Investor Connect Podcast

The Value of Proprietary Insights Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In selecting startups to fund, investors often use various deal flow channels to find the ones that fit their investment thesis. In addition to deal flow, the investor also needs proprietary insights. This comes from not only seeing a wide range of deals but also knowing which deals stand the best chance of an exit. Proprietary insights come from understanding the needs of the acquirers of startups. These are often larger companies that grow by...

Alternatives to a Down Round Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. During down markets, the founder may find it a challenge to raise funding at a higher valuation than the last round. If the company is not doing well, there's the possibility of a down round. Instead of a down round, consider the following: Raise more funding but at the same valuation as the last round. This move sideways avoids the down round but generates more funding to continue the growth. Run an internal raise giving...

The Jockey, the Horse, or the Track Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Founders building their pitch deck have a choice as to how they frame their deal. They can focus on either the jockey, the horse, or the track. Here's how to frame your startup in this model: Focus on the team. This is the jockey in our analogy. Show how the team has the right skills to take the company to a successful exit. Describe their backgrounds as well as their current execution on...

What To Outsource in Your Fundraise Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Fundraising requires a great deal of work. At the core of it is the CEO pitching and following up with investors. There are elements that can be outsourced to others. Here's a list to outsource in your fundraise: Branding and Design The logo and color scheme on the pitch deck may be done better for a professional graphic designer. Social media Writing content and posting on social media to create buzz about the company...

On this episode of Investor Connect, Hall welcomes Brian Birk, Co-Founder and Managing Partner of Sun Mountain Capital Advisors. Brian brings a unique combination of experience as an entrepreneur, business operator, and investor, with a background spanning technology, life sciences, venture capital, and private credit. Located in Santa Fe, New Mexico, Sun Mountain Capital Advisors is an asset management firm focused on venture capital and private credit, with an emphasis on supporting businesses in underserved markets across the Southwest and Rocky Mountain regions. The firm was founded on the recognition that while innovation and technical expertise are spread throughout the...

Building a Go-to-Market slide Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. A key slide in the pitch deck is the Go-to-Market slide. This slide shows how the startup will enter the market and generate adoption. Here are some key steps to build a Go-to-Market slide for your startup: Identify your ideal customer profile and show how it fits into the industry sector. This includes the type of company, the contact point, and their careabouts. Show the channels to be used to reach the target audience. Highlight the...

Deciphering the Investors' Response Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. After the pitch, the startup seeks feedback from the investor. Sometimes the follow-up is clear and cogent. Other times, the feedback is vague and unclear. Here's how to decipher the investor's response: "This is not in my sweet spot." This is a vague way of saying no, as it gives no specifics. This response means the investor just doesn't find enough interesting information to move forward. "How much have you raised so far?" This statement indicates...

How To Make the Advisor Role Successful Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startup advisors can be a great resource to founders. Here are some key factors that can make the advisor role successful Be selective in choosing them. Look for an advisor who is the best in their field. Timeline is a key factor. Find an advisor who can help now and not sometime in the future. Set achievable goals that everyone understands. Use milestones to set the goals so it's clear what needs to...

Why Give Stock Options to Employees Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startups give stock options to employees as part of their compensation package. Most startups create an options pool at the Series A fundraise. A founder-friendly term sheet will have both the investors and the founders pay for the options pool. In an investor-friendly term sheet, the founders will pay for the options out of their equity. It's important to create an options pool as it provides incentive to the employees. It allows the founders...

Allowing employees to sell stock on the secondary market Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startups that take a long time to reach an exit should consider allowing employees to sell stock on the secondary market. While many startups launch an exit in the five to seven-year range, many more are still running well past this timeframe. Founders compensated employees with stock options. Employees signed up for the startup with the expectation that it will find an exit. Employees selling their stock in the early days...

On this episode of Investor Connect, Hall welcomes Brenda Hogan, CIO at Venture Ontario, to discuss how Venture Ontario operates like a sovereign-wealth-style investor focused exclusively on backing venture capital funds across general technology, life sciences/medical devices, cleantech, and climate tech. Brenda explains how fund-of-funds and co-investment models help develop Canada's venture ecosystem over multiple fund cycles by bringing together institutional capital, governments, universities, corporates, and other partners to help companies move from product-market fit to true global scale. She shares what she looks for in consistently outperforming venture funds—strength and resilience of the team, clear thesis, disciplined de...

How To Handle an Exploding Term Sheet Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. An exploding term sheet is one that comes with a specific deadline, including a time of day and date. It often gives the founder very little time to make a decision. For founders receiving an exploding term sheet, consider the following: Most of the time, the investor will invest beyond the deadline. In many cases, the investor is very busy and needs to get things done. The deadline date is meant to progress...

Key Factors Impacting Investor Returns Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startup investors seeking higher returns should consider the following factors: Due diligence -- there must be a meaningful amount of due diligence performed on the startup before investing to increase the returns. At least twenty hours of diligence should be done for any investment. Diversification -- it's important to invest in different sectors, stages, and types of startups. The greater the diversification, the better the outcome. Critical analysis of the startup -- most startups come...

Building a Startup Portfolio Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startup investing requires a portfolio approach. Here are some best practices for building a startup portfolio. Determine how much time and investment dollars to allocate to startup funding. This could be done on a total allocation basis or on a time basis such as annually. Determine how many startups to fund and at what check size. Consider breaking the startup allocation in half and initially investing the first portion. In a follow-on round, consider if you...

What To Include in a Due Diligence Report Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The due diligence report is written by the due diligence team. It covers the financial, operational, legal, and strategic aspects of the startup. A due diligence report for a startup investment contains the following: Market analysis This includes the size, growth rate, sectors, competition, and the startup's target customer. Product. The diligence report assesses the product for competitive advantage, defensibility, and scalability. Financial. The report reviews the financial projections to see if...

Using the Four-Quadrant Slide Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In pitching the startup, the founder shows how the business will be positioned in the market. The four-quadrant slide is one tool to show how the startup compares to the competition. Here's how to set up the four-quadrant slide. Start by identifying the key criteria for customers. This could be cost, performance, ease of use, or more. Check the competition for how they rank on the criteria compared to the startup. Choose the top two criteria...

On this episode of Investor Connect, Hall Marchant welcomes Gillian Fenton of LST Strategies, who brings more than 30 years of experience in licensing intellectual property and life sciences transactions, including work with GSK, Emergent BioSolutions, and Biogen, as well as university startups, established life science companies, and investors. Gillian shares how IP supports life science companies from inception through commercialization, explaining that patents are critical for protection and investment attraction, but that trade secrets, contractual rights, and IP-adjacent protections like FDA data exclusivities can also be central depending on the technology. She covers where startups underestimate licensing complexity—especially that li...

Why Build a Financial Forecast Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startups should build a financial forecast for their business. Even if the future is uncertain and all the data is not known, it's still important to build one. Here are the reasons why: It validates the founder's hypothesis. A founder should have a hypothesis about the business. A financial projection helps determine its feasibility. It also determines how much funding to raise. The financial forecast shows the cost to start and run a business. The...

Be Founder-Friendly To Gain More Dealflow Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Founders live in the center of the startup world and thus see many companies raising funding. A startup investor will do well to tap into the knowledge of founders about other startups raising funding. An investor who treats founders well will find they are often amenable to making referrals. Here are some key steps on how to be founder-friendly. Be timely with founders' requests for information such as signed term sheets and invested funds...

Founderflow vs Dealflow Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startup investors spend their day looking for quality deals. There are business plan competitions, demo days, and other formats where founders pitch. Then there's warm introductions and referrals. The quality of these deals tends to be higher. Most investors don't take time to refer a low-quality deal. Instead of looking for dealflow, search for founders Look for successful founders and track their progress. Here are several reasons to track founders: They often know how to find good...

How To Qualify an Investor for Your Startup Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Founders searching for investors need to qualify the investors for their deal. Here are key questions to ask an investor before pursuing your fundraise: Are they currently investing? What was the most recent investment made? How many of your funded companies achieved an exit? How many of those exits were positive? Do you make follow-on investments? Do you lead fundraising rounds or only follow? What operating experience do you have? What do...

On this episode of Investor Connect, Hall welcomes Jake Ryan, Founder and Chief Investment Officer at Tradecraft Capital, a digital asset management firm focused on cryptocurrency, blockchain, and emerging technologies. Jake shares how he moved from software engineering and artificial intelligence into digital assets after early angel investing in a blockchain company and buying his first Bitcoin in 2016, and how his tech background helps him assess long-term project defensibility. He explains Tradecraft's evolution from programmatic discretionary trading to more automated, quantitative trend-following strategies that can go long or short in a 24/7, highly correlated market. Jake discusses what traditional investors misunderstand...

Investing in Climate Tech Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Climate Tech is an up-and-coming investment opportunity. Here are the sectors, benefits, and risks. The key sectors include the following: Renewable energy such as solar, wind, and geothermal. Carbon capture for capturing, storing, and utilizing carbon emissions. Sustainable transport such as electric vehicles. Smart agriculture such as vertical farming. The benefits of investing include substantial subsidies from the government. Also, the application is worldwide and will last a long time. The risks include the following: Many...

How to Diligence an AI Startup Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Artificial intelligence companies bring new challenges to the diligence process. Here are the key steps to diligence an AI startup: Does the AI startup have a clearly defined market that needs the product? How competitive is the startup over other providers? How well does the product fit the customer's needs? Does the company have a clear growth strategy? What type of data does it need, and can it find enough to meet the growth...

Technical Due Diligence Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investing in startups requires due diligence. In addition to financial diligence, an investor should consider technical due diligence. Here are the key areas to review for technical due diligence: Scientific risk. This is the risk in deep tech startups that comes from basic science. Look for startups that have de-risked science. Technical risk. This is the risk that comes from designing the product. Look for a clear plan on what to build. Check the skills of the...

Why VC Funds Should Build a Community Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. A community is a network of contacts who come together for a common cause. Venture capital funds should build a community. Here are the reasons why: A community will generate more and better deal flow. Those in the network will know of the venture capital fund and will send deal flow automatically. Having a community positions the fund as an anchor for the network. This generates credibility for the fund. A community provides...

How To Validate the Startup's Potential Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors considering funding a startup should test the startup's potential. Here are some key techniques for evaluating the startup. Try to sell the startup's solution to a potential customer. Gauge their reaction to the product and its price. If accepted, then this validates the value proposition of the company. Assess the challenge in selling the product. Promote the product or service to one's social media network. Gauge the response to see how many would...

On this episode of Investor Connect, Hall welcomes Al McGregor, COO of Perfect Energy, Inc. & AgroEnergy Farms, Co. Through Perfect Energy in Colorado with partners in Texas, Al connects solar and wind generation to practical commercial and agricultural use, arguing renewables and fossil fuels must be balanced to preserve fossil fuels for hard-to-electrify needs like big trucks and airplanes. Through Agro Energy Farms, he focuses on helping small farms by turning underused land into productive assets with on-farm solar and small wind, controlled-environment greenhouses, and hydroponic systems that can save up to 80–90% of water while producing 10–15x more per area, even...

Regulatory Around the Fund Manager Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are regulations around the fund manager. A fund manager is considered an investment advisor, which is defined as anyone who provides advice to others regarding securities in exchange for compensation. VC fund managers must register with the SEC unless they qualify as an exempt reporting advisor. They are not required to report if they do meet certain asset requirements. Assets under management less than $25M register with the state rather than the SEC. Assets...

Regulatory Around the Fundraising Process Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are regulations around startup funding. These regulations provide an exemption from the securities laws. Here's a list of key regulatory terms to know: Rule 506b Founders or issuers of a stock can raise an unlimited amount of capital. They can raise from an unlimited number of accredited investors. They are allowed up to 35 non-accredited investors such as family and friends. They must not use general solicitation. Rule 506c Founders can raise from general solicitation...

Regulatory for Private Funds Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Regulatory for private funds includes venture capital funds. VC funds can find an exemption from regulatory requirements by one of the following: Having fewer than 100 owners in the fund. This excludes entities created for the purpose of investing in the fund, such as SPVs or Special Purpose Vehicles. This is known as Section 3(c)(1). A qualifying venture capital fund can have up to 250 beneficial owners if the fund is less than $10M. It must pursue a...

Automating Your Dealflow Process Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startup investors see a tremendous amount of deal flow. Finding quality deals is the challenge. Here are some key steps to automate the dealflow process: Set up tools to search for founders with a specific background. For example, one can set a search to find founders from Y Combinator or Techstars. Search for founder configurations. One can search for startups with two co-founders, which in some analyses, have a higher success rate. Search for early-stage startups...

Key Criteria for Venture Capital Investment Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Venture capital requires a specific type of startup to meet its investment objectives. Here's a list of key criteria VCs look for: Large market size. The market is large and growing fast. This provides the startup numerous opportunities to find a position in the market. Large market population. The market population provides ample opportunity to scale the startup. Short sales cycles. The startup can close customers quickly and at a relatively low cost. Amenable...

On this episode of Investor Connect, Hall welcomes Andrew Kazlow, entrepreneur, writer, and host of The Diligent Observer. Andrew shares how he moved from an engineering background into the business side of industrial automation, then returned to Texas A&M for an MBA where he studied what's "broken" in angel investing and found that volunteer-driven investor networks often create a slow, painful process for founders, especially around due diligence. He explains what angels commonly overlook, starting with self-awareness and having a clear investing strategy, then emphasizes prioritizing demand-side validation over product excitement and using frameworks such as team, tech, and...

How To Handle Soft Commitments Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors provide soft commitments to hold their place in a fundraise but delay the actual investment. The soft commitment is not legally binding. Investors often provide soft commitments while they go through their own diligence process. It's often the case that the investor drops out before making the investment. Here are some steps the founder can take to close a soft commitment: Make it clear other investors are joining the round now by listing their...

How To Perform Due Diligence on an Investor Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In raising funding, the founder should be doing as much diligence on the investor as the investor is doing on the startup. Here are some key steps to perform due diligence on an investor: What type of investor are they? Angel, venture capitalist, family office, other? What is their track record in investing? Have they invested for a short period of time or for a long time? What type of network do...

The Basic Due Diligence Process Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors funding a startup must first complete the due diligence process. The objective is to understand all the particulars about the company and the team. Here is the list of the basic due diligence process: The investment. This includes the term sheet, other investors in the round, and dilution impact. Financials. This includes the income statement and balance sheet. If they have revenue, then how much is recognized and when? Do they have debt on...

The Importance of Vesting Shares Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Vesting shares means taking shares granted to an employee and having them earned over time. A typical vesting schedule is four years with a one-year cliff. This means the employee granted shares will not have ownership of the shares for the first year. At the end of the first year, the employee now owns 25% of the shares granted. After that, the employee earns another 25% each year, and after four years from the start, the employee...

What Is Reverse Due Diligence Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Due diligence is the process of reviewing the condition of a company to be acquired. The purpose is to understand the company's current status, including risks, assets, liabilities, and potential opportunities. Reverse due diligence is when the company being acquired reviews the condition of the acquirer. Here are several reasons why one would execute reverse due diligence: This validates the financial stability of the acquirer. The acquisition process takes at least six months and requires...

In this episode of Investor Connect, we welcome Jason Taylor, founder and president of CodeLaunch, who shares how he created the program in 2012 to help early-stage tech founders overcome the catch-22 of needing a product to raise funding but needing funding to build the product. Jason explains how CodeLaunch runs regional competitions that narrow hundreds of applicants down to six finalists per region, then pairs each finalist with a three-person team of elite improving developers for an intense pre-event build session designed to accelerate and polish products for launch and fundraising. He also discusses what makes CodeLaunch different—no equity ta...