At MergeLane, we (and most of the startup investors I know) subscribe to the philosophy that startup success is determined by team, team, team, market and idea, in that order. We look for incredibly tenacious founders with a track record of making the seemingly impossible possible, a deep passion bordering on obsession for solving the problem their business is solving, and a huge opportunity cost for pursuing their startup.
I sometimes find that incredibly tenacious founders want to move as quickly as possible to get an investor’s check in their hand. This typically causes frustration on both sides of the table. Before we consider companies for investment, we like to invite them to step back and look at the things that are really going to make or break a company’s ability to raise capital and, more importantly, build a successful company.
Idea: Is your business solving a big enough problem? Does your market actually view this as a problem? Is your market willing to pay to solve this problem? Is the vision of how your company will solve this problem the best way to solve the problem? Can you make your vision bigger?
Market: How big is your market? How much of this market cares enough about this problem to become a user or paying customer? This is a great resource for calculating your total addressable market (TAM).
Team: Are you the right team to execute on your vision? I’d suggest answering these questions specifically:
3) Have your assumptions about your team members changed? Do you need to rethink your roles as team members?
4) What are the critical holes in your team? How will you fill them? Can you leverage mentors, etc. to fill those holes for the next 18 months?
Passion: As you think about these questions, don’t lose sight of the fact that the most successful founders typically build startups to solve problems about which they are deeply and personally passionate.
After you answer these questions, think about whether raising capital from angel investors is actually the right strategy. To answer this question and more, I’d suggest:
1. Reading this post about the types of companies angel and venture investors typically fund
2. Listening to the following in order of priority:
Elizabeth Yin, co-founder and general partner at the Hustle Fund, shared her thoughts on how to assess a startup’s ability to “hustle”. Her thoughts are applicable to venture capitalists, startups and anyone who wants to work with hustlers.
Nearly every email I receive starts with “Sorry for the delay.” Our always-on culture has set an unwritten expectation that an email should be responded to within 24 hours. To prevent the perpetuation of this cultural expectation, I would like to make my thoughts clear.
We asked our Fund81 forum for venture capitalists to nominate portfolio companies to participate in a startup showcase. We received over 50 nominations. Four of those startups are featured in this episode.
Jocelyn Goldfein from Zetta Venture Partners joined the Fund81 podcast to share her approach to investing in artificial intelligence (AI). With the cost of creating software continuing to decline, Zetta believes the companies of the future will need to build more than just great software to thrive.
I love being active, but I also have high professional aspirations. I’ve spent the last 16 years trying to find a productive balance between the two. In this episode, Nicole DeBoom, pro triathlete turned CEO of Skirt Sports, and I share our thoughts on how to fit fitness into a startup schedule.
Fundraising doesn’t come naturally to David Cohen, founder and co-CEO of Techstars, but he’s learned how to leverage his strengths and team to successfully raise the funds that power the Techstars network. In this episode, he shares his honest and authentic reflections from this experience.
I practice the principles of Conscious Leadership, a methodology and toolkit that accelerates self-awareness. It’s being taught at companies like Yahoo, Goldman Sachs and Ebay and has forever changed every aspect of my life. I estimate that it has bought me about five hours of extra time each day.
In this Fund81 podcast episode, I invited Brad Feld, founding partner of Foundry Group, to share his thoughts on maintaining mental health in the fast-paced venture capital world and supporting portfolio companies, colleagues, friends and family wrestling with mental health issues.
SC Moatti joined the Fund81 podcast to talk about how to discover and vet products in venture capital. We talk about how VCs can spot indications of future product success, creative ways to look under the hood before investing, and the product-related questions most venture capitalists fail to ask.