready to Raise Funding

    August 31, 2021

    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

    How to Write a Pitch Deck

    August 22, 2021

    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

    Presenting Your Pitch Deck

    August 13, 2021

    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

    What’s Your Timeline for Raising Funding?

    August 9, 2021

    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

    Key Elements of a Startup’s Story

    July 19, 2021

    2 min read Storytelling is a key skill for any startup raising funding so let’s discuss the key elements of a startup story: In the early days of a startup, the product and team aren’t fully developed, and customers typically aren’t fully engaged. As such, investors look to the founders to understand the potential of the business. In this case, the founder who can articulate a clear vision of the company and fill in the gaps can win over the investor. The Purpose The first key element to the story you’ll use during your fundraise pitch is your purpose. This can also be seen as a theme. The purpose or theme comes from what inspired your startup. There was something about the world that you wanted to change, so you started the company to fix it. Start your story strong but letting the listener in on this information. To make your point even more substantial, try to connect your purpose to a universal principle or truth that everyone recognizes. Next, build your story around that theme. The Hero There second key story element is the hero. The hero is the character whose journey the audience cares about the most. In a startup fundraise story, this is the CEO. Most heroes are trustworthy and likable, leading the audience to empathize with them in some way. Painting the CEO as this character increases your chances of landing funding. Your story should focus on the hero and not just the product as investors seek to build a relationship with people. In this case, the company takes on the persona of the CEO. If the CEO is trustworthy, then the company will be considered reliable too. The Mission The third element is the mission- the job to be done. It is the goal of the hero both now and beyond the story. For your startup story, focus on what the CEO is trying to accomplish and how he plans to solve it. Outline how hard the problem is for the customer and how it can be made easier. Show how the proposed solution will save time and money for the customer. Talk about the steps to accomplish the mission; what must be done to bring the solution to the market. Finally, show how the product achieves the customer’s desired outcome. In telling the startup story, use the mission to set the direction. And always be sure to show how your startup’s mission reflects your core principles and values. The Obstacle The fourth element, the obstacle, stands between the hero and the goal. All good stories have a conflict that must be overcome. A startup’s obstacles could be competitors, lack of knowledge, regulations, and more. The obstacle creates tension which holds the audience’s attention and helps them experience the story for themselves. For your startup story, show the CEO facing the challenge in bringing the product to the market. Investors will empathize with the plight as they have been there themselves. Show how the CEO overcomes those challenges, remembering that the investors look for grit, determination, and persistence. The Plot After you establish the theme, hero, mission, and obstacle, you can start work on the final element of your story: the plot. The plot is a series of events that leads to achieving the mission. Plots can be set up in several ways, and choosing the suitable model will help make the story more engaging. Try to position yourself as David fighting Goliath: The small startup taking on the big corporation. Or, try telling a Rags to Riches story: How a small startup hit upon a big idea. You can also position it as a quest: Show the entrepreneur’s journey and the lessons learned. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/how-to-craft-a-startup-story/ 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

    5 Things Investors Love to Hear in a Pitch

    July 18, 2021

    2 min read 5 Things Investors Love to Hear in a Pitch Investors hear pitches continually throughout the year. So many, in fact, that one’s eyes can glaze over. However, from time to time, an entrepreneur will make a pitch that will break through the noise. Investors are listening for a few key things that show you have a business with real growth; the rest is filler. Every entrepreneur has a story. Many are interesting, some are not. For investing purposes, there are 5 key elements that are sure to capture the investor’s interest. Real Traction Entrepreneurs who have sales and show it are head and shoulders above the rest. Most talk about the traction they will have in the FUTURE but not what they have today. In an investor’s mind, this equates to “No Traction”. Real Pain Point The entrepreneur has found a real pain point in the market and is filling it. Someone once said that customers pay for the pain to go away, they don’t pay for nuisances or inconveniences. Real Team They have someone building it and someone selling it and those team members know what they are doing. Real Product The product works and is non-trivial to build. It’s more than just spin marketing. Real Growth Prospects The market opportunity has strong growth potential and is not going to run out of steam in a year or two. Those are the elements that light up the investors in the room, if you really have it. Read more from the TEN Capital Education Center: 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

    What gives You Competitive Advantage?

    July 9, 2021

    2 min read  Many entrepreneurs are unaware of what gives their product a competitive advantage, confusing anecdotal stories for concrete evidence. Recurring Revenue Competitive advantage increases revenue by 30% over the competition. This creates a loop where the extra money coming in becomes a competitive advantage to improve the startup’s product or offered services. In today’s world, you would think every business has recurring revenue. Yet, most companies that are raising funding did not structure their business for recurring revenue. Recurring revenue helps your business in several ways: Opens up your business to new customers who could not afford your product previously because the one-time payment was too high; breaking the payment into smaller steps means that more customers will be able to afford it. Provides an ongoing revenue stream to plan your business better as you know how much you will have coming in. Helps you maintain engagement with the customer and gives you the chance to find new opportunities to serve the customer. Platform-Based Solution Consider adopting a platform-based approach to your business. A platform-based solution is a competitive advantage over a single product company as platforms reuse the research, design, architecture, and product packaging. Customer support is also turned into a recurring factor. Network Effects Most businesses increase in value as the customer base grows and validates the product/service. When users encourage others to join the platform, it is called Network Effects. As the number of users increases, so does the value of the platform. If a business can harness that customer base and turn it into a community that more aggressively attracts other users, this will become a competitive advantage. Virality Virality is a key competitive advantage in which users invite other users to join your platform. This approach, in turn, reduces your cost of customer acquisition. Though this is similar to Network Effects, Virality is different. Network Effects shows the platform increasing in value based on users interacting directly, while Virality seeks to engage via social platforms online. If you build virality into your product, you will have a trackable pool of prospects to monetize and a lower cost of customer acquisition. Read more in the TEN Capital eGuide: https://staging.startupfundingespresso.com/how-to-craft-a-startup-story/ 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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