Startup Funding Espresso -- How the Startup Can Lead the Deal
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Startups can raise funding even without a lead investor. In this situation, the startup acts as the lead. Here are three steps to take: First, the startup must present investor-friendly terms and conditions. There should be no push back on the terms. Second, the startup must supply a due diligence package already completed. Consider adding a Reps and Warranties contract to the diligence report to show the startup stands behind it. A Reps and Warranties contract states that the founder stands behind the due diligence provided and there is nothing omitted. It is a legally binding contract. Third, standardize the investment amount, such as \u201ceach investment unit is $25K\u201d. Removing the various decision points - terms, investment amount, and diligence compiled - takes care of the lead investor\u2019s role. The drawback to this approach is that there is no one investor who \u201cowns\u201d the fundraise. The startup most likely won\u2019t get meaningful investor engagement after the check signing, and there will be little support from investors for helping raise the next round of funding.\xa0 If you don\u2019t need those things, then this method is a good way to raise your funding. 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: For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0 For Feedback please contact info@tencapital.group