Six Months To Build, Six Months To Sell

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Building a minimum viable product or MVP is a key step in a startup launch.

After some market research, there's an ideation step on what to build.

The rule of MVPs is that it should take no longer than six months to build and no longer than six months to sell.

If you can't build it in six months, then you are scoping the solution too broadly.

It's best to reduce the features and functionality so you can go to market sooner.

It's the customer interactions that count, not the number of features in the MVP.

If you can't sell what you built in six months, then you built the wrong thing.

The key here is to sell it first, then build it.

Show the concept to potential customers and take pre-orders for it with some money down.

This will most likely be at a greatly discounted price.

Instead of focusing on the revenue, look for what the customer finds most valuable about the product.

Customers may say one thing, but paying money indicates what they really want.

Consider these steps in building your MVP.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

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Founder Dilution

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Founders raising funding incur dilution.

Their ownership stake goes down as they raise more funding.

Founders start with 100% ownership.

Each round of funding dilutes them by 25% or more.

On average, founders own 60% after the pre-seed and seed rounds.

After a Series A, they own 45%.

After a Series B, they own 26%.

After a Series C, they own 25%

After a Series D, they own 11%

There are often two to three founders in a startup, so they split this amount.

Investors should consider the impact of dilution on the founder's ownership stake.

If they own too little of the company, they may not find the incentive to carry it to an exit.

Founders should consider funding strategies that are more capital-efficient.

For example, after one round of funding, the company could grow based on revenue and profits alone.

This may take longer, but it will reduce the dilution.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.

Sizing Your VC Fund

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In raising a VC fund, the size of the fund is a key component.

Here are the factors that impact the size:

The stage of startup.

The later the stage, the larger the fund size.

Sectors targeted.

Some sectors, such as life science, will require larger check sizes.

Percent ownership

The larger the target ownership, the larger the fund size.

Target number of investments.

The earlier the stage, the larger the number of investments to be made.

Follow-on funding.

Funds that follow on will need to raise more capital.

Size of team.

The larger the team, the greater the fund size.

Consider these factors in the size of your VC fund.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.