angel investment

Failure among startups is disappointingly pretty common. According to Forbes, 9 out of 10 startups fail, which is a hard and bleak truth that an entrepreneur and investor must think upon. A lot of factors are responsible for a startup to not work and almost every other startup faces these issues. So, what can be done to overcome these things? Well, a lot of analyzing, reworking and planning is required.  

Gary Yamamura, a serial investor and entrepreneur with 20+ years of consulting experience shared his views on why startups fail and what can be done to overcome the challenges.  Let’s start discussing this in detail: 

Startup failure rate: 

 As mentioned earlier, 90% of startups fail in the first 5 years of their establishment. Out of these 90, around 10% are out of business in the first year itself, whereas the remaining 80% lose the battle between their 2nd and 5th year. Statistics like such are not meant to discourage entrepreneurs and investors but to encourage them to work smarter.  

Top reasons for startup failure: 

Product Market Fit: “A product that no one wants is bound to fail.” According to Fortune, 34% of startups fail to understand the needs of the market and create a product that is not needed. With companies like Uber and Lyft, commuting became easy, whereas Amazon changed how e-commerce works. Hence, it is crucial to understand if the product will actually help the people or not. 

Marketing: Despite the growth of digital marketing, a lot of startups keep it aside when it comes to their growth strategy. Even if they are doing marketing, it is not focused and lacks a marketing plan. No matter how great your product is, it is vital to leverage referrals, leads, and advertising. People will not know about your product if they aren’t aware that you exist and this is why marketing is vital for every startup.  

Team: Around 18% of startups claim that they failed because of a bad team. So, it can be rightly said that a team can make or break a startup. People management and running a team require a lot of continuous effort. A smooth and successful management requires proper understanding of team, leadership skills, and communication. Good ideas need execution and that’s where the team comes in. If the ideas are not communicated properly, then the team is bound to fail.  

Money: Finally, another important area where startups fall flat is running out of money. Cash flow is crucial for any company. A lot of startups begin with small amounts of money and as they grow, they need proper cost management. It’s easy to forget how much time it takes to pay back your initial expenses, let alone turn a profit. When it comes to cost management, it is also vital to have support when things are not going right.  

When you look at all the above-mentioned factors, everything leads back to a root cause and that is: Management.  Businesses are run through decisions made by the management/leadership team, but if they are not competent, then eventually problems like money, product strategy, and marketing are affected. Now the question arises - how to know if a startups management team is bad: 

Lack of experience: Things like leadership skills, client relations, basic business tactics and team management skills are four most basic and important things to have. If your management team lacks any of these, then the road to success can be a tough one. A lot of first-time entrepreneurs lack these skills, and it can affect their abilities to communicate.  

Lack of planning: It is often seen that companies with clear mission and vision find it easier to explain things to their team as well as customers. Not only this, the management team must also know clear answers to questions like what product or service will you provide? Is it adding value? What are your objectives, and how will you attain them? Having a clear plan and roadmap provides a better chance of success. 

Now that we have discussed the reasons for failure, let’s take a look at what can be done to avoid them: 

1. Proper documentation: This may sound cliche but having everything such as your plans, vision, financial forecast and mission documented can help sort a lot of issues. It helps in providing a clear path for your team to follow and also providing a reference. 
2. Spend like it's your money: Finance is a crucial aspect for running a business smoothly. Knowing the expenses, managing them and using them correctly are crucial. This can only be achieved if the team understands the value and outcome of investing each penny.  
3. Be honest: A pretty obvious thing a leader needs to follow is being honest. If you are honest, then you can discuss the issues with the team without any resistance and make better decisions.  
4. When things fail, take a step back: Often times moving forward is the only thing that’s on the mind of an entrepreneur. But when things are not going right, it is important to take a step back and assess if you are going in the right direction.  
5. Think, replan and pivot: At every stage of your startup journey, it is vital to look at things you are doing. If they need restructuring or replanning, then it must be carefully thought and executed.  

About the speaker:

Gary is a versatile senior advisor with superior communication skills and extensive knowledge and experience in developing, introducing, and ongoing management of advanced technology products and related services. He also has hands-on experience in program management, project management, operations management, training, and process streamlining through automation and re-engineering. 

Company expands manufacturing of HaptX Gloves DK2 to meet strong customer demand

REDMOND, WA,  – HaptX, the leading provider of realistic haptic technology, today announced a Series A-1 financing round of $12 million along with new headquarters in the Seattle area. HaptX also announced a second manufacturing run of HaptX Gloves DK2, the world’s most advanced haptic feedback gloves, after selling out the first run in less than six months.

“The COVID-19 pandemic accelerated enterprise adoption of virtual reality and telerobotics. Companies are increasingly recognizing the value of true-contact haptics for training, design, and robotics applications,” said Jake Rubin, Founder and CEO of HaptX. “With fresh capital and a new state-of-the-art headquarters, we’re well positioned to scale our workforce to meet this growing demand.”

HaptX’s $12 million in growth financing brings the company’s total funding to $31 million. The round includes participation from existing investors Verizon Ventures, Mason Avenue Investments, Taylor Frigon Capital Partners, and Upheaval Investments.

“HaptX’s advanced technologies make virtual reality a more fully immersive and realistic experience while addressing real-world enterprise needs,” said Michelle McCarthy, a Managing Director of Verizon Ventures. “Verizon’s 5G and MEC are instrumental in enabling wireless VR for multiple applications – especially in a quickly evolving workforce. We look forward to supporting the team’s vision and technology.”

The company’s new Redmond, WA headquarters features 15,000 square feet of office and warehouse space. HaptX has also expanded its San Luis Obispo office footprint by 50%. Over the next 12 months, HaptX will add dozens of new positions across all areas of the company.

“We can’t wait to bring HaptX customers to the hardware showroom in our new headquarters,” said Joe Michaels, Chief Revenue Officer of HaptX. “Customers will soon be able to experience current and next-generation HaptX products and meet the talented people who make them.

HaptX has open positions available in mechanical engineering, software development, sales, and operations across its Seattle and San Luis Obispo offices. Learn more about HaptX Gloves DK2 and career opportunities with HaptX at haptx.com.

About HaptX 

HaptX builds technology that simulates touch sensation with unprecedented realism. HaptX Gloves enable natural interaction and true-contact haptics in virtual reality and robotics for the first time. A venture-backed startup, HaptX is headquartered in Redmond, WA, with offices in San Luis Obispo and San Francisco, CA. Visit us at www.haptx.com

Read The Article: https://haptx.com/growth-funding-redmond-hq/

If you are someone who is new to angel investing, then making decisions to invest can be daunting. Things become much more formidable when you are trying to understand your financial objectives and risks involved.  

Bill Powell, long time investor and member of our Northwest & Rockies forum, joined us at our 2021 Investor Capital Expo to share his experience and insights as an angel investor. With this keynote, he shared how new investors can manage their investments better, cut losses, and become better at making investing decisions.  

Let’s go over the lessons shared by Bill to make yourselves a better investor: 

# Lesson 1: Evaluating Relationships with Fellow Angels & Entrepreneurs  

Always seek the right people and ideas -  

If you are a new investor, joining angel groups, improving your network, talking to investors, and attending entrepreneurial pitching events are crucial. However, always ensure that you are not completely influenced by others to make investment decisions. You must evaluate deals based on the team's core strength and value of product/service. People will definitely play a role in the process of angel investing by influencing your decision-making, but you need to distinguish between people and ideas - where they fit and where they don't. 

Solving the 'Problem-Founder Fit’ Conundrum -   

You need to ask yourself - what problem is the company trying to solve? Is the leadership group right to solve the problem? Such questions provide your clarity on investment. Always remember CEOs are the ones who have the ability to identify gaps in the market and figure out ways to market product/service effectively. It’s also vital to perform thorough due diligence to understand the company’s finance, prospects, product, and salability.  

# Lesson 2 - Importance of Network & Community 

Full Spectrum Ecosystem -  

Becoming a member of Keiretsu Forum provides the opportunity to interact with a global network of investors. As someone who is new to investing, networking with seasoned investors can provide a lot of learning. Other than this, participating in due diligence, deal screenings, and interacting with company founders can provide the much-needed practical learning rather than theoretical knowledge. With Keiretsu Mindshare Forum, you also get the chance to work confidentially with other investors to review your portfolio.  

Commitment to Research, Development, Innovation & Commercialization - 

Whenever you are joining an angel investment network, you need to see if they are committed to research, development, and innovation. As mentioned earlier, a thorough due diligence can help you understand every aspect of the company. Secondly, it is essential to be part of a community that values ​​commercialization. A commercialization model is a process of bringing new products or services to market. Always look for a detailed plan related to commercialization in a presenting company’s pitch deck.   

Focus on big problems, not just products - 

A lot of the time, companies are focused on making changes to the existing product despite it being liked by the end user. This is also vital but not all the time. If the company is dedicating time to solving problems that are not relevant to the end user, then it is just wasting time.  

The products you need to focus on are:  

1) Trying to solve a valid problem  

2) Has good market value  

When choosing a company, it is necessary to identify the problems and invest in companies that can solve potentially significant problems that are prevalent today or will be in the future.  

Lesson number 3 – Predicting the Future and Timing the Market Is Futile  

Predicting Intersections -  

Bill states that intersections in predictive technology are not easy! If you don’t have adequate knowledge of a particular field, then it is best to top investors and talent in related fields. This will not only provide you the knowledge of the field but also predict changes and growth within the industry.  

It is Impossible to Time Markets -  

Having the right market timing is not only challenging but almost impossible. According to Bill, some companies are ahead of time which makes it difficult for their connection with the customer base.  

The pandemic has accelerated growth for some companies because they were already leading the way, and the masses could catch up due to the rapid demand for digitization. These companies experienced 48 months of development time compressed to 12 months. 

Lesson number 4 – Structure and Follow-on   

As an investor, you must have a diverse portfolio. You need to be structured when building your portfolio in different sectors. Once you decide to invest in a company, be vigilant at every step - the due diligence process, every board or shareholder meeting and while conversing with the core team.  

By following a rigorous investment process, you can make optimal allocations and understand when you should move to your next seed round. As you become more experienced in investing, strive to be part of every seed round, learn from every loss and keep growing your portfolio, after all you never know which one might turn into a unicorn. Nothing beats experience!   

Lesson number 5 – Have Conviction, Purpose & Time 

Always understand your role in every investment, whether it's an active, semi-active, or passive role. When you decide what role you'd like to play after you've invested in the company, you should also ask the entrepreneur for their input. Founders must state their expectations from you rather than simply taking the cheque.   

It doesn't matter when you join the company - pre-seed, seed, or later rounds, your commitment to the company in the future funding rounds doesn't change. If you can't add value to the business other than writing checks, re-consider investing in that business. So choose your position wisely.  

About the speaker:   

Bill Powell is an experienced investor and entrepreneur focused on early-stage startups. He is a Managing Director at Black Lab X based in Boulder, Colorado. BLX is a venture ecosystem dedicated to entrepreneurs addressing problems around “the human” using first principles thinking. Investment themes include vitality, consciousness, community, and the environment. Before joining BLX, he was a Managing Director with Stadia Ventures, a global sports tech accelerator & early-stage venture fund, where he remains on the board. Previously, he was Director of International Private Equity at AMG National Trust Bank with responsibility for the management of international private equity and renewable energy funds. Prior to that, he was active in several technology startups in Stockholm, Sweden. You can watch his keynote here.   

Also ranked on the Global Stage as the ‘2nd Most Active early and late stage investors’

SAN FRANCISCO, CA—April 13, 2021, Setting a standard for most active investors three years running, Keiretsu Forum, the world’s largest angel investor network, today announced Pitchbook has released its 2020 Annual Global League Tables highlighting Keiretsu Forum as the U.S. Region’s #1 and # 2 Most Active Late and Early Stage investors.

Impressively on the Global Stage, Keiretsu Forum was ranked the # 2 Most Active, Early, and Late Stage investors. Keiretsu Capital, the exclusive worldwide fund partner of Keiretsu Forum, continues to be a top-tier funder of late-stage investment deals in the network.

Keiretsu Forum is known by investors and entrepreneurs alike for its proven approach for originating quality deal flow and success syndicating early and late-stage investment opportunities around the world.

2020 was a banner year for Keiretsu Forum, with the organization achieving a record 314 fundings (including follow-on fundings) into seed, early-stage and late-stage companies in 2020. Deal activity increased approximately 16% compared to 2019, with Life Science, Medical Devices, Environmentally and Sensitive/Aware, and solution-driven Technologies attracting the most capital.

In 2020 Keiretsu also expanded its international footprint, now with 50+ chapters on four continents.

About Keiretsu Forum

Keiretsu Forum is a global investment community of accredited private equity angel investors, venture capitalists and corporate/institutional investors. Keiretsu Forum was founded in 2000 by Randy Williams. Keiretsu Forum today is a worldwide network of capital, resources and deal flow with 50+ chapters on four continents. Keiretsu Forum members invest in high-quality, diverse investment opportunities. To date it has invested over $900 million in 2000+ companies. The community is strengthened through its involvement in social and charitable activities.###