Venture capital · Early Stage Company Development

So we just won TechStars Startup Weekend. Now what?

Brett Gardner

September 28th, 2016

I took my eCommerce/Bidding platform idea to TechStars Startup Weekend and ended up winning first place. We won everything from legal formation services, SEO package, Design package (branding), free hosting, and access to a co-working space.

Upon winning we were told, by staying in San Antonio to launch this company we HAVE funding. We met TONS of VC's as well as CEO's of excellent companies all throughout the state of Texas who came to see the event. They all had great things to say and are willing to help out where they can. As far as the judges of the event, we had zero negative feedback. The common feedback was that our pricing needed micro pivots because the pricing models we put into our slides were not high enough (even thought the model showed a profit margins being above 500M/yr)

What I am wondering is:
1. After formation has been completed and we have shown profit from our low-tech manual beta test (which will be started this Saturday and continue for the next 2 weeks) we will need to go for series A funding. How does this work?

Since we are such a large profit margin company, I don't wish to give away a huge amount of equity for such a low amount of money (5-10mil). This company has a parent umbrella corp due to the fact that the model applies to every industry (in which we plan on branching out to each) and will disrupt the market for each and every one.

Do we only take funding for the initial company? 
Will VC's want to get in on the parent corp instead? If so, that is worth SOOO much more than the single corp we won the     competition with.

I appreciate the fact I can come on here and ask real questions to real people. Any feedback on the matter would be greatly appreciated. 

PS. Those of who have heard me asking about my other company FoodRoll and our API, we also got offers this weekend for an acquisition!!!  

David Martin

September 28th, 2016

Bret,  one bit of advice I would give you here.  Screen the information you post in this forum with regard to current dealings.  I would erase your last post regarding your holding company.  Remember when you do begin talking to investors it will be a negotiation.  Don't have any thing in a public forum that could be used against your negotiation.

David Martin

September 28th, 2016

Bret I will connect via linked in.  I understand now that your parent company is funded.  I was thinking it was currently just being structured that way.  There is no doubt that any investor is going to want to know of the parties in play with a company they are investing in and will be part of the disclosure process.  A lot depends on the contracts and structure you have with your current investors.  

Brett Gardner

September 29th, 2016

10-4 thanks David

David Martin

September 28th, 2016

By the way, the food app from what I looked at a couple weeks ago seems great.  I think there are enough angel investors out there who you could find to invest in this.  I can think of several off the top of my head who are in that space.

Rob G

September 29th, 2016

I think David's advice is appropriate - even if this were a secure, members only forum, you never know who know's whom. Since Bret may well soon enter contract negotiations he would be wise to limit comments here that could affect those negotiations or come back to bite him later.  If you've ever been in a deposition or lawsuit you know why.  That certainly should not limit his participation in any other manner.    On a related note, FD likes to automatically post each comment to LinkedIn unless you uncheck the box... something i don't always remember to do.  If you post as "anonymous" and then later respond to a question you are no longer anonymous. 

David Martin

September 28th, 2016

Personally, I would not take investment in the parent company.  Don't give the VC's that option if this current company is what they are interested in.  If I am understanding correctly, they liked one product/app you presently have.  If that is what they like, let them invest in that.  Then utilize those profits for your larger company but maintain that ownership.  If you go in there and say "Hey this company you looked at and liked will be great, but for the same low price you can gain access to the umbrella company and have ownership in all our great companies."  I know you wouldn't do that :) but what do you see is the benefit of them investing in your umbrella company?  

Brett Gardner

September 29th, 2016

There are a large number of investors who are keeping eyes out for potential leads via these platforms. The membership fees are so small vs what reward you can gain by finding these companies in early stages. Its a no brainer for them to at least check up on hot topics.

If you have any questions or input about the topic Mawuli, I would love to hear your experience.

David Martin

September 29th, 2016

Mawuli, yes as Bret said they are public.  If you sign out and search your name with founder dating you will see your name.  There is nothing wrong with discussions. My point is merely not to discuss legal or business details for current or pending deals in a way that potentially exposes confidential information or impacts a deal in a way one might not want. Its not a guarantee that that would affect a deal.  But personally, I do the searches.  

 


As a forum, seeking advice is great.  I would never hold it against someone who is seeking education, and I don’t think most would either.  Perhaps the bigger issue for many of these posters that I see is a false sense of competence.  I have read posts from some "advisors" who have no business advising anyone on business.  You will find some speaking in absolutes based on their very narrow and limited experiences.  Or you read a lot of regurgitation of stats and book smarts only.  Sometimes in these forums, people like to go read a book on business and then pawn off the knowledge as their own.  Kind of like that great scene in Good Will Hunting in the Bar.  I've seen quite a bit of that from a few individuals in here.  I don't think the good veterans out there would ever downgrade one for seeking advice or seeking to learn.

 


But I have seen some discussions on here that are definitely confidential-One asked advice about suing his partner.  One individual stated he found out there was a patent on his product, and asked if he could just ignore it, which someone gave the foolish advise that he could.  Guaranteed if competition saw that post they would send to their lawyers for proof that someone was purposely and knowingly dismissing the law-a couple of examples. 

 


No one with a well rounded success would ever discourage further education of any kind be it college, forums, books, experience, I would just know who the audience is and could potentially be.

 

Mawuli Adzoe Full Stack Software Engineer at Goodshop

September 29th, 2016

This is not a public platform. It is a closed off space protected with login. We are all here to learn. Unboxing replies does not help others learn from his experience. And BTW, how exactly are the investors finding posts on FD? Google? I don't think this platform is that public. Or is it?




Brett Gardner

September 29th, 2016

It is a fully visible public platform, to participate I think you have to be a member. 
I had posted replies giving away too much information that could be a problem with investors in the future. I had to remove that information. I may have been mistaken saying "all replies", what I should have said is "all replies about details please message me directly". I would not want to limit general information from anyone, I agree this is to help others as well as grow ourselves.