Startup Funding Espresso Bandwagon Effect
Bandwagon Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The bandwagon effect is a cognitive bias defined by as the tendency to do (or believe) things because many other people do (or believe) the same. Investors follow the lead of others. The more investors following a deal, the more investors are willing to join. Investors look for lead investors who will negotiate the terms and diligence it. To avoid the bandwagon effect in funding a startup, look for experienced investors to follow\xa0 Review carefully the diligence report to see if it matches your expectations. Verify stated information with other sources. Challenge the assumptions to understand the deal in more detail.\xa0 For example, if the startup indicates they have revenue, investigate further the quality of that revenue.\xa0\xa0 Is it recurring revenue?\xa0 Is it concentrated revenue? Avoid situations where the investors are excited about the deal but no one is actually leading the deal and no one is reviewing the diligence.\xa0 \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .