Welcome to another intriguing episode of Venture Declassified. Today, we delved into the captivating world of starting a distillery, as entrepreneur Mike Kelly shared his in-depth plans and strategies for establishing a distillery business in Indianapolis.

The conversation unfolded as Mike discussed the intricacies of the go-to-market strategy, the role of a key partner, and the initial focus on commodity alcohol production. Alongside Jacob and Ben, the discussion explored the financial aspects, capital raising strategies, and the dynamics of engaging potential investors in a non-traditional venture like a distillery business.

The dialogue revealed thought-provoking insights into the complexities of aligning investor expectations, managing risk, and carving a niche in the spirits market. Join us as we unravel the fascinating world of distillery entrepreneurship and investment strategies in this engaging and informative episode.

Key Topics

• Business Strategy and Funding for a Distillery Venture
• Focus on producing spirits with a good price point and positive cash flow without heavy branding investment
• Structuring of the funding round, including potential valuations and investor participation preferences
• Discussion of potential minimum investment amounts and the impact on investor relationships
• Strategies for creating a sense of exclusivity and leveraging FOMO in investment opportunities
• Comparison with traditional investment vehicles and risk vs. reward analysis
• Potential timeline for profitability and distribution of dividends

Connect
Mike Kelly
LinkedIn - Website - Developer Town

Ben Pidgeon
LinkedIn - VisionTech

Jacob Schpok
LinkedIn - Elevate Ventures

Hear more interviews and stories like this one at www.VentureDeclassified.com

The information provided on the show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the businesses or topics presented. Those opinions should not be considered professional investment advice. If they start up pitched as a part of this episode, it is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell, subscribe for or buy any securities.

In today's episode, we're diving into the complex world of startup fundraising as companies transition from pre-seed to seed stages. Our co-host experts, Jacob Schpok and Ben Pidgeon, join me in deciphering the intricacies of setting valuations, focusing on the nuances of revenue pro forma and the leap into Series A capital raising.

Jacob Schpok kicks off the discussion with insights into aligning your company’s valuation with public SaaS multiples for a strong Series A entry, targeting a 6.5x on ARR. We explore the pressure that startups face in converting customers to solidify this valuation and highlight the distinct challenges hard tech companies encounter compared to their software counterparts.

Ben Pidgeon tackles the subject of investor dilution, shining a light on potential pitfalls of convertible notes versus safes, and why terms are vitally negotiable. We bring in a real-world scenario—one that scrutinizes a startup's substantial dilution, analyzing its effects on founder incentive and growth trajectory.

We also dive into personal experience with fundraising for a pre-product, pre-revenue Nashville-based startup, dissecting their strategy and needs for capital to prove product-market fit. And let's not skip the debate over safes and convertible notes, as we raise concerns over legal and financial risks, preference for convertible notes for their risk and downside protection, and the ensuing tax implications.

Our conversation extends to boards and investors' roles in such decisions, the challenges of valuing a company pre-revenue and pre-product, and the importance of proper valuation caps. With the landscape as complicated as it is intriguing, Ben and the team advocate for setting clear expectations on valuation to pave the way for successful funding rounds.

Join us in unpacking these topics, as we seek to provide founders and investors alike with deeper insights into the world of venture capital, negotiation, and valuation.

Key Topics

• Transitioning from pre-seed to seed stage with strategic capital raising goals.
• Emphasis on the significance of converting users to paying customers for valuation increases
• Perspectives on valuation caps' effects on investment returns
• The strategy and financial needs for a startup entering the market.
• Strategies for prioritizing growth to attract institutional funding.
• Debates around valuation caps in early stages of business development.
• Factors affecting investor decisions, including competitive landscape and past experiences.
• The need for agreement between investors and founders on valuations.

Connect

Mike Kelly
LinkedIn - Website - Developer Town

Ben Pidgeon
LinkedIn - VisionTech

Jacob Schpok
LinkedIn - Elevate Ventures

Hear more interviews and stories like this one at www.VentureDeclassified.com

The information provided on the show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the businesses or topics presented. Those opinions should not be considered professional investment advice. If they start up pitched as a part of this episode, it is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell, subscribe for or buy any securities.

Welcome back to "Venture Declassified," the podcast that takes you behind the scenes of venture capital and private equity. Today we're diving deep into the ever-evolving world of venture capital and the fascinating yet perilous terrain of life science investing.

We'll dissect whether venture capital always aims for a "home run" or if it can be content with "singles or doubles," as Jacob suggests, might be more in the wheelhouse of private equity. We'll also evaluate the asset class's shifting landscape, becoming more conservative amidst a rocky journey.

Our discussion takes a critical turn as we tackle the complexities of life science deals. Why does it take more than money to succeed in this area? What role do intellectual curiosity and honesty play in the pattern matching necessary for investment success? Life sciences are a focal point today, not just because they've been the most lucrative for us, but due to the sheer excitement that palpable, tangible progress—like the potential to cure cancer—brings to the table.

We analyze Carta's recent faux pas—opening secondary investments without proper communication—sparking a debate on the ethical considerations in our industry and Carta's significance despite this mishap. We delve into our own experiences with portfolio management, the tools we trust, and the importance of extracting meaningful data to spot trends and monitor growth.

As we venture on this episode's journey, we don't forget to look through the "windshield" to anticipate what disruptive events might mean for industries like life science and SaaS, even as we understand the need to glance in the "rearview mirror" at times. So buckle up, as we navigate the challenging but potentially rewarding world of life science venture capital.

Key Topics

• Definition and purpose of venture capital as a disruptive force
• Comparison with private equity for various investment outcomes
• Sector-specific investment challenges: need for curiosity, honesty, pattern recognition
• Portfolio successes and the tangible excitement of life science opportunities
• Analysis of Carta's missteps in opening secondary investments
• Use of software tools for portfolio management activities
• Emphasis on extracting valuable insights and tracking macro-level trends
• Specific challenges associated with early-stage life science companies
• Liquidity in Life Science Investments

Hear more interviews and stories like this one at www.VentureDeclassified.com

The information provided on the show is not intended to be investment advice and should not be relied upon as such. The investors on today’s episode are providing their opinions based on their own assessment of the businesses or topics presented. Those opinions should not be considered professional investment advice. If they start up pitched as a part of this episode, it is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell, subscribe for or buy any securities.