Raising Capital for Early Stage Companies in a Post CoronaVirus Market Meltdown

Recent Market Sell-Offs and Volatility Have Investors on a Roller Coaster of a Ride

After ten years of rising US equities prices, many investors are selling (albeit off the highs) but with large capital gains. This sell-off gives investors a chance to rethink their allocation and potentially focus on private investments in earlier stage companies as a long-term hedge.

Anecdotally having met with hundreds investors over the past 24 months, smaller/private deals were more difficult in an era of seemingly predictable source of 8% plus returns in the public markets.

So what is the case for investing in technology at the earliest stage besides the fact that returns are the best and investors are seeking a long term game now? 

What is Your Investor(s) View of the World?

1. Understand the investor type and hypothesis and craft your pitch in response to their view of the world.A high net worth investor who is an angel, likely has public market exposure, capital gains and a fairly large amount of ongoing hypothesis.

Take the opportunity to remind your potential angel investors that this is a great time to move investment dollars out of the volatile public markets and into a business that is values-aligned and run by someone they know and trust.”

Angel investing has generated good returns over time for angels. The link below connects to a dense academic paper, however it is recommended that Early Stage Companies should be comfortable with this analysis so you can understand how your potential angels are thinking about this investment

Prediction and Control Under Uncertainty – Outcomes in Angel Investing

Assessing and Comparing Risk

2. Early stage pre-revenue tech startups become in relative terms less risky. At the early stage, risk doesn’t change much in absolute terms but changes dramatically in relative terms. If you at normal times evaluate a pre-seed startup risk to be, say, 100x higher than that of a later-stage company, at the time of crisis this could become only 20x. this of course assumes the crisis is bounded in time.

Finding and Leveraging Unique Advantages

3. Pre-revenue startups have zero exposure to market, and generally benefit from crises, because they can get cheaper workforce (this assumes employees will still want to join a company with financing risk).

If you expect the crisis will take x number of months, and the startup has >x runway, you know it will survive. There are almost no other variables except in the Coronavirus instance, we don’t know x number of months yet.

There’s always capital for companies that have the product market fit and a strong relationship with a diversified set of customers.

Companies should rework their financial models and capital strategy to ensure they can hold-off on deploying capital until they understand business drivers that enable them to become category-owning companies offering a defensible product or service.

If you are able to organize your company to qualify for opportunity zone funding, that could help your potential investor with the capital gains associated with their most recent public company stock sale. 

Source William Rosellini

10 books that inspired the world’s top start-up investors

They have backed many of the world’s most successful companies. But what do prominent venture capitalists like Marc Andreesen, Mary Meeker and Josh Kopelmann do when they’re not unearthing the next Facebook, Uber or Whatsapp?

For one thing, they read. And quite a lot, as the Visual Capitalist reports. 

This is based on recent analysis by blogger Joe Hovde of the popular 20 Minute VC podcast, which features interviews with leading venture capitalists (VCs), which cover which authors they favour the most.

And which books come out on top? Well, if you want to nurture the future entrepreneur and investor in you, read on. (If you’d prefer something interactive, check out this infographic of all the popular titles.)

Following the Leaders

Not surprisingly, the three most admired books to get a mention were written by fellow entrepreneurs and investors.

By a large margin, the most cited book was Ben Horowitz’s The Hard Thing About Hard Things. 

Horowitz runs Silicon Valley venture capitalist group Andreesen Horowitz, and has famously backed the likes of Airbnb, Twitter and Facebook. 
As a former entrepreneur, he recounts the trials, tribulations and lessons learned from building a start-up during the “dotcom bust”.

Peter Thiel’s Zero to One comes in second place. The book focuses on how future start-ups can find the “white space” to create innovative products in an increasingly saturated world. Thiel is another legendary Silicon Valley investor, though better known as the co-founder of PayPal.

Third in line is The Lean Start-Up. Here, Eric Ries develops a management methodology for start-ups based on the Japanese concept of “lean manufacturing”, applying its principles of waste-reduction to modern web-based businesses.


Have you read?

These are the business books to read in 2016

Launching a start-up is cheaper in these cities

Unicorns do exist. Find them in Europe


Old favourites last the distance

The list also features business evergreens such as Dale Carnegie’s How to Win Friends and Influence People and Good to Great by Jim Collins, alongside more theoretical works such as Nassim Taleb’s Antifragile and Fooled by Randomness, which focus on making the most of chance.

 What do the best entrepreneurs read?   

Image: Ramen Profitable

Inspired by upbeat messages

When it comes to fiction, Paulo Coelho’s bestseller The Alchemist tops the list. The novel’s central message, that all the universe can conspire to help you reach your goals, might well resonate among venture capitalists, many of whom started out as entrepreneurs.

The Master and Margarita, Mikhail Bulgakov’s satirical novel about a visit by the devil to Stalinist Russia, comes second. Close behind are Gabriel García Márquez’s 100 Years of Solitude and Ernest Hemingway’s The Old Man and the Sea.

It is easy to see why Hemingway’s themes of courage in the face of defeat and turning a loss into success would strike a chord with investors, who may have had a few similar experiences of their own.



From start-up to scale-up: what it takes to become a successful entrepreneur — World Economic Forum | Agenda



Ellen Olafsen of the World Bank on how to turn start-ups into successful firms.

via From start-up to scale-up: what it takes to become a successful entrepreneur — World Economic Forum | Agenda

What do you think of when you hear the term “entrepreneur”? What about “growth entrepreneur”? Do Elon Musk and Tesla come to mind? Travis Kalanick and Garrett Camp of Uber? Jack Ma of Alibaba?

Forget for a moment the immense scale that these few, highly successful tech giants have achieved. Such cases will always be outliers. Instead, imagine the potential collective impact of companies in developing countries growing from a $50,000 to a $1 million company, or from a $1 million to a $10 million company. Imagine how this could help generate dynamism in the local economy and ultimately increase competitiveness, incomes and jobs.


fourth-ir-051416-aaeaaqaaaaaaaatfaaaajgezy2e0nwvilwu4ogitndzkzi1hymzilta1yty1nzczngqznaAlso Read: Nanotechnology and the ‘Fourth Industrial Revolution’ ~ Solving the World’s Biggest Challenges with the ‘Smallest of Things’


** Please leave us your Comments, we appreciate your Input and Feedback! **

15 billion-dollar startups that didn’t exist 5 years ago

Sketching growth chart on blackboard

Every week this year, another startup has reached a billion-dollar valuation. (Whether these private market valuations actually hold water is another question.)

We’ve decided to rack up a bunch of these billion-dollar startups — Cowboy Ventures’ Aileen Lee first referred to them as “unicorns” — that didn’t exist five years ago, and that are now valued at $1 billion or more.

For the purposes of this list, we zeroed in on U.S.-based companies that were founded in 2011 or later (since we’re nearing the very end of 2015), and that are private tech companies.

Can you guess who is ranked Number 1 ?

We then ranked them from least to most valuable.

*** From Business Insider: Follow the Link Here:


A “Start-Up” Revolution

TEC Edmonton 041314-Logo-V2@2xTEC Edmonton helps U of Alberta  innovators turn tech ideas into commercial successes.

A university’s output of research and innovation can boost an entire region’s economy—but only if those inventive sparks can make the jump and catch fire in the business community. Since 2006, TEC Edmonton has helped that happen.

The transformation has been stunning. “In the 1990s, the University of Alberta had no defined strategy for encouraging spinoff creation,” says Chris Lumb, CEO of TEC Edmonton. “Today, it’s a North American leader in this area.”

More like a world leader. In 2014, Sweden’s University Business Incubator Index ranked TEC Edmonton as the world’s10th best university business incubator. Closer to home, the Startup Canada Awards named it “Incubator of the Year.” TEC Edmonton currently works with approximately 125 active clients. Those clients have generated $310 million in revenue since 2011, and they now employ over 1,800 people in and around Edmonton.

The organization is a non-profit joint venture between the university and Edmonton’s Economic Development Corporation, was built off of the earlier success of the U of A’s technology transfer office, created in the mid-1990s to help U of A innovators take their ideas to the marketplace. U of A Vice-President (Research) Lorne Babiuk observes, “We were one of the first North American universities to recognize the role that institutions like ours can play in regional economic development through successful commercialization of university research.” The partnership with EEDC leveraged that existing expertise and opened it up to the wider community. Now, anyone in Edmonton with a promising tech-related idea can approach EEDC for support. During its short history, TEC Edmonton has become our region’s hottest accelerator for early-stage technology companies, including many spinoffs from the university.

Many of TEC Edmonton’s U of A-related successes have already made waves. A biomarker for breast cancer, discovered by researcher and professor Ing Swie Goping could lead to a diagnostic test to help doctors personalize drug therapies for individual patients. TEC Edmonton also helped U of A researcher Richard Fedorak launch Metabolomic Technologies, which has already developed urine diagnostic tests for colon cancer (and is working to develop tests for other conditions). Results from clinical trials suggest the tests could save money—and lives.

Although Lumb gratefully accepts the national and international accolades, he insists that the real credit belongs to TEC Edmonton’s clients. “It’s all about the companies we serve. The entrepreneurs, who put their resources and reputations on the line to launch and grow companies, are the reason we exist.”

Meanwhile, Babiuk sees TEC Edmonton’s current success as a mere hint of what lies ahead. “We have come a long way,” says Babiuk. “Together we will do so much more, strengthening the university’s reputation as a commercialization leader and Edmonton as a centre of technological innovation.”

5 Tips to Improve Your Startup Pitch

Start Up Pitch 1f121f3

By Eric Rice

Founder & CEO at TrepScore

Much like baseball, building a business starts with a pitch. Whether it’s explaining to your boss (or your family) why you’re quitting or convincing someone to join your team, you are pitching your business idea. Considering how important it is, I’m astounded at how many entrepreneurs neglect to craft and practice their startup pitch and do it poorly.

I have been crafting pitches for years, hundreds of them, and I’ve come to learn a few approaches that work very well.

Respect the formula:

Every pitch has very distinct parts to it. For investors, there are popular ten slide templates, which are great, but here are the three that matter: 1) the problem that you are solving; 2) your solution; and 3) the market that it relates to. And you need to really refine the market (no one likes hearing about 2 trillion dollar markets)

Keep your startup pitch simple:

This goes for all of your pitches but it is especially critical to state the problem and your solution as simply as possible. You frame the entire pitch, and the ensuing conversation, at that moment. If you get that point across and it resonates, you can fill all the details later. Trust me, there will be time. Albert Einstein said it best, “if you can’t explain it simply, you don’t know it well enough”

Convey your idea visually:

Remember the old cartoon with the cat and the mouse, Tom and Jerry? In each episode Tom (the cat) would construct a plan to capture and eat Jerry (the mouse). What does that have to do with pitching? Well, Tom was a master ideator but he could also create a one page blueprint that would clearly show what he was planning and how he was going to achieve his goal. Though he never got to eat Jerry, Tom certainly did catch him quite often. Tom showed his entire business plan on one sheet of paper and humans ranging from age 3 up got it in an instant.

Begin your startup pitch journey with this simple goal; try to illustrate your business in pictures. People understand and love images, use them to your advantage.

Let personality and passion show:

A pitch can convey to potential investors that you have a great idea that solves big problem in a big market. But after that is established, investors look for reasons to NOT do a deal, like evaluating the entrepreneur to see if he or she truly enjoys what they are doing. Make sure your pitch reflects your personality and passion, which mostly involves remembering why you started the business in the first place business. If you aren’t passionate about what you do, no one else will be either.

Take Batting Practice:

Never forget the power of practice. Just like a baseball player takes warm-up swings before a game, an entrepreneur should practice ways to pitch their idea every day. Grab a co-worker, a team member, a cab driver, a co-founder and give them the pitch as often as possible when you aren’t pitching in front of actual investors. You should also just pitch yourself, recording or filming some of your practice pitches. It will help more than you can imagine.

You must be able to convey your idea verbally, in writing, and even visually. Apply these 5 simple tips, improve your pitch, and become the Startup CEO or Co-Founder an investor wants to work with.