The Propel(x) Podcast
Discussions on investing and all things startups.
Disclaimer: Propel(x) is a funding platform, not a Broker-Dealer. Securities are offered through Hubble Investments, member FINRA/SIPC and an affiliate of Propel(x). Private investments are highly illiquid and risky and are not suitable for all investors. Past performance is not indicative of future results. You should speak with your financial advisor, accountant, and/or attorney when evaluating private offerings. Neither Propel(x) nor Hubble Investments makes any recommendations or provides advice about investments.
In this episode we begin to analyze the Internal Risks of a company – Technology, Regulatory and IP risks are covered in this episode. Join us as we define each of the risks, and discuss the key considerations for each.
In Episode 4 we had put out a framework for ‘How to Evaluate a Startup’. Episodes 6 and 7 discussed ‘How to Evaluate the Market’ and ‘How to Evaluate the Team’, respectively. In this episode, we continue the discussion on how to evaluate a startup. Today we discuss how to evaluate competition.
Highlights of this episode:
- Status quo, or how customers currently solve their problem, is always a competitor (often the main competitor)
- Good competitors improve one of three things for their customers:
- they are lower cost,
- they are higher performance or,
- they are more convenient.
- Talking to customers or industry experts is one of the best ways to learn about competition.
Join us as Swati discusses the process of investing with Gopi Rangan, an experienced investor in the insurance technology sector. We discuss the explosion of Micro VCs in recent times. Gopi also shares his process, how he sources companies, how he interacts with them, what characteristics he specifically looks for and he manages his portfolio post investment. As an early stage investor, Gopi seeks to understand how he can help the company grow and thrive.
Professional investors cite ‘team’ as the single most important criterion that influences the investment decision. Yet, there are no precise metrics that guide the evaluation of the team. The assessment is often fuzzy, vague, and based on how the investor ‘feels’ about the team. This episode presents three tips that early stage investors should keep in mind when evaluating team:
- Early stage investing is subject to behavioral bias. Be aware of your biases.
- Separate fact from opinion and focus on the facts when evaluating team.
- Ask questions to cross check facts. E.g., who is really on the payroll vs. an advisor at large.
In Episode 4 we presented a framework to Evaluate startups. Here is a link to the accompanying blog that details the framework visually. The framework lays out several criteria along which you may evaluate startups. Market size is one of those criteria.
In this Episode, Andy and Swati discuss how to understand the Market for a startup. Questions we discuss are: Why is an understanding of market potential relevant (and what is market potential anyway)? How should one estimate the market size? Does every startup really have to have a humungous market running into many billions of dollars? Join us as we discuss these topics and more, that surround the key elements of startup evaluation – Market Size.
Join us as we interview our guest – Kiki Tidwell – a prolific angel investor, philanthropist, and cleantech evangelist. Among her many activities, Kiki is also a Founding Member of the Tech Advisory Group for the Stanford Center for Human Rights and International Justice. More on Kiki here.
In this episode, we discuss how Kiki invests. Her process – starting from sourcing deal-flow, conducting diligence, evaluating the team and more. Kiki also shares her insights on success and failure and how to build a portfolio.
We must emphasize, as always, that investing in early stage, unproven startups, is a high risk activity. There is no exact science to evaluating these companies. These investments carry the risk of complete capital loss.
Startup investing is inherently different from investing in the public markets. There is no 10K or 10Q to review, no analyst commentary, no chatter on Seeking Alpha, there aren’t even discounted cash flows. How does one evaluate such a company?
We discuss in this episode a framework to evaluate startups. We identify eight factors that can be used to evaluate a company: 1) Market risk 2) Competition risk 3) Execution risk (call it team risk) 4) Technology Risk 5) Regulatory risk 6) Financing risk 7) IP risk 8) Exit potential.
Learn the process of investing from a seasoned investor – Dr. Ronjon Nag, Director of MIT Alumni Angel Investors of Northern California as well as the Founder and Managing Director of the R42 Group. Dr. Nag is a serial entrepreneur (having sold his companies to Blackberry and Motorola), an active and prolific angel investor, as well as a lecturer in Artificial Intelligence at Stanford University. His newest venture – the R42 Group invests in AI, Science and Biotech, 5G and FinTech (R42Group.com). This is a rare opportunity to learn directly from Dr. Nag. Join us as we discuss his process, what has made him successful as an investor, the pitfalls – the high points and the low points.
This episode discusses how you can get started in angel investing – how many companies should you plan to invest in, how many should you evaluate before you make an investment, where to find deal-flow, how to connect with early stage companies and more…
Considering angel investing? Here are some criteria to consider: 1. Are you permitted by regulations? 2. Will you have sufficient capital to build a diversified portfolio over 3-4 yrs? 3. Can you stomach the (high) risk?