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How To Win A Startup Pitch Competition

startup pitch competition

Winning a pitch competition is an exciting accomplishment for a startup, even if an investment doesn’t immediately follow. It means the company has convinced judges that it has a compelling idea, large market opportunity, and an experienced team to bring the product or service to market successfully.

The Basics

Winning a pitch competition is not the same thing as getting an investment. The goal is different; as is the way it is presented. Knowing who the judges are is an important element in planning the strategy. If the judges are investors, then the pitch should be similar to one that would be presented to them. If the judges are other founders or people from entrepreneur support organizations, another strategy is called for. If the judges are from an organization that is sponsoring the event, depending on what their business is, a completely different strategy is needed.
For all of the above audiences, it is assumed that the pitch competition is being held in front of an audience, probably in a large room. In this situation, the slides should be engaging with photos or graphics that are easily discerned. If charts are used, they should also be large enough to be seen from the back of the room.
The pitch competition is a performance. It should be exciting! The presenter should be confident and want the attention to remain on his voice and persona, with the slides serving as enhancements to the story he is telling. And it is a story. It should have a beginning, middle and end. The story is about what the company does that is amazing and saves people time, money, sorrow, lives, or making people happy.
Let’s assume there is a 10-minute time limit. Ten minutes is enough time to tell the audience why the company was started, who started it, how the product or service works, what industry the company fits into, how the company will attract the people they are helping (customers), why the company will be successful, the impact it is currently having, and how an investor can play an important role in bringing the solution to others.

pitch competition

We’ll take each necessary slide in turn, but first let’s set the stage…
In a pitch competition, there will be several pitches in the lineup. Going first or last is desirable because the first pitch is when people are the most focused and the last pitch leaves an impression with the judges. The in-between pitches must stand out to be remembered by the audience at large. The goal is that the judges are taking the competition seriously and taking copious notes to recall what they liked or not about each pitch. Even the serious, dedicated judge will have his/her attention flag if there are more than 4 pitches to score. It’s inevitable. The middle presenters must do what they can to capture the attention of the judges and keep it for the duration of the pitch.
Understand that this is a performance. Do actors write a script and then go out and perform it for the first time in front of an audience? They do not. They practice and rehearse. They tape themselves and ask for input. They memorize the lines and then practice the intonations and the gestures they will use. They practice movement. They have marks on the floor to hit for certain points. This applies equally well for a pitch presentation. First, hone the slides. Then practice the script. Yes, it’s a script. Script it all: the pauses, the jokes, the pregnant pauses; all of it.

Practice 10 times by reading it, without slides. Practice 10 times in front of a mirror, without slides. Practice 10 times with the slides. Record the 11th time. Go perform it in front of a critical judge (no mothers please). Ask what they liked or not. Ask them to summarize what your product does and who it helps. Ask what was the best part; what was the worst part, hardest to understand or seemed disjointed. Now, go view the recording. Does what your “judge” critiqued as rough parts show as rough parts in the recording? Can you match what the person said to the recording? Can the script be changed to add clarity, humor or understanding? If so, do it then practice again, first reading, then in front of the mirror and then with the slides. Record yourself again. Practice a minimum of 40 times prior to pitch day.

To stand out and win, a pitch needs to tell an engaging story that paints a clear picture of the problem the startup is solving, why it’s important, and how its solution works. Simply reciting facts and figures is a surefire way to lose the judges’ attention. Most founders start a company because they have experienced some pain point and want to solve it for themselves. This is a good starting point for the story of why the company was created and the people it will serve. There should be some drama in the origin story, so if it didn’t naturally have drama, edit the story so that it does. Saying that “I could never send my large files through email and hated breaking them into smaller files” is much more boring than “I kept having to send large files to other tech companies and it was costing me an arm and a leg and 2 days to have a courier pick up a drive and deliver it to the customer, so I created an online place with unlimited storage and made it easy for others to access my files. That’s DropBox. One is completely accurate, the other paints a picture. Work on creating a vibrant picture of the problem, and the solution.

pitch competition

Let’s get into the key slides of a pitch deck…

The Problem

The presenter should start by vividly describing the problem the startup is solving in a way that resonates emotionally with the judges. They want the judges feeling the pain and frustration their target customers experience. The best problems to solve are big, obvious “gushing artery” type issues rather than minor “paper cuts.” The audience should be able to see the slide and recognize the problem. If it’s a technical problem, the problem should include how much time/money is wasted because the brilliant solution has not existed in the market yet. The problem is only one slide, two at most. If the problem cannot be made clear in two slides, it is not a big enough problem to spend time solving.
The Solution
Once the problem is clear, the startup’s solution should be explained in a straightforward, easy-to-understand way. If there were 3 parts to the problem, the solution should address each one of them.
Now the story can be finished and the startup takes the hero role by providing the solution to the story that ended in frustration at the top of the pitch. Warning: Do not show screenshots, do not show graphs for this. Tell the audience how it works, do not show the steps. Instead, show the happy users of the solution.
The Market
The pitcher needs to convince the judges there is a massive market opportunity by quantifying the total addressable market size with credible third-party data. Investors are used to hearing about TAM SAM and SOM. TAM is the total addressable market and it should be a researched number. This is the total amount being spent in the world for this industry. SAM is the Serviceable available market, and is a subset of TAM. This also should be a researched number. It will often be the beachhead market the company intends to attack. If the TAM is worldwide sales in an industry, SAM will often be the US market. Finally, SOM is the Obtainable Market and is a projection of Revenue in a time bound period, say 5 to 7 years. SOM is hard because it involves sales projections, but more than that it is forward looking at how the business will grow and what markets it will attack second and third. It involves making an estimation of how much revenue the first market should be generating before attacking the next market. There is a lot of research to be done to get to a reasonable SOM. A slide that shows a percentage of SAM or TAM is evidence that the founder has not done the research necessary to plan for business growth and has not done enough analysis to understand where his first several markets are located.

The Business Model

How will the startup make money? The primary way the product is sold should be clear. It is Business to Business, a SaaS, software as a service model or Direct to Consumer. If the product is sold only to the government, it should be clear. This slide should show what the customer pays for the product, costs if it is a physical product and any tiers of pricing.

Traction

Traction is revenue. Anything else is milestones. While milestones are better than nothing, judges will be most impressed by real customer traction and revenue. If the startup has sales to highlight, no matter how modest, the slide should include this information. If the founder knows the CAC, cost to acquire a customer and LTV, lifetime value, it should be on this slide. LTV takes a longer time to establish than the cost to acquire a customer, but this can be noted in narration and a guess can be made as to the number of years the company will retain its customers. Please focus on paying customers rather than downloads or other stats that make the founder feel good, but not an investor.

The Team

Investors invest in the jockey, not just the horse. If the team has founders who have had exits or acquisitions, the slide may be presented earlier than normal. Because investors do invest in the jockey, if the founders have had successful exits, this will cause immediate interest by the investors. If the judges are lay people, it may not. The team slide should have pictures of the founding team. It should include the role each person has within the company, and a few bullet points for each team member that show accomplishments, banner former companies or great institutions. Including logos instead of names of institutions is more interesting and space saving. The purpose of the slide is to create faith that this team of founders can be successful with this company. If the founders are young, they may include up to two advisors, as long as the advisors have given consent and actually do have regular meetings with the founders.

The Ask

If seeking investment, the Ask slide should be very specific about the amount, investment vehicle, and terms. The vehicle can be debt, a convertible note with a discount (or not) and valuation cap, a SAFE (Standard Agreement for Future Equity) or a priced round of shares. Most of these have a component that suggests the current valuation of the company. This should be on the slide and not left to the imagination. When pitching to investors, it absolutely must be on the slide, or the investors will think the company is hiding something. Use of Funds should also be on the slide as either bullets or a pie chart with amounts of the raise and where and to what the funding will be allocated. One bullet can show the length of the time the funding is planned to carry the startup forward. In narration, milestones the funding will achieve can be shared.

The Close/Thank you

As the last slide is visible, the presenter should tie the opportunity back to the original problem and reiterate in a memorable way by rallying the audience around the startup’s vision for change and the bright future it will create. The last slide should have the logo, “Thank You”, and contact information. The pitcher should make sure to include contact info at the end so investors can easily follow up.

Above all, the pitcher should practice diligently, watch their pacing and timing, create visually impactful slides, and bring relentless energy and enthusiasm to the pitch. By nailing the key elements above in a compelling presentation, a startup will bolster its chances of winning over the judges.

Professional Maggie Saling startup nevada 1

Written by Maggie Saling, COO of StartUpNV

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SEO Strategies For Startups 101

In the competitive world of startups, having a robust online presence can make a significant difference in your success. Search Engine Optimization (SEO) is a critical component of digital marketing that can drive organic traffic to your website and increase your brand visibility. However, many startups overlook SEO or struggle to implement it effectively due to limited resources or expertise. In this guide, we’ll explore essential SEO strategies tailored for startups to help boost your online visibility and attract more customers. Enjoy this list of SEO Strategies For Startups!

SEO for startups

1. Keyword Research and Targeting

Start by conducting thorough keyword research to identify the terms and phrases your target audience is searching for. Use tools like Google Keyword Planner, SEMrush, or Ahrefs to discover relevant keywords with decent search volume and low competition. Focus on long-tail keywords that are specific to your niche and product offerings. Incorporate these keywords naturally into your website content, including landing pages, blog posts, and product descriptions.

Long-tail keywords in SEO are longer, more specific phrases that users typically search for when they are closer to making a purchase decision or seeking very specific information. These keywords often have lower search volumes compared to broader, more generic keywords, but they can be highly valuable for attracting targeted traffic to your website. Here are some examples of long-tail keywords:

“Best vegan restaurants in San Francisco”

This keyword specifies a particular location and niche (vegan restaurants), targeting users looking for specific dining options in a specific city.

“How to train a Labrador puppy to sit”

This keyword is specific and targets users seeking detailed information on a particular topic (dog training) related to a specific breed (Labrador).

“Affordable graphic design courses online”

This keyword targets users looking for specific information about online courses related to graphic design and emphasizes affordability.

“Women’s organic skincare products for sensitive skin”

This long-tail keyword targets users looking for skincare products specifically designed for women with sensitive skin and who prefer organic options.

“Best budget-friendly DSLR cameras for beginners”

This keyword is specific and targets users who are beginner photographers looking for affordable DSLR cameras.

“What are the symptoms of gluten intolerance in children”

This long-tail keyword targets users seeking specific information about gluten intolerance symptoms in children.

“Local coffee shops with outdoor seating near Times Square”

This keyword specifies a location (Times Square) and a specific amenity (outdoor seating) that users are interested in.

“How to fix a leaking faucet without calling a plumber”

This keyword addresses users looking for DIY solutions for a common household problem (leaking faucet).

“Best ergonomic office chairs for lower back pain under $200”

This keyword targets users looking for specific office chairs that address a particular need (lower back pain) within a specific budget range.

“Organic gardening tips for beginners in small spaces”

This long-tail keyword targets users interested in organic gardening but specifically tailored for those with limited space.

keyword research tools for seo for startups

2. Optimize Your Website Structure

A well-structured website not only enhances user experience but also improves SEO. Ensure your website is mobile-friendly, as Google prioritizes mobile-responsive sites in its search rankings. Create a clear hierarchy with intuitive navigation to help users and search engines easily navigate your site. Optimize page loading speed by compressing images, utilizing browser caching, and minimizing HTTP requests.

Image resizing is an important aspect of SEO (Search Engine Optimization) as it can impact website performance, user experience, and ultimately, search engine rankings. Here are some popular image resizing tools that can help optimize images for SEO: 

Make sure to maintain your image aspect ratio, optimize the file size, use descriptive file names, and add alt text!

seo for startups

3. Create High-Quality Content

Content is king in the world of SEO. Develop a content strategy that aligns with your business goals and resonates with your target audience. Publish blog posts, articles, guides, and videos that provide value, solve problems, and answer common questions related to your industry. Aim for original, engaging, and shareable content that encourages backlinks from reputable websites—this can significantly boost your SEO rankings. Tools like SurferSEO make it easy to research what type of content will perform best! 

4. Local SEO Optimization

If your startup targets a local audience, optimize your website for local searches. Claim your Google My Business listing and ensure your NAP (Name, Address, Phone Number) details are consistent across all online platforms. Encourage customers to leave positive reviews, as they can enhance your local SEO rankings. Additionally, leverage local keywords in your headings and meta tags to attract nearby customers.

local SEO optimization

5. Build Quality Backlinks

Backlinks are crucial for SEO success. Focus on acquiring high-quality backlinks from authoritative websites within your industry. Guest posting, influencer collaborations, and participation in industry forums are effective ways to build backlinks organically. Avoid spammy link-building practices, as they can negatively impact your website’s reputation and SEO rankings. As always, creating engaging and informative content is the best way to acquire backlinks- you need to create content that others will want to share! 

 

6. Monitor Performance and Analytics

Regularly monitor your website’s performance using tools like Google Analytics and Google Search Console. Analyze key metrics such as organic traffic, bounce rate, click-through rate (CTR), and keyword rankings. Use this data to identify areas for improvement and adjust your SEO strategy accordingly. A data-driven approach will help you make informed decisions and maximize your SEO efforts. 

Keep track of the pages that bring your website the most organic traffic- these are your highest performing organic search pages. It’s important to keep these pages up to date in order to maintain your search position. 

google analytics seo for startups

7. Stay Updated with SEO Trends

SEO algorithms and best practices evolve continuously. Stay updated with the latest SEO trends and algorithm changes to ensure your startup remains competitive in search rankings. Follow reputable SEO blogs, attend webinars, and participate in industry events to stay ahead of the curve.

 

AI & SEO: Embracing Innovation

In the era of AI, particularly with the advent of tools like ChatGPT, there’s a natural question that arises: Is SEO (Search Engine Optimization) becoming obsolete? The answer is quite the opposite—AI is revolutionizing SEO practices, making them more efficient and effective than ever before.

AI-driven tools like ChatGPT have transformed content creation for SEO. These tools can generate high-quality, optimized content quickly and efficiently. By leveraging natural language processing capabilities, ChatGPT understands user intent and can craft content tailored to specific keywords and topics. This not only streamlines content production but also ensures that content aligns with SEO best practices. The enhanced speed alone makes using these tools worth some consideration when crafting your SEO strategy.

Far from rendering SEO obsolete, AI technologies like ChatGPT are catalysts for innovation in the SEO landscape. By embracing AI, businesses can adapt to evolving search engine algorithms and consumer behaviors. Integrating AI into SEO strategies is essential for staying competitive and maximizing online visibility and growth.

AI, exemplified by tools like ChatGPT, Scribe, Claude, and Github Copilot is not the death knell of SEO; rather, it is a driving force behind its evolution. Marketers who leverage AI for content creation, user experience enhancement, data analysis, and automation will be well-positioned to succeed in the ever-changing digital ecosystem. Embracing AI innovations is key to unlocking the full potential of SEO in the modern age.

Wrapping up SEO Strategies for Startups

Implementing effective SEO strategies can significantly impact the growth and success of your startup in the digital landscape. By focusing on keyword research, website optimization, content creation, and link building, you can improve your search engine rankings, attract more organic traffic, and ultimately convert visitors into customers. Remember that SEO is a long-term investment—consistency and patience are key to achieving sustainable results. Start small, track your progress, and refine your strategy over time to maximize your startup’s online visibility and reach. With dedication and the right approach, your startup can thrive in the competitive organic search field. 

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8 Reasons Nevada Is The Best State For Startups

The Silver State isn’t just an oasis of entertainment; savvy entrepreneurs know that Nevada offers a winning hand for business ventures. From cutting-edge innovations in blockchain and artificial intelligence to traditional industries like mining and agriculture, Nevada is where tech meets tradition in the most unexpected ways. It’s like being on the frontier of discovery—only with air conditioning!

Discover the top 8 reasons why Nevada is the ultimate destination for startups looking to thrive.

 

Something (or Somewhere) for Everyone

Nevada’s varied landscapes make it an outdoor enthusiast’s paradise and a thriving scene for city dwellers alike. The state offers everything from hiking and skiing in Great Basin National Park and Tahoe to world-class entertainment and dining in Reno and Las Vegas. This blend of natural beauty and urban sophistication caters to all lifestyles and can be a great bonus for businesses looking to entertain or team-build.

Choose Your Climate:

If you love four seasons or winter sports, Northern Nevada has you covered. Need a break from the startup grind? Take the afternoon to ski at one of the many world-class ski resorts, paddle board on Lake Tahoe, or hike up to Angora Lakes for a refreshing jump off the cliffs.

Do you prefer never to touch a snow shovel, and podcast poolside all year long? Southern Nevada boasts over 300 days of sunshine per year. When you need a break from the startup grind, you can take a hike in Red Rock Canyon, catch a show on the Strip, or try your luck at the blackjack table (but not with your investors’ money!).

It’s not just the landscape in Nevada that is diverse, the breadth of industries that thrive in Nevada is almost as wide as the desert stretches.

 

Growing Economies

Nevada is home to rapidly growing industries, providing ample opportunities for startups to scale. The state’s economy is diversified with key industries including technology, tourism, healthcare, manufacturing and logistics. The presence of major companies and industry leaders in these sectors creates a favorable ecosystem for startups to tap into existing networks and leverage partnerships, plus help to attract more investors and venture capitalists, increasing the availability of funding for startups.

Here are some emerging sectors in Nevada and why they’re attracting startup innovation:

  1. Renewable Energy:

Nevada’s abundant sunshine and open spaces make it an ideal location for renewable energy innovation, particularly solar power. With ample opportunities for solar farms and rooftop solar installations, startups in the renewable energy sector are capitalizing on the state’s favorable climate conditions and supportive policies to drive innovation in clean energy technologies. Additionally, initiatives like the Renewable Energy Tax Abatement Program incentivize investment in renewable energy projects, further fueling growth in this sector. 

One of the most significant contributions of Elon Musk to Nevada is the construction and operation of the Tesla Gigafactory located near Reno. The Gigafactory is a massive lithium-ion battery and electric vehicle (EV) production facility that plays a crucial role in Tesla’s mission to accelerate the world’s transition to sustainable energy.

Portfolio Company Feature: Terbine collects data from Internet of Things devices and packages the data into usable information for planning, including creating digital twins of cities.

  1. Aerospace and Defense:

Nevada’s vast airspace and proximity to military installations like Nellis Air Force Base and the Nevada Test and Training Range make it a prime location for aerospace and defense startups. With opportunities for research, development, and testing of unmanned aerial vehicles (UAVs), space exploration technologies, and defense systems, startups in this sector benefit from access to specialized facilities and expertise. 

Portfolio Company Feature: SEEID

SEE ID is a real-time asset tracking, edge data source and secure access controller company. They leverage the latest technologies including their own patented passive RFID tracking solutions, low-power BLE, GPS, AR/VR, Edge Camera Platforms utilizing AI, and more to build the future of real-time tracking.

  1. Advanced Manufacturing:

Nevada’s strategic location, transportation infrastructure, and skilled workforce position it as a hub for advanced manufacturing startups. With opportunities in industries such as electronics, aerospace, and biotechnology, startups are leveraging technologies like 3D printing, automation, and robotics to drive innovation and efficiency in manufacturing processes. Moreover, initiatives like the Workforce Innovation for the New Nevada (WINN) Program provide funding and support for advanced manufacturing projects, fostering growth and competitiveness in this sector. 

  1. Healthcare and Biotechnology:

Nevada’s growing population and demand for healthcare services create opportunities for startups in the healthcare and biotechnology sectors. With access to research institutions like the University of Nevada, Las Vegas (UNLV) School of Medicine and the Cleveland Clinic Lou Ruvo Center for Brain Health, startups are developing innovative solutions in areas such as telemedicine, medical devices, and pharmaceuticals. Additionally, initiatives like the University of Nevada Reno’s Nevada Center for Applied Research (NCAR) provide resources and support for healthcare and biotech startups to accelerate their growth and commercialization. 

Portfolio Company Features: 

Adaract: Adaract introduces a stronger and lighter solution with their artificial muscle actuators. 

SurgiStream: Surgistream offers a digitized platform for healthcare professionals to manage patient communication, scheduling, and medical clearance tracking. 

  1. Artificial Intelligence:

Nevada’s AI industry has been gradually expanding, driven by factors such as the increasing adoption of AI technologies across various sectors, including gaming, entertainment, hospitality, healthcare, and autonomous systems. Nevada has been at the forefront of autonomous vehicle testing and deployment, thanks to its supportive regulatory environment and infrastructure. AI startups focusing on autonomous systems, robotics, and drone technology may find Nevada an especially attractive location for development and testing.

These industries represent just a glimpse of the diverse opportunities for startup innovation in Nevada. With its supportive business climate, skilled workforce, and strategic advantages, Nevada continues to attract entrepreneurs and startups looking to turn their innovative ideas into reality.

Portfolio Company Features: 

AI.xyz: AI.XYZ is a life management tool providing customized suggestions, ideas and support through a personalized AI.

Lucihub: Lucihub lets brands create affordable, professionally edited videos at speed and scale without a production team

TensorWave: The next wave of AI compute for all your AI workloads powered by AMD’s Instinct™ MI300X accelerators.

 

Tax Advantages

One of the major advantages of starting a business in Nevada is the favorable tax environment. The state has no personal income tax, no corporate income tax, and no franchise tax. This means that startups can retain more of their hard-earned cash and allocate it toward business growth and development. Additionally, Nevada offers various tax incentives and exemptions for businesses, such as sales tax abatements and property tax abatements, further reducing the tax burden on startups.

It’s like hitting the jackpot without even stepping foot in a casino!

Thriving Business Ecosystem

Nevada offers a business-friendly environment with low taxes and minimal regulatory hurdles, facilitating swift startup launches and expansions.

Extremely Business-Friendly Environment

Nevada’s business-friendly policies, including low taxes and minimal regulatory hurdles, create an attractive environment for startups. With a streamlined process for business registration and licensing, startups can quickly establish a presence in Nevada and focus on driving sales growth without unnecessary bureaucratic delays.

Infrastructure and Connectivity

Nevada’s metro cities boast modern infrastructure and connectivity, including transportation networks, telecommunications infrastructure, and access to high-speed internet. These assets facilitate commerce, logistics, and communication, enabling businesses to operate efficiently and compete on a global scale.

The Boring Company and Hyperloop have the potential to impact transportation infrastructure in Nevada and beyond. While these projects are still in the development and testing phases, they represent Elon Musk’s vision for futuristic transportation systems throughout the state, including underground tunnels and high-speed hyperloop networks.

Economic Diversity and Innovation

The state’s efforts to diversify its economy beyond gaming and hospitality have garnered attention, leading to rankings among the top states for economic diversification and innovation, contributing to stability and resilience even in times of economic uncertainty. 

Organizations such as the Nevada Governor’s Office of Economic Development monitor and highlight Nevada’s progress in various fields. 

Supportive Government Programs & Legislation

Nevada’s government offers a range of programs and incentives designed to support businesses at every stage of development. From grants and tax credits to workforce training and infrastructure investments, these initiatives provide startups with the resources they need to succeed and thrive.

In 2023, Nevada became the first state to pass two important pieces of legislation for entrepreneurial growth; AB77 & AB75. 

AB77, also known as the Right to Start Act, established a dedicated Office of Entrepreneurship within the Governor’s Office of Economic Development (source: https://thenevadaindependent.com/article/new-initiatives-propel-entrepreneurship-in-nevada)

AB75, or the Nevada Certified Investor Act, makes startup investing more accessible to Nevadans by reducing the income levels required to invest in Nevada-based startups. More on this later!

Startup Community

With a strong and growing network of industry professionals, mentors, and resources, startups in Nevada have access to the guidance and support they need to succeed. The availability of co-working spaces, incubators, and accelerators further enhance the opportunities for startups to thrive in Nevada, and many programs for startups, like all of StartupNV’s, are no-cost to founders. In addition to a robust presence in Nevada’s more populated cities, Nevada has increased funding and resources for entrepreneurial organizations, including StartupNV, to provide resources to rural communities. 

Curious about Nevada’s startup ecosystem? 

Plus, Nevada’s public sector is notoriously collaborative with in-state innovators. Take the city of Las Vegas, for example, which has two International Innovation Centers, and check out two ongoing partnerships with Nevada-based startups to make the city safer and more innovative.

Databuoy’s SHOTPOINT shot detection technology has been installed in Las Vegas to notify emergency services the minute a gunshot is detected instead of relying on civilians to report it.

Halo Car has partnered with the city of Las Vegas, rolling out its remote-piloted electric car sharing service in 2023.

The presence of research institutions, universities, and industry associations further enhances the supportive infrastructure in Nevada and encourages partnerships and collaborations. Startups can leverage these resources to access cutting-edge research, talent, and industry expertise, driving innovation and growth.

University of Nevada’s Innevation Center in downtown Reno offers a centralized collaboration space with co-working, events, resources, and a makerspace for University and community members to come together. 

Originally a collaboration with Caesars Entertainment, University of Nevada Las Vegas’s Black Fire Innovation center located in the Harry Reid Tech Park welcomes University students, alumni, researchers, and entrepreneurial community members for co-working, events, and bootcamps with an emphasis on gaming, hospitality, and entertainment.

 

Quality of Life

Nevada offers an exceptional quality of life, making it an attractive destination for startups and their employees. The state boasts a diverse range of recreational activities, from outdoor adventures in stunning natural landscapes to world-class entertainment in Las Vegas. 

 A Lifestyle That’s Anything But Deserted

Who says startups have to sacrifice work-life balance? With stunning natural landscapes just a stone’s throw away, weekend getaways to majestic mountains or tranquil lakes are always on the table. And let’s not forget about the world-class entertainment, dining, and nightlife options that make living in Nevada a constant adventure.

Low Cost of Living That’ll Leave You Feeling Like a High Roller

Compared to coastal counterparts like California and New York, Nevada boasts a significantly lower cost of living, allowing startups to stretch their runway further without sacrificing quality of life. From affordable housing and office space to budget-friendly amenities, entrepreneurs in Nevada can enjoy all the perks of big-city living without the hefty price tag.

Outdoor Recreation

Nevada offers residents and visitors a high quality of life and abundant outdoor recreational opportunities, including national parks, scenic landscapes, and recreational activities such as hiking, skiing, and boating. The state’s natural beauty, mild climate, and access to outdoor amenities consistently earn Nevada top rankings for quality of life and outdoor recreation. 

Access to Funding

Startups in Nevada have access to an increasing range of funding options, an often necessary step to grow their businesses. The state offers various grants, loans, microloans, and tax incentives specifically designed to support startups. Additionally, Nevada has a growing network of angel investors and venture capitalists that provide funding opportunities for companies to scale. The presence of investment funds and accelerators is on the rise, further enhancing the access to funding for startups in Nevada.

As of April, 2024, StartUpNV has invested $8.6m into 25 Nevada-based companies, which has a current portfolio of more than $24m.

Created during the 2011 session of the Nevada Legislature, the Governor’s Office of Economic Development (GOED) is the result of a collaborative effort between the Nevada Legislature and the Governor’s Office to restructure economic development in the state. In 2021, as part of the American Rescue Plan Act, Biden reauthorized the State Small Business Credit Initiative to create job opportunities and fund entrepreneurship. 

Nevada invests this money directly into Nevada-based scalable startups. The state’s SSBCI Battle Born Venture fund, championed and overseen by GOED, is an initiative that invests alongside established venture and accelerator firms, including StartupNV, with a dollar-for-dollar match on approved investments. Learn more about Nevada’s small business capital programs here.

In addition to increasing access to funding, Nevada is also addressing access to investing and reducing barriers, and offering education for individuals to become savvy startup investors.

Access to Investing

As mentioned briefly earlier, legislation AB75 has become the first-in-the-nation state to create access-oriented investor laws beyond the SEC’s definition of an accredited investor. StartUpNV is proud to have been involved in championing this historic bill. As defined by the SEC, an accredited investor must have a net worth of $1m, not including their primary residence, or have made >$200,000 for the past two years and expect to do the same for the upcoming year. About 4% of Nevadans meet the federal standard – compared to 13% nationally and over 16% in California. As a result, it is significantly more difficult for Nevada startups to raise local capital. It’s also significantly less likely for Nevadans to grow personal wealth from startup investments – being “forbidden” to invest in this risky but lucrative investment cohort.

AB75 introduced a new standard for intrastate investing: The Nevada Certified Investor (NCI). NCI allows investment in Nevada startups by Nevadans who earn more than $100K per year in wages. If you own a business or do gig work, the standard is $200K in gross sales. The NCI standard enables about 30% of Nevadans to be eligible as startup investors. At the same time, it greatly expands the group of possible investors for Nevada startups.

Access to Investor Education & Dealflow

StartupNV’s AngelNV program is an annual conference fund that invites new and experienced investors to invest at a low minimum of $5k. Not only is the minimum significantly lower than the majority of angel or venture funds, but the investments strictly go to Nevada-based companies. For many, one of the great values as an investor is (optionally) participating in weekly sessions as an investor group evaluating, doing diligence, and interacting with applicant companies alongside seasoned startup investors and analysts to narrow down the potential investments. 

This is a great way to dip your toes into startup investing and learn how to make educated investments, find a new community of like-minded friends, and start building that portfolio! I also recommend (if/when they can afford to) this program as a great low-risk opportunity for startup founders to spend some time on the other side of the table.

StartUpNV facilitates a number of opportunities to engage in startup investing, either as an angel or as part of a venture fund. Investors in any of our initiatives are then added to our InvestorNV syndicate, receiving ongoing deal flow of investment opportunities. 

Strategic Location & Access to Talent

Location, Location, Location

Nevada’s strategic location in the western United States offers several benefits for startups. The state provides easy access to major markets and transportation hubs, making it convenient for startups to distribute their products and reach customers across the country. The proximity to major cities like Los Angeles, San Francisco, and Salt Lake City allows startups to tap into the talent pools and resources available in these areas. 

Expansion

Additionally, Nevada’s central location in the western region makes it an ideal base for expanding into other states. Nevada’s close proximity to international markets, such as Canada and Mexico, provides additional opportunities for startups to expand their customer base. The state’s robust infrastructure, including transportation networks and logistics facilities, enables startups to distribute their products and reach customers worldwide efficiently. 

With a growing population and a steady influx of newcomers attracted by job opportunities and quality of life, Nevada also offers businesses access to a diverse pool of talent. 

An Easy Sell

The low cost of living and absence of state income tax makes it easier for startups to attract and retain top talent. Whether in technology, hospitality, healthcare, or other industries, startups can recruit skilled professionals from around the world to fuel their growth and innovation. Feel free to send potential candidates to this blog to aid in your recruiting efforts ;). 

Melting Pot of Cultures

Nevada’s rich cultural tapestry is as diverse as it is vibrant. From the Native American tribes who have called the state home for centuries to the influx of immigrants who came seeking their fortunes during the Silver Rush, Nevada is a melting pot of cultures and traditions. 

Remote or In-Person Teams

Nevada offers flexibility for startups in terms of team setup. Whether startups prefer remote teams or in-person collaboration, Nevada provides options to accommodate different work styles. The availability of advanced communication technologies and high-speed internet further facilitates remote work and virtual collaboration. Nevada’s airports are easy to fly in and out of, and there is no shortage of accommodations, meeting space, and options for in-person summits, bringing in all your employees from around the world. 

 

Global Sales Funnel

Nevada’s business-friendly environment and strategic location make it an ideal gateway for startups to access global markets. The state’s strong trade relationships and favorable business climate make it easier for startups in Nevada to engage in international trade and establish a global sales funnel.

Las Vegas offers several compelling advantages for startups looking to establish sales and business development teams in the city:

Networking Opportunities

Las Vegas hosts numerous industry conferences, trade shows, and networking events throughout the year, providing valuable opportunities for sales and business development professionals to connect with potential clients, partners, and investors. Events like CES (Consumer Electronics Show) and various industry-specific conventions attract a diverse range of attendees from around the world, making it easier to expand professional networks and generate leads.

Entertainment and Lifestyle Amenities

Las Vegas’s renowned entertainment and lifestyle amenities make it an attractive destination for sales and business development employees. With world-class dining, entertainment, and recreational options available year-round, employees can enjoy a high quality of life outside of work, enhancing retention and job satisfaction.

 

This Blog, Wrapped

Overall, Las Vegas offers startups a strategic location, affordability, a business-friendly environment, networking opportunities, lifestyle amenities, and access to a talented workforce, making it an excellent choice for establishing sales and business development operations.

My personal ask is that if you do settle in the Battle Born state, that you join our startup community! There are several organizations and opportunities to find community throughout the state. If you’ve had success as a startup founder, senior exec, or subject matter expert, please pay it forward by investing your time, knowledge, and/or capital into future generations of innovation. If you’re taking the leap on your first venture, please surround yourself with people who “get it”. Community is important, and while entrepreneurs are known in many ways for their knack for bold independence, I promise we’re all better when we come together.

Let’s face it—Nevada is just plain cool. From its iconic landmarks like the Hoover Dam and Area 51 to its quirky roadside attractions and colorful characters, Nevada is a place where anything is possible. So why choose Nevada for your startup? Because when it comes to chasing your dreams, there’s no better place to roll the dice.

 

Written by Madeline Feldman, VP of Southern Nevada for StartupNV

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venture capital term sheets 101

Venture Capital Term Sheets 101: Important Terms for Investors

venture capital term sheets 101

As an entrepreneur navigating the complex landscape of startup funding, encountering a term sheet is a significant milestone on the journey to securing venture capital investment. Term sheets serve as the blueprint for the terms and conditions of investment deals, outlining crucial details that shape the future relationship between investors and founders.

Understanding these documents is important for entrepreneurs, as they signify the height of rigorous negotiations and mark the beginning of a partnership that can profoundly influence the trajectory of a startup. In this blog post, we delve into the intricacies of venture capital term sheets, decoding common themes and key terms that every entrepreneur should understand. By familiarizing yourself with these essential components, you can approach investment discussions with confidence and strategy, ensuring that you’re well-prepared to seize opportunities and navigate the complexities of startup financing.

What is a term sheet?

A term sheet is a foundational document that outlines the key terms and conditions of a proposed investment deal between entrepreneurs and investors. Think of it as a preliminary agreement that serves as the basis for further negotiation and due diligence. While not legally binding in itself, a term sheet outlines the framework upon which the final investment agreement will be built. It covers a wide range of aspects, including valuation, investment amount, ownership stakes, governance rights, and potential exit strategies.

Essentially, the term sheet acts as a roadmap for both parties, guiding them through the complexities of structuring a mutually beneficial investment arrangement. Understanding the nuances of a term sheet is crucial for entrepreneurs, as it lays the groundwork for the partnership and sets the tone for future interactions with investors.

 

Key Ideas Found in Term Sheets

 

There are many ideas usually outlined in term sheets. Each term sheet is different and personalized for each individual investment. We’ve outlined the most common and need-to-know terms that will have your company flying through term sheets in no time. 

term sheet terms and vocab

Pre- and Post-money Valuation:

Before diving into the specifics of a term sheet, it’s essential to understand the concepts of pre-money and post-money valuation. Pre-money valuation refers to the value of a company before any investment is made, while post-money valuation includes the investment amount added to the pre-money valuation. Investors typically use these figures to determine their ownership stake in the company. As a startup founder, you should consider pre and post-money valuation because they directly impact the dilution of your ownership stake and the overall attractiveness of the investment deal.

Warrants & Dividends:

Warrants and dividends are additional components that investors may include in a term sheet to sweeten the deal or provide additional incentives. Warrants grant investors the option to purchase additional shares at a predetermined price within a specified timeframe, allowing them to capitalize on future growth. Dividends, on the other hand, entitle investors to a portion of the company’s profits. While warrants and dividends can enhance the attractiveness of an investment for investors, founders should carefully consider their implications on ownership dilution and future financial obligations.

Liquidation Preferences:

Liquidation preferences outline the order in which proceeds from a company’s sale or liquidation are distributed among shareholders. Investors often negotiate for preferences that prioritize the return of their investment capital before other shareholders receive payouts. While liquidation preferences provide downside protection for investors, founders should be mindful of their potential impact on the distribution of exit proceeds and the alignment of incentives between shareholders.

Option Pool:

An option pool is a reserve of shares set aside for future employee stock options and equity incentives. Investors may insist on the creation of an option pool as part of the investment terms to ensure that the company has adequate resources to attract and retain top talent. While option pools are essential for employee incentivization and talent acquisition, founders should carefully consider the size and allocation of the pool to avoid excessive dilution of existing shareholders.

Dilution & Anti-Dilution:

Dilution occurs when the issuance of new shares reduces the ownership percentage of existing shareholders. Investors may seek anti-dilution provisions in the term sheet to protect their ownership stake in the event of future equity financing rounds at lower valuations. While anti-dilution clauses safeguard investor interests, founders should be aware of their potential impact on the company’s flexibility in raising additional capital and the dilution of founder equity.

Addition of Board Members:

Investors often negotiate for the right to appoint board members or observers as a means of exerting influence and oversight on company operations. While having investor representation on the board can provide valuable expertise and strategic guidance, founders should carefully consider the implications for decision-making autonomy and corporate governance.

Investors include these key terms in term sheets to safeguard their investment, maximize returns, and align incentives with founders. As a startup founder, understanding these terms is crucial for negotiating favorable terms, preserving equity ownership, and ensuring the long-term success of your venture. By familiarizing yourself with these concepts, you can approach investment discussions with confidence and strategic insight, effectively positioning your startup for growth and success.

 

Benefits To Having a Term Sheet 

 

Securing a term sheet marks a significant milestone in the journey of raising venture capital for your startup. While negotiating and finalizing the terms of a term sheet can be an intense process, the benefits it offers to both entrepreneurs and investors are substantial. Here are several advantages of having a term sheet:

Clarity and Structure: A term sheet provides a clear framework for the terms and conditions of the investment deal, helping both parties understand their rights, obligations, and expectations. By outlining key provisions upfront, a term sheet establishes a structured approach to negotiations and facilitates smoother transactional processes.

Investor Commitment: Receiving a term sheet signals a strong commitment from investors to fund your startup. It demonstrates their confidence in your business model, team, and growth potential, paving the way for further due diligence and closing the investment round.

Time Efficiency: Negotiating and finalizing a term sheet streamlines the investment process by focusing discussions on critical terms and avoiding protracted negotiations on minor details. This efficiency saves time for both entrepreneurs and investors, enabling them to allocate resources more effectively to other aspects of their business operations.

Basis for Due Diligence: A term sheet serves as a foundation for conducting due diligence, allowing investors to assess the legal, financial, and operational aspects of your startup in greater detail. By providing a roadmap of the proposed transaction, a term sheet guides due diligence efforts and accelerates the overall investment timeline.

Investor Alignment: The negotiation of a term sheet provides an opportunity for entrepreneurs and investors to align their interests and expectations regarding the future direction of the company. By discussing key terms and strategic objectives upfront, both parties can ensure that their visions are aligned, fostering a stronger and more collaborative partnership.

Legal Protection: While not legally binding in itself, a term sheet can offer legal protection by documenting the preliminary agreement reached between the parties. It serves as evidence of the intent to enter into a formal investment agreement, mitigating the risk of misunderstandings or disputes during the later stages of the transaction.

Competitive Advantage: Securing a term sheet from reputable investors can enhance your startup’s credibility and appeal to other potential investors. It signals validation of your business model and differentiation in a competitive market, increasing your ability to attract additional funding and strategic partnerships.

 

Venture capital term sheets are indispensable tools that shape the dynamics of investment deals, offering clarity, structure, and alignment for both entrepreneurs and investors. Understanding the key terms and implications outlined in these documents is essential for startup founders to navigate the complexities of fundraising and secure favorable investment terms.

 As entrepreneurs embark on their journey to raise capital and grow their ventures, resources like StartUpNV provide invaluable support and guidance tailored to Nevada-based entrepreneurs and investors. By leveraging the expertise and resources available through startupnv.org, entrepreneurs can access a wealth of opportunities, mentorship, and networking connections to fuel their success in the vibrant startup ecosystem of Nevada. Other tools, like Investopedia or Y Combinator are great resources as well. 

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Nevada Certified Investor

StartUpNV Announces Three New Members on Board of Directors

LAS VEGAS (March 26, 2024) – StartUpNV, Nevada’s business accelerator and incubator for scalable startups, announced that three distinguished community and business leaders will join the nonprofit’s board of directors effective April 1. The new board members are Kacy Drury, Parker Werline, and Michael Sherwood.

Kacy Drury, currently senior vice president for customer experience and operations for Everi Holdings, brings to the board a 20-year career in gaming as well as experience on various community organizations, including serving as a commissioner on the Nevada Veterans’ Services Commission, a council advisor on Veteran’s Voices: Were Listening oral history program at the University of Nevada – Las Vegas (UNLV), a board member on the Women’s Research Institute of Nevada, and a board director on the Community Roots Foundation. She has a Bachelor of Arts in business administration from California State University, San Bernardino.

Parker Werline has nearly a decade of experience in the finance industry. Currently, he is the private equity assistance vice president at Fiume Capital, where he is responsible for critical components of the investment process including conducting due diligence, financial modeling, preparing investment memorandums and evaluating market and industry dynamics. Prior to moving to Las Vegas, Werline served as an investment banking associate for mergers and acquisitions at Morgan Stanley in New York City. He has a master’s degree in business administration (MBA) from the Yale School of Management and a Bachelor of Arts in economics from Vassar College.

 

Rounding out the trio of new board members is Michael Sherwood, the chief innovation and technology officer for the city of Las Vegas. Sherwood has more than 20 years of experience in the fields of process improvement, technology, and innovation. Prior to his tenure with the city of Las Vegas, he served as the deputy director of public safety, business services, and city technology for the city of Irvine, California. He received his Bachelor of Science in management from Pepperdine University and a Master of Science degree in executive management from the University of Southern California (USC). 

 

“The diverse background and experience that Kacy, Parker and Michael will bring to the board of directors is unparalleled,” said Jeff Saling, executive director of StartUpNV. “Additionally, they have demonstrated a staunch commitment to fostering Nevada’s startup ecosystem serving as mentors to entrepreneurs and angel investors involved with StartUpNV’s programs.”

About StartUpNV

StartUpNV is a 501(c)3 non-profit statewide accelerator and business incubator for scalable Nevada-based startups that provides expert mentorship and access to a network of capital partners. StartUpNV’s founders, mentors, university connections, investors, and business partners work together to grow and support a robust, inclusive startup ecosystem in Nevada. StartUpNV’s related venture funds, FundNV, AngelNV, and the new 1864 seed fund, provide startups access to local venture capital along with education for entrepreneurs and angel investors. Since inception in 2017, StartUpNV has heard pitches from more than 1,000 startups, held more than 250 education events, and seen nearly $80 million in venture capital raised for more than 55 companies. For information visit: https://startupnv.org/.

By AMY E. S. MAIER

Senior PR Account Executive

amy@twgpr.com

thewarrengrouplv.com

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how to find a startup mentor

How To Find A Startup Mentor

Whether you are a seasoned entrepreneur or creating your first startup, connecting with a mentor can be one of the most impactful parts of your journey. The potential behind a solid mentor relationship is boundless. They can open doors to opportunities you never thought possible, lead to new connections, and be an incredible support system. While I hope I’ve already convinced you that mentorship is important, you may still be asking yourself questions like: I’m pretty sure I know what I’m doing, do I really need a mentor? Or, maybe I do need a mentor, but where/how do I find one? 

how to find a startup mentor

Why are mentors so important? 

Let’s be honest: you probably aren’t an expert in everything. Having range, also known as being a generalist, is a common quality of entrepreneurs. But it also means that your knowledge of each topic is a little bit limited. Cue the mentors! Leave behind your pride and find a mentor who is a true expert in marketing, business models, or pricing. Hit up that IP attorney or leverage a VC veteran to provide deep industry insight. 

Someone who has “been there, done that” will provide immense value to your own process of building a company. By utilizing the help of a mentor with a specific skill set, you’ll be able to take a deep dive into the specific problem you need to solve. Entrepreneurs like to talk about innovation, but some forget that the key to innovation is utilizing diverse perspectives. Sitting down with an expert who can provide a unique perspective from their own years-long journey is priceless. They will fill in the gaps between what you already know and what you need to know. 

How do I find a startup mentor? 

There are many places to look, so here’s a quick guide: 

  1. Try your local network. Start here first and reach out to someone you know, whether they are friends, family, or acquaintances. Maybe your friend works in a marketing firm, and you know they have a legal department. Ask to get connected with their corporate attorney! Getting a warm introduction to someone is a lot easier than a cold one, and you may get hands-on experiences with a mentor you’re already familiar with. 
  2. IncubateNV through StartUpNV. Our online incubator is hosted on a comprehensive platform with a free curriculum that leads you through the basics of starting and scaling your business. To support that process, we have a community of mentors available to you, which can be narrowed by industry. Available for free, IncubateNV’s online platform is targeted towards Nevada-based entrepreneurs, but open to anyone. Join here today: https://startupnv.org/startups/incubatenv/
  3. IncubateVegas. This 5-week bootcamp runs twice a year for Las Vegas locals. You will be part of a small group, led by a mentor who will meet with you weekly to support your group through the program. Being hands-on means putting in work – and that’s what this bootcamp is meant to do, with a tight curriculum and strong support system. Learn more here: https://startupnv.org/incubate-vegas/
  4. Online networking. While warm introductions yield higher results, there is still so much power in finding someone who fits the exact qualifications you’re looking for. Often used for job hunting or employee-finding, you can repurpose LinkedIn to scout for a mentor! It does help that mutual connections are visible, so perhaps use that to your advantage. Sort people by location, expertise, past jobs (someone who worked at the same company as you will be a good connection point), etc. 

How to set yourself up for success: 

  1. Identify your specific needs. Are you looking for general accountability, help around a specific subject matter, or some industry insight? Knowing the answer to this first will help you find the right mentor, and may even help you develop the right questions to ask once you get connected. 
  2. Cross reference your needs with a mentors’ expertise. If you’re able to, check out a mentors’ experience prior to reaching out to them. You can do this on the IncubateNV platform, where each mentor’s profile will display their expertise and bio. Maybe even search through their LinkedIn where you can review their previous jobs, industries, and interests. The main goal is to make an informed choice of which mentors you connect with. (Pro tip: Choosing a mentor with entrepreneurial experience can be especially helpful, as they’ll understand the unique circumstances of a startup founder.) 
  3. Think about your preferred mentoring style. Light communication may work for some while regularly scheduled meetings are better for others. It’s okay to have a one-time meeting, where you get the information you need and move on. Additionally, how hands-on do you want them in your mentoring sessions? Some mentors are willing to roll up their sleeves more than others, but what would be most beneficial to you? 
  4. Be diligent in your meetings. It’s up to you to lead the relationship. Make the first move, suggest a time and date, and be on time! “Come prepared with questions, asks, and successes,” says Christina Del Villar, a long-time startup mentor and marketing expert. Setting the expectation upfront is very important to developing a trusting relationship, and proves that you are serious about your startup.

How many meetings should I have? 

An effective mentoring relationship can be long term, or consist of just two meetings! Quality over quantity definitely applies here, and if you’re connecting on a specific topic, it’s not always necessary to have a prolonged meeting schedule.

If you’re going for a multiple meeting relationship, make sure to set yourself up well. We often suggest having an initial meeting as an intro, where you might clarify your needs, expectations, and background of yourself and the company. You may even bring up your preferred mentorship style. Coming to the meeting prepared with your tasks will show your mentor that you are serious. 

How to have a good relationship with your mentor: 

  1. Make sure you’re compatible! The mentor and mentee need to “click.” Irina Tsetsura, one of our product operation mentors, says that “both [people] should be excited about each other’s work, experience, and what you are working on.” Developing a positive relationship from the beginning will be rewarding and allow you to have more productive rapport with your mentor. 
  2. Follow-up and be reliable. Irina also stresses the importance of “respond[ing] and diligently follow[ing] through on the goals and commitments established during mentorship sessions” as a mentee. By doing the homework your mentor gave you, it proves that you value their time and will continue to uphold your end of things. The relationship works both ways: your mentor supports you, and you do the work. 
  3. Be a beginner. One of StartUpNV’s marketing mentors, Stephanie Jiroch, adds this about mentor relationships:

When it comes to building a good relationship with a new mentor, don’t be afraid to be a beginner. The reason you joined forces with a mentor is to gain access to resources and knowledge to support your growth and evolution – both in business and as an entrepreneur. Too often, I see entrepreneurs who are afraid of looking ‘dumb’ and do not ask the questions that will help them grow, launch, or scale. To get the most out of your mentor/mentee relationship, lean into the learning process, ask the questions, and be open to what could be done differently so that you can succeed.” 

  1. Don’t turn a conversation into a debate. Peter Ciulla, another StartUpNV mentor who specializes in hardware tech and cleantech, leaves founders with this nugget of information regarding successful conversations: 

“It’s important not to make a mentor session too much of a debate. Remember that they’re volunteers and they’ve developed expertise in a specific area. As an entrepreneur, it’s best to take note of their advice and input, process it offline, and then decide what is right for your specific business.” 

  1. Keep your mentor in the loop, even if you’re no longer meeting. It’s so rewarding to hear the positive outcomes of the work you put in together. Even a quick email letting your mentor know that you implemented their advice and it led to results, will make their day!

Should I pay for a mentor? 

While searching for mentors, you may find some who charge for their time. While some people may view that as a valuable investment, it’s not always feasible for founders on a lean budget. In my opinion, don’t pay for a mentor. There are plenty of qualified professionals who are willing to support founders for free out of their own desire to give back to the community, or who want to get/stay involved in the startup world. 

Regardless of whether you pay for a mentor or not, the value is in the support and time savings they can provide you. Make sure to keep tabs on whether you work well together, if you’re making progress on your goals, and that you’re being true to yourself in the process. These will be telling signs that you’re on the right track. 

StartUpNV always has free programs and free mentors, so start with us if you need a boost! Whether you choose a self paced program like IncubateNV, a year-long program such as FounderNV, or an IncubateVegas bootcamp, we will ensure that you have access to mentors that fit your needs to get you on your path to success. Visit our programs page to get started: https://startupnv.org/startups/services/ 

 

Are you interested in being a mentor for StartUpNV? We are primarily in need of mentors for ideation and early stage startups. This may look like: 

  • Leading small groups of founders through a bootcamp 
  • Throwing a hands-on workshop in your area of expertise 
  • Being available for founders to reach out on our incubator platform 

If any of that sounds interesting, please submit a mentorship interest form today! https://startupnv.org/become-a-mentor/

About the author, Audrey Randazzo: 

Mentor Audrey Randazzo startup las vegas 2

Audrey Randazzo earned her Bachelor’s degree in Anthropology with a minor in Art from the University of Nevada, Reno in May 2021. While in school, she had internships at the American Chemical Society for Community Management, the Nevada Small Business Development Center for Marketing, and held a long term position at the UNR Career Center where she utilized her unique blend of analytical thinking and creative problem-solving skills.

Over the past three years, Audrey has made significant contributions to StartupNV, where she started as an intern and quickly progressed to the role of Program Manager. In her current position as Mentor Manager, Audrey plays a pivotal role in the growth and success of the accelerator programs by sourcing experienced Mentors with skills across the board. She works closely with a diverse network of professionals, guiding and facilitating their engagement with aspiring entrepreneurs.

In addition to her work with the Accelerator Mentor Program, Audrey actively contributes to the development and enhancement of other vital programs within StartupNV. She has played a key role in shaping the vision and execution of Founder University Nevada, IncubateNV, and IncubateVegas. With strategic insights and collaborative approach, Audrey ensures these programs provide valuable resources, mentorship, and support to startup founders at various stages of their journey.

Outside of her professional pursuits, Audrey enjoys rock climbing, traveling, and visiting every coffee shop in Reno. She dislikes spending over $8 for an oat milk latte, but still supports the local ecosystem.

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how to become an angel investor

How To Succeed or Fail at Startup Investing

how to become an angel investor

How to be a Successful Startup Angel Investor

The best approaches to being a successful startup angel investor might not always be the most obvious ones, in fact it often starts with the ground rules and guidelines of angel investing. 

Over a 10 year period, successful pre-seed and seed stage angel investors make 3x to 5x on their cohort of investments which is about double the return of index fund public company investing. The rewards are the highest of all investment types, as are the risks, but the risks are manageable. 

There are 3 approaches to be a successful early stage investor – and one sure way to fail. 

Top 3 successful startup angel investing approaches 

  1. Passive investment through a trusted fund or syndicate

If you’re thinking that following the ground rules (noted below) is a ton of work, you’re right. Which is why the #1 approach is to invest in a fund or with a syndicate. In a fund or syndicate, the general partner(s) curate the deal flow, do the hard diligence work, and create “win-win” investable deals that can return the fund 3 to 5 times – or more. Funds consistently invest in 20-40 company cohorts over a 3 year period to mitigate risk and maximize returns. Syndicate investing on a deal by deal basis saves investors work, but on its own, does not mitigate risk across a large cohort in the same way a fund will. Many investors invest in a fund as a baseline and for deal flow, then add capital via syndicates to specific deals to spread risk and/or invest deeper in specific deals where they have more conviction.. 

  1. Active investment through an angel group

If you like the activity of finding companies, listening to pitches, asking questions, and engaging in the diligence process, an angel group may be more appealing. Angel groups share the workload among members, usually divided into committees like the selection, deal flow, due diligence, membership, etc. Some larger groups have paid interns and/or administrators to conduct the research required for screening companies and due diligence. Most angel groups have 2 or 3 options for members to invest in companies that apply to the group a.) direct investment, b.) group fund investment, and/or c.) through deal by deal special purpose vehicles (SPVs). It’s harder to follow all of the ground rules in an angel group, but most are covered – and members must maintain their own discipline around cohort size and investment time horizon. Still, angel groups have a good track record and have a social and networking component that the other approaches can lack. 

  1. Active “DIY” angel investment with self curated deal flow

If you’re the type of person who doesn’t like to rely on or trust others, then the DIY method is for you. It can prove difficult for a single angel investor to see enough deals to invest solely using this approach. Many fund and angel group investors use this method as a supplemental investing activity, bringing a few extra deals into their personal cohort each year – and spreading their risk. 

In addition, there are some best practices for successful early stage angel investing. 

Startup Angel Investing Best Practices and Ground Rules 

  1. Investment Thesis

Develop a thesis for investment size, opportunity types, and follow-on scenarios 

Successful investors are disciplined in the types of companies in which they invest, how much they invest in each company, and whether or not they will invest more than once in the same company. Your budget for investing will drive the amounts, with many angels investing between 2% and 10% of their net worth. As investors get older, investment percentages in this riskier asset class moves toward the lower end of the spectrum. With a large win, it can result in a “high class problem” of being over allocated. 

  1. Cohort size, Time horizon, and Valuation

Plan to invest in at least 20 companies; 30+ reduces risk and increases returns. The time horizon to deploy funds for a 20+ investment cohort should be 32 to 40 months. Each investment must be able to return at least 30:1, preferably 50:1 or better 

The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby tells us that 1 to 3 companies in a fund or cohort of 20-30 companies will make most, if not all of the returns. Even with the best diligence, research and picking, 75% of the cohort will likely fail. Due to the high failure percentage, to make at least a 3x return on the cohort / fund it’s critical to have enough companies and to be sure each one can return at least 30x (including anticipated dilution). 

Let’s look at a typical cohort where 25% of the companies return money to the fund, with a 75% failure rate. For this simple example, our fund size is $1M, making 20 investments of $50k each. 

  • 3x Average Fund / Cohort #1: One company returns 50x, another returns 5x and two more return 3x each, the other companies fail. This fund returns $3M or 3x. 
  • 4x Very Good Fund / Cohort #2: One company returns 50x, another returns 30x and two more return 3x each, the rest go dark, the entire fund returns $4.3M or 4.3x
  • 5x Great Fund / Cohort #3: One company returns 75x, another returns 25x and two more return 1x each, the rest go dark, the entire fund returns $5.1M or 5x 

These examples illustrate why it’s critical that every company can make at least a 30x return. If investors compromise on this metric, it’s very hard to make returns commensurate with the risk. Some investors believe they can beat the Power Law – that they have a superior ability to “pick winners”. Proceed with eyes wide open, understand Power Law math – and you’ll do well. 

  1. Larger Numbers – Better Chances

See 100 companies for every investment made, 250+ is better. 

To get good at picking startups and founders, you need to see a lot of them. It’s just like any other skill – repetition and experience makes investors better. Successful funds and angel investor groups regularly see 100+ deals for each one in which they invest, often the ratio is upwards of 250:1. Joining with a group or fund that attracts high quality founders in large numbers will ensure better investing results. It’s not fun saying “no” so much, but it’s a critical skill to making the fund / cohort return 3x or more. 

Some very large early stage funds and accelerators take the large numbers rules to the extreme. Studies from Right Side Capital Management, 500 Startups, Y Combinator and others show that studious investors who follow the rules have a 75% chance of a 3x return when the cohort size is between 20 and 75 companies. As the cohort size increases, chances of a 3x return increase to 90%+ at a 500 company cohort size and closes in on 100% as the cohort size approaches 2000 companies. The more quality shots investors have on goal, the better. 

  1. Due Diligence, Valuation, and Deal Memos

Develop a due diligence method, be vigilant about it, and independently verify:

  • Founder backgrounds, qualifications, and expertise 
  • Market size: TAM/SAM claims + realism of SOM 
  • All claimed IP 
  • Competition 
  • Traction and customer contracts – talk with customers 
  • Exit multiples for industry 
  • Sensibility of market capture w/r/t exit valuation requirement 

Very few enjoy this critical piece of the investment process. Be sure you, your angel group, and/or your fund / syndicate have access to the research tools to do the job right. The Angel Capital Association recommends at least 40 hours of diligence work for each investment made. Many investments will be partially researched – until a problem is uncovered – then the deal is called off, which increases the average diligence time per closed investment to closer to 80 hours. When the investment is fully researched, diligence is complete, and conviction is reached to make an investment, it should be documented with a deal memo summarizing the research, diligence, and noting the reasons for and risks of the investment. Deal memos become a critical learning tool as the investments make the desired returns – or when they fail. 

Each piece of research is important, but one that is often overlooked is the valuation research. What is the entry price of the investment? How much of the company will the investment purchase? How much dilution will occur as future rounds are raised? What does the exit point have to be (including dilution) for the investment to generate a 50x return? What level of sales does the company have to reach to justify that exit price? What percentage of the market (SAM) does the company have to acquire to hit that sales number? Is it reasonable for any company in the market to own that required percentage of the market (SAM)? Can the founders execute at the level required over the time period to reach that market percentage? 

  1. Putting it all together

Write a deal memo for each investment made to document the details above. 

You can make a great return and have a ton of fun investing in startups. There are few activities that stimulate the brain, the imagination, provide social engagement, and very high returns like startup angel investing. The risk is high, but the rewards are much higher than Private Equity (PE), Hedge Funds, Real Estate, and public stocks – when investments are made correctly. Investing in a fund or with an angel group will not require as much work as DIY, but it’s important to know and understand what is required – even if you don’t DIY. 

Angel and Startup Investing Resources and Opportunities 

StartUpNV provides several options for startup and angel investors. 

  1. AngelNV – team up and learn with other angels. Some but not all of the work is done for you – and you’ll meet dozens of other like minded people investing in an annual conference fund, risking as little as $5k. Find out more at AngelNV.com 
  2. FundNV – a $2M pre-seed fund where investors can participate in hearing company pitches, asking questions, and providing feedback to the general partners. Investors don’t have to source deal flow, conduct due diligence, etc. Fund management makes the decisions and manages the $100k per company investments on behalf of its members (aka “limited partners” or LPs) 
  3. Sierra Angels – a traditional membership angel group investing directly and via SPVs 4. 1864 – a $10M see fund similar in structure as FundNV, except making larger investments in more mature companies 
  4. 1864 – a $10M see fund similar in structure as FundNV, except making larger investments in more mature companies
  5. StartUpNV Syndicate – investors in any StartUpNV based fund (and their invited friends) participate in “side car” investments and one-off deals that may not be a fit for the fund or angel group thesis.

About the author, Jeff Saling: 

Owner Jeff Saling start up nv 1

Jeff co-founded StartUpNV (2017), a non-profit state-wide startup accelerator and incubator; FundNV (2020), a pre-seed venture fund; AngelNV (2021), an annual conference seed fund that educates investors; and the 1864 Fund (2023), a seed venture fund.  Since inception, StartUpNV has engaged 1000+ companies, runs 80+ events per year, and has worked with 40 Nevada companies raising $77M+.  He is co-President of the Sierra Angels (2023), one of the nation’s longest operating angel investing groups. Jeff is a founding member and Vice Chair on the NV Governor’s Council on Startups and Venture Capital (2022), worked with NV Lt. Gov Kate Marshall to introduce and pass SB9 (Blue Sky Laws) in the 81st NV Legislature (2021), worked in the 82nd Legislature (2023) with Assembly Speaker Steve Yeager and Cisco Aguilar, Nevada’s Secretary of State to introduce and pass AB75 (Nevada Certified Investor). Since 2018, Jeff teaches ENGR-461 (High Tech Entrepreneurship) during fall semesters in the College of Engineering at the University of Nevada, Reno.  Jeff was a SaaS startup founder and executive with 4 successful exits by IPO and acquisition between 1992 and 2016. Jeff’s private company professional experience includes leading worldwide sales, SaaS operations, and product development.

 

How To Succeed or Fail at Startup Investing Read More »

customer discovery

Customer Discovery: Job One for A Successful Startup

Customer Discovery: Job-One for a Successful Startup

 

customer discovery

There are two paths to a startup. The first is to get an idea, develop a product, produce a product and then try to sell it.  The second is to get an idea, test the market appetite, create a prototype, test the market reaction, revise, and test until you are ready to produce.

I probably don’t need to tell you that the second path is typically more successful. The better you understand your customer, their needs, and their appetite for your product, the more likely you will be to build a product people will buy. This is the path of customer discovery.

If the second path is typically more successful, why do founders choose the first path so often?  There are several reasons. One reason is that founders assume that because they saw a need for the solution, others will buy it.  It’s the “if you build it, they will come” model.  Unfortunately, just because you want it, or think it is a good business idea, doesn’t mean that other people will spend money on it.

 

Product-Market Fit

Before you get too far along your startup journey, I encourage you to think about what we call product-market fit. Product-market fit is when there is a need and an appetite for a solution to a problem. It also means that your solution fills the need and is priced so that people will buy it. Solving a problem isn’t enough. You have to make sure there is a product-market fit.  We do that through customer discovery.

The customer discovery process starts by understanding who has the problem you are trying to solve, how important it is, and how much they are willing to spend to solve it. If you get an answer that indicates the problem is troublesome enough that they are willing to invest to solve it, you can test your solution model with the potential customer.

You begin this customer discovery process by defining the target market you believe will want your product, developing a series of questions to understand the customer’s interest, analyzing the data, and then revising and retesting if necessary. If you believe there is more than one target market for your product, then you may need to run this customer discovery process more than one time.

 

4 Part Customer Discovery Process:

  • Define a Target Market
  • Customer Validation: Understanding the:
  • Problem
  • Urgency
  • Appetite (Budget)
  • Testing your solution
  • Analyzing the Data
  • Revision & Retesting

 

Define the Target Market

If you have an idea for a product, the next step is to think about who might use it.  Don’t make the mistake of thinking “anyone” or “everyone” can use it.  While that may be true, it is more helpful to think about who is most likely to have the problem you are solving and be willing to invest resources into solving it.  Who do you think will be easiest to sell this to?  Then, stop and think if there are other groups that might also be able to use it.  Make a list of the groups of buyers. Many founders would be surprised how often companies have changed their target market when they realize that a different buyer is willing to pay more or buy it more often.

Depending on what you sell, your target customers could be moms of teenagers, accountants, or quality control specialists in labs. For example, if you’re a founder selling testing equipment, you may think that the equipment would most often be used by labs in water treatment facilities. You might discover that other labs test for similar things that could use the same equipment. Those other types of labs might be another target market.

If you are selling business-to-business (B2B), you might want to consider all the people who might be involved in buying or using the product you are selling. You may want to interview more than one type of buyer during your customer discovery.

 

Customer Validation

Customer Validation is the process of studying the potential buyer.  There are many ways to do this. You can set up a study and have people participate, you can send out a survey, or you can do interviews.  There are probably other ways to do this as well.  With a new product, especially for a new founder, doing interviews is a great starting place because people will tell you things you didn’t think to ask.

Before you interview or survey potential customers, develop your customer discovery questions. Here is a link to some sample questions on customer discovery.  It is important to think through the questions and test them on people before you start your interviews. You want to ensure you are asking what you mean to ask and that the questions are easy to understand and answer. You also want to ensure you are not leading them to answer in a specific way. You want honest answers.

Start by understanding the problem. (I use ‘problem’, but it could be something they want to achieve or avoid). You are assuming that people have a certain problem. First, you need to confirm that they have that problem.  Next, you will want to understand how that impacts them.  How much of a problem is it? Many problems don’t seem worth fixing. Other problems create other problems when you fix them.  You need to understand all of this. The problem has to be bothersome enough that they are willing to suffer through the solution.

Next, understand how urgent a solution is. Is this priority 1 or 56?  Do other things need to get solved before this, or in order to solve this?  What is the timeline around those things? If I want a new carpet but don’t want to get it until I fix the leak in the roof and the water damage on the ceiling, the new carpet may have to wait a few weeks or months. Timing is everything. 

Once you understand the timing, ask how much they will pay. Remember that the price of your product may only be part of the cost for them. If I buy makeup, I may also have to buy brushes. If I buy a new car, I must also get new insurance and register the car.  So you need to understand how much they will pay for your solution plus how much else they are willing to invest.

Finally, test your solution with them. You may want to bring a prototype for them to test. Do they like your solution?  What do they like or not like about your solution? Does seeing your solution change their urgency or how much they are willing to pay? 

Be as consistent as you can in asking the questions. It will be hard to analyze the data if you don’t follow the same process every time.  Give yourself a place to track answers not specifically asked in the questionnaire.

 

Analyze the Data

Compiling and understanding the data of your customer discovery is important.  You can get a feel for what people say, but formally analyzing it will give you better information.  If you do interviews, you can still put the answers into a program like Survey Monkey so they can analyze the data for you. Sometimes once you get the answers, you will begin to see trends. You might notice if people answered one question a certain way, they were more likely to answer a second question a specific way. You can see many trends in the data if you look for them. 

 

Revision and Retesting

The whole point of this customer discovery process is to learn. If you are lucky, you will get through this survey, and everyone will say they love the idea and the product and they are willing to pay what you want them to pay. More likely, as you do these interviews, surveys, or tests, you will learn things that will make you rethink your product or solution. You can do a handful of customer discovery surveys and make urgent changes before you go on. Or you may get through the whole survey process and analyze the data before deciding what changes to make.  However you do it, the vital thing to remember is that you are doing this to learn how to produce a product people will pay for. Remember, until people buy your product for a profitable price, you have a hobby, not a business. Your job is to develop a successful business. That means you need a product that solves a problem that people want to solve badly enough to pay for.

Product development tends to be an iterative process. In other words, you get an idea, you research the fit, make revisions, test again and keep revising and testing until you get it right.  

 

How to Find Your Test Sample

Decide how many people you want to interview before you start. It is essential to have a big enough sample size to analyze. Talking to ten people, for example, isn’t enough to make a good business decision. I recommend talking to at least 100 people if you can swing it. You might want to do ten as phase one, then revise before you do the rest.

If possible, start with people you know well. That will give you a comfortable environment to test your survey before you try it on strangers. 

Next, go to what we call 2nd level connections. Those are friends of friends or connections of connections on LinkedIn.  Ask for introductions from people you know. If you have been introduced, people are much more likely to agree to the interview. Finally, you must reach out to strangers if you run out of people you know.  You could use LinkedIn for this or make cold calls. Let them know you are developing a product and would like to interview them to get their feedback. Let them know how long the interview will take. If you want to, you can offer a Starbucks gift card or something like that as a thank you.

 

Proceed, Pivot or Punt

You must decide at several points along the way if you will “proceed, pivot, or punt.”   You may make minor changes as you research, but keep moving forward with your business as planned. You may decide to pivot, meaning you will make significant changes in your product or target market. Finally, you may discover the company isn’t going to work. Maybe people don’t need to fix the problem, or there are better solutions out there, or perhaps people won’t pay enough to make the business profitable. Whatever the reason, sometimes deciding to give up is the right thing.

At various points in your startup journey, the decision to ‘proceed, pivot, or punt’ becomes crucial. Seeking advice and insights from experienced mentors, such as those affiliated with StartupNV, can offer a fresh perspective and guide you in making informed choices for the future of your business.

Even once you have a product on the market, you will likely update, upgrade or change it over time.  Some products, like Coca-Cola, always stay the same, while others, like iPhones, change yearly. 

 

Fastest Path to the Finish-line

For many founders, preparing the product for sale seems like the most direct path to success. It may be direct, but there is a huge risk of getting to the finish line without a buyer. Potential customers can be fickle and hard to understand, so customer discovery may seem like taking the long way around. There may be more twists and turns in the process, but the end result should be a product ready for a market that is willing to pay.  

By Liz Heiman, CEO at Regarding Sales and StartupNV Mentor

About the Author

Liz has been helping companies with enterprise (B2B complex sales) since 1998. She started her career at Miller Heiman training companies like HP, Coca-Cola, NCR and Johnson Controls. Now she works with startups and companies in transition to build sales operating systems to support sales and growth goals. Liz will work with any company who has a B2B complex sales, but is focused on manufacturing, med tech and other tech.

 

 

Customer Discovery Questions List by StartUpNV

 

  1. Have you experienced this situation?
  2. Is it a problem for you?
  3. Where and when do you experience this problem?
  4. How are you currently dealing with the situation?
  5.  How often do you experience the problem?
  6. How interested are you in an easier solution, on a scale of 1 to 10?
  7. How many others that you know experience the problem?
  8. How long should you have to wait for the solution to work?https://startupnv.org/customer-discovery-job-one-for-a-successful-startup/
  9. How much time are you willing to invest in learning the solution?
  10. Are you willing to pay for a better solution?
  11. How much are you willing to pay?
  12. If it is a one time solution, how often are you willing to pay for it?

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Top 10 Venture Capital Books for your Next Business Venture

Top 10 Venture Capital Books for Your Next Venture 

Raising capital can be daunting, but there are foundational guides available to help founders navigate the process. We’ve collected a list of resources that draw from top experts and authors that can help you understand and master the world of venture capital and be successful in your next raise.

From beginner books to traditional guidebooks, venture into the world of startups and investments with these top 10 venture capital books for your next business venture!

Venture Capital Strategy: How to Think Like a Venture Capitalist

 

Author: Patrick Vernon

In Venture Capital Strategy, Patrick Vernon focuses on the frameworks that go into the decision-making process between founders and venture capitalists. 

Vernon gives practical tips on how to mitigate investment risks and alleviate the uncertainties of investing in startups. Entrepreneurs are encouraged to focus on long-term perspectives when planning and building their startups. A practical and sustainable business model is a driving force behind great investment deals, which is why Vernon draws from other disciplines such as finance and economics. 

Introducing the basics of finance and economics in a venture capital guidebook can provide a more holistic understanding of economic growth and what drives long-term value creation for investors. This is a unique aspect of Venture Capital Strategy where investors can learn how to identify sustainable startups with great potential for economic growth. For better investment decisions and an overall understanding of the framework of venture capital, readers can get a good grasp of how to think like a venture capitalist. 

Breakfast With Pops: A Venture Capital Handbook 

 

Author: Adam Draper, William H. Draper 

Perfectly titled, this book is the conversation you’d have over (an extremely long) breakfast if your pops or mentor was a seasoned Venture Capitalist. If you like your reads less dry, you’ll enjoy this buttered-up book with the tone of two friends chatting.

Breakfast with Pops derives from the authors’ personal experiences and sets a conversational tone when explaining the basics of venture capital. Its engaging style of language helps readers understand complex concepts, made more entertaining by including humor and relatable language. Breakfast with Pops provides a broader but well-rounded approach, and benefits both founders and venture capitalists by going into the venture capital process from start to finish.

Adam and William Draper also highlight the importance of building great founder-investor relationships. Trust, integrity, and transparency are vital qualities between founders and investors. Entrepreneurs can learn how investors operate and make decisions so that they can better position themselves for success.  From structuring deals to portfolio management, founders are able to learn about venture capital in an approachable way. The candid language used in Breakfast with Pops is also great for beginners who are just starting in the venture capital industry as founders or investors. It is for eager learners who seek a basic understanding of the venture capital world and the relationship between founders and investors. 

Founder VS Investor: The Honest Truth About Venture Capital from Startup to IPO (Audiobook) 

 

Author: Elizabeth Zalman, Jerry Neumann 

The founder-investor relationship is the primary topic of Founder VS Investor. This audiobook by Zalman and Neuman sheds light on the challenges and tensions that founders and investors may face when developing a relationship. It gives practical advice on negotiating term sheets, managing investor relations, and resolving conflict. Listeners are able to gather valuable insights on how to build strong founder-investor relationships and, most importantly, how to negotiate deals that will benefit both parties. Zalman and Neuman stress the importance of harmony and understanding between founders and investors by analyzing the features of a successful founder-investor dynamic. 

Zalman and Neuman include various interviews with experts, thought leaders, and industry insiders, providing well-rounded insights from all perspectives of the venture capital world. These experts help listeners gain a broader understanding of the systems in venture capital and what makes these systems work. These insights are what makes Founder Vs Investor unique to its listeners.

Zero to One: Notes on Startups, or How to Build the Future Hardcover 

 

Author: Peter Thiel 

Beyond the bank; a book that is worth a read for all aspects of building a startup, including fundraising.

Zero to One introduces conventional ways of learning about entrepreneurship and innovation by catering to founders who seek to build groundbreaking businesses that go from zero to hero. Thiel has been quoted as saying, “We wanted flying cars. Instead, we got 140 characters” In this book, he explores how we got here and how we are capable of building the future we want. The book explores the foundations of a successful and innovative startup. It also serves as a guide for product development, where founders can learn how their product can stand out and resonate with their target audience. Peter Thiel emphasizes the importance of identifying products that offer significant value and solve real-life problems. 

Thiel encourages his readers to build a sustainable business that has potential to change the future.  Zero to One also targets VCs that want to identify promising investment opportunities. Thiel puts due diligence at the forefront when offering advice for venture capitalists. From identifying a startup’s growth potential, risk management, and maximizing returns while minimizing downside risks, Zero to One not only offers strategic guidance for founders and venture capitalists but it also analyzes the trends and dynamics of the venture capital world. 

In Search of Thursday: Diary of an Undergraduate at the University of Venture Capital 

 

Author: Paul Traynor 

If you prefer to “walk a mile” (or 278 pages) in the shoes of someone else’s journey as they discover the world of venture capital, this book is for you.

In Search of Thursday is written from the perspective of an undergraduate student who is newly exploring the world of venture capital. The author makes this book unique to readers because it offers an amateur perspective on the subject compared to traditional “expert” books. Paul Traynor chose to write about venture capital in a diary format and draws from personal experiences and reflections as he navigates the venture capital industry. The reader experiences the author’s journey through successes, failures, and the reality of going into venture capital.

 Although Traynor offers a more informal approach to understanding venture capital, he also covers key terms, concepts, and practices making this book a valuable source for beginners and students. While the entertainment value is certainly present in In Search of Thursday, it is full of practical advice from deal sourcing and due diligence to understanding the venture capital world overall. 

Super Founders: What Data Reveals About Million Dollar Startups 

 

Author: Ali Tamaseb

This book scientifically debunks the myth that you need a “perfectly matched 2 person team” – a techie and a business person – to have your best chance at a unicorn.  There is no significant difference in the rate of success if there are 2 “balanced” founders or 3 technical founders, or a single business founder.  If you can get over your emotional reaction and follow the numbers – your aperture will be blown wide open.

Super Founders is a data driven guide on how to have a successful startup and identifies the common features that the most successful startups have. Tamaseb uses a quantitative approach to analyze the main predictors of successful high-growth startups.  Super Founders also emphasizes what it truly takes to build a million-dollar startup. Smart founders will take inspiration from his conclusions and strive to focus on the key metrics revealed by his data. 

Although the topics and advice are centered around founders, venture capitalists can also benefit from the book. With the data-driven analysis, venture capitalists can better assess which startups will likely have successful outcomes, generating  better returns. By prioritizing empirical evidence in decision-making, venture capitalists and founders increase their chances of building and investing in successful startups. 

Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms

 

Author: Jeffrey Bussgang

Learn both sides of the chessboard with this book.

Jeffrey Bussgang offers a unique take on venture capital and building a successful startup by having experience as both an entrepreneur and a venture capitalist himself. This book does a deep dive into the relationship and dynamic between investors and founders and what a successful business venture looks like. Mastering the VC Game includes real-life experiences as well as case studies to give its readers relevant and actionable advice when understanding the stages of a startup journey. Bussgang also sheds light on the importance of practical skills such as networking, pitching, and building credibility with potential investors. 

Mastering the VC Game is also useful when identifying the weaknesses of a startup. How can founders overcome common obstacles? How can they navigate the inevitable ups and downs of building a successful startup? Investors can use this knowledge to build better investment strategies that attract the most returns. Bussgang gives deep insight into not only the successes, but the challenges of being on both sides of the table.

   The Power Law: Venture Capital and the Making of the New Future

 

Author: Sebastian Mallaby

Moonshots and Moon landings: case studies and key insights into successful startups and what sets them apart.

The Power Law is unique in its historical perspective of the venture capital world by describing trends and developments that have influenced the industry to what it is today. It also takes on a global perspective when it comes to understanding innovation and economic development, including the differences and history in China, India, and Europe, where venture capital also has a prominent role in the business world. 

Sebastian Mallaby includes case studies as a key aspect when analyzing successful startups and venture capital firms. By drawing from real-world examples, The Power Law helps its readers connect with and digest the lessons and advice it gives. Mallaby takes inspiration from iconic companies like Google and Facebook and legendary investors like Sequoia Capital and Kleiner Perkins to tell success stories. The Power Law explores a much broader spectrum of venture capital making this book beneficial for understanding the startup world as a whole. 

“The entire VC industry works from the Power Law principle — just a few of your cohort of investment will make nearly all of your returns. This has HUGE implications for how and how many startup investments you should make. Ignore this “law” at your own peril — but better to read about and understand it.” -Jeff Saling, StartUpNV 

Secrets of Sand Hill Road: Venture Capital and How to Get it

 

Author: Scott Kupor 

Capital Culture: A book that emphasizes the ecosystem and history behind venture capital: A critical read for anyone seeking to understand how it all began and where it’s going.

In Secrets of Sand Hill Road, Scott Kupor draws from his personal expertise as an experienced venture capitalist. While strongly emphasizing the entrepreneurial perspective, Secrets of Sand Hill Road highlights the experiences, challenges, and successes of raising venture capital. The book provides an inside look at the venture capital ecosystem by covering a wide range of topics, including the most prominent venture capital firms, fundraising strategies, valuation methods, and portfolio management. 

Kupor paints a vivid yet informative picture of the ins and outs of the relationship between venture capitalists and startup founders. The language used in Secrets of Sand Hill Road is comprehensive and straightforward for readers with varying knowledge of venture capital. Readers are able to gain a deeper understanding of the motivation and concerns behind the venture capital industry. 

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist (4th Edition)

 

Author: Brad Feld, Jason Mendelson 

Often referred to as the “Holy Grail” of VC books, Venture Deals can serve as a friendly go-to handbook for founders on all things VC.

Venture Deals is an incredibly detailed and educational book from both the founder’s and the  venture capitalist’s perspective. Feld and Mendelson offer the ultimate guide to understanding raising capital and navigating the legalese and motivations of the fundraising process. From preparing for fundraising to closing the deal, founders will learn the best ways to pitch to investors and negotiate deals. Venture Deals also explores concepts of valuation and dilution which is especially useful for founders in early-stage startups. Founders can learn what factors influence the valuation and the strategies that might be helpful when negotiating a valuation that aligns with their business goals. 

Attracting investments is essential to the growth and success of startups so it is important for founders to understand the criteria investors use to evaluate in which startups they will invest. Feld and Mendelson offer a guide on how to navigate and build a strong relationship with potential investors. By including perspectives from venture capitalists, the book ensures that both parties benefit from the investment deals. Venture capitalists can gain a deeper understanding of the trends that are constantly developing in the industry in order to adapt and stay competitive. With the combination of insights from both founders and venture capitalists, Venture Deals is a valuable resource to the venture capital and startup world.

“Don’t make your second investment until you read and understand the material in this book.  You can be forgiven for making a first investment without it, but not a second, third, or more.” – Jeff Saling, StartUpNV 

Conclusion

For founders and investors that need an extra hand in understanding the ins and outs of the venture capital industry, this list is curated to offer perspectives new and old from various points of view. 

Founders and entrepreneurs can gain insight to the minds of investors and break the barrier of knowledge. This can enable them to create better business models and build successful and sustainable startups. Venture capitalists can also identify potential in startups and choose which ones can yield the best returns. 

The approaches of investors to venture capital are limitless but the resources are not, so it’s essential to choose the right venture capital books to help with your next great business venture. 

For additional resources, check out StartUpNV’s Youtube channel and stay updated on our most recent posts and events on our Linkedin page. Find our Founders Reading list here. 

Written By: Ericka Estacio, Staff Writer 

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Understanding funding rounds

A Deep Dive Into Startup Funding Rounds

A Deep Dive Into Startup Funding Rounds

The world of startups is dynamic and ever-changing, and securing startup funding is often a crucial step towards success regardless of the industry. Critical phases of startup financing— Pre-Seed, Seed, Series A, Series B, and Series C, etc.—each represent a significant milestone in a company’s growth, but these stages are more than just capital acquisition. They’re about strategic growth, market validation, and the ability to scale operations.

Understanding the intricacies of these funding rounds offers invaluable insights for entrepreneurs that aim to navigate the challenging-yet-rewarding path of building a successful startup.

Read on to gain insights into the objectives, challenges, and strategies that define each startup funding stage.

Understanding Startup Funding Rounds

Fistbump in front of "start" sign.

Startups evolve through various stages of growth backed by effective business financial planning. Each stage is marked by a distinct funding round. These funding rounds are not just about securing capital, they’re about strategic partnerships, market validation, and business evolution.

From angel investors, accelerators, and friends and family in the early stages, to venture capitalists and private equity in the later stages, the nature of funding reflects the startup’s growth trajectory and market readiness.

Factors such as the amount of capital raised in a particular fundraising round, the nomenclature of which “series” or round you are raising, the types of investors involved, and the business milestones you’ve achieved in order to raise such a round can vary depending on a number of factors. This is especially true between the stages of Pre-Seed and Seed.

In general, pre-seed and seed funding are the earliest money that a company will raise. The amount of money raised can range from $50 thousand to $5 million. This money can be used to build the business and scale the core team, further develop the product, validate the market, increase traction and revenue, and prepare to show Series A investors that they’ve demonstrated product market fit and that their business is equipped to scale (with investment, of course).

The three most common funding rounds you’ll encounter when fundraising to scale the startup are Series A, Series B, and Series C funding. Here’s how each differs in terms of challenges and how you can strategize during each to come out the other end successful and further funded.

Series A Funding: Laying the Foundation for Scaling

Series A funding follows seed funding and marks a turning point where startups shift from developing your product to scaling your operations. This critical stage is about proving the business model and laying the groundwork for sustained growth.

Objectives of Series A startup funding: The focus here is on market fit and scalability. Startups need to show they can not only attract customers but also retain them and grow your base.

Typical investors and investment size: Investments range from $3 million to $25 million, and these investments primarily come from venture capitalists looking for companies with a strong team and a scalable business model.

Challenges of Series A startup funding include:

  • Validating the business model
  • Scaling the team structure
  • Managing rapid growth and spending
  • Building brand and customer loyalty
  • Aligning with investor expectations
  • Shifting focus to sales and marketing

Effective funding tactics include:

  • Establishing financial controls
  • Developing a diverse leadership team
  • Focusing on market differentiators
  • Crafting scalable marketing strategies
  • Engaging with investors for guidance
  • Utilizing data for product decisions

Success in Series A funding sets the stage for exponential growth and also serves as a validation of the startup’s market potential.

Series B Funding: Accelerating Growth

Series B startup funding is where the startup’s vision moves beyond the validation stage of Series A funding and into the growth stage

Objectives of Series B startup funding: This stage is characterized by efforts to dominate the market. Expansion of product lines and geographical reach become a priority.

Key investors and expected investment amounts: Series B can see funding from $20 million to $50 million and attract larger venture capital firms and even strategic investors.

Challenges of Series B startup funding include:  

  • Balancing quality with scaling
  • Diversifying products or services
  • Attracting and retaining talent
  • Managing brand value in new markets
  • Optimizing supply chains
  • Maintaining innovation and profitability

Effective funding tactics include:

  • Optimizing operations and processes
  • Researching for market expansion
  • Implementing talent programs
  • Investing in marketing and brand building
  • Strengthening governance frameworks
  • Promoting a culture of innovation

Achieving success in Series B funding is a testament to the startup’s resilience and its ability to not just grow but thrive in a competitive landscape.

Series C Funding: Preparing for the Future

At the Series C funding stage, startups are typically looking toward scaling to new heights and possibly eyeing public market entry or making significant acquisitions.

Objectives of Series C startup funding: The focus is on scaling the business to an international level, diversifying product offerings, and exploring new markets.

Investor profile and investment scale: Investment amounts can range from $30 million to $90 million or more. Series C funding attracts a diverse range of investors including private equity, hedge funds, and even corporate investors.

Challenges of Series C funding include:

  • Adapting to global markets
  • Managing diverse investor expectations
  • Innovating amidst competition
  • Balancing new revenue streams
  • Preparing for exit (IPOs/acquisitions)
  • Handling public and media scrutiny

Effective funding tactics include:

  • Developing international strategies
  • Maintaining stakeholder communication
  • Investing in R&D and industry trends
  • Exploring strategic partnerships
  • Preparing for IPO with expert advice
  • Establishing a strong PR plan

Series C funding is an indicator of the startup’s maturity and its readiness to play on a global stage.

Final Thoughts on Startup Funding Success

Navigating through startup funding rounds requires a blend of strategic vision, operational excellence, and market insight. Each stage—from Pre-Seed to Series A and beyond—brings its own set of challenges and opportunities, and each stage shapes the startup’s journey toward success.

It’s the founder’s job to understand these nuances, because funding is essential for any entrepreneur looking to steer his or her venture through the turbulent-yet-satisfying waters of startup growth.

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