Venture

Investment in people is as important as an investment in cash

Can you do the Tough Things First?

  • Are you ready to build an enduring company?
  • Do you believe profitability is more important than rapid growth?
  • Do you find value in all people and nurture that value?
  • Do you want to be mentored as part of your overall venture investment?
  • Have you read Tough Things First?

Then we want to hear your business plan and investment proposal.

Ray Zinn, founder of Micrel and the longest serving CEO in Silicon Valley is now investing in technology startups, primarily in the hardware and semiconductor spaces. If you have read Tough Things First, believe in the worth of enduring companies, and want guidance by a Silicon Valley legend, then we are ready to see your pitch.

To apply, fill out the form below and attach your investment pitch deck (abbreviated business plan, financial projections, and funding requirements).

Venture Candidate Checklist

Why We Might Invest in You

We invest in people as much as we invest in companies.

Too often bright, technically inclined people fail at business because they are not as prepared to lead as they are to innovate. When we invest in a company, we become active mentors to you. Specifically, we mentor founders on:

  • Leadership
  • Management
  • Business planning

If you want mentoring or funding from the longest serving CEO in Silicon Valley, we are your preferred investor.

What Investments We Prefer

We are interested in:

  • Disruptive or groundbreaking tech (know the difference before applying)
  • B2B products
  • Hardware more than software or Internet (though we won’t pass up great soft products)
  • Semiconductor startups (these get our attention fast)
  • Founders who want to build enduring companies

We are not interested in:

  • Incremental product improvements
  • Consumer products and services (e.g., grocery delivery)
  • Advertising monetized content
  • Founders who are not building enduring companies

What You Should Know and Do Before Applying

The single best thing you can do to secure mentoring and funding from us is to read Tough Things First. Knowing the management philosophy of Ray Zinn is key to understanding what kind of founders, leaders and mindsets must accompany innovative products.

Next, honestly ask yourself if this is the right product for Tough Things First Ventures. You may have a great idea, but if isn’t in the realms where our mentorship can guide you to success, then going further would be wasting time.

Lastly, use the following checklist to ensure your proposal covers all the right topics. If we like your product, but you have an incomplete proposal, we may decline for lack of time and to focus on other opportunities.

The Criteria We Use to Evaluate Your Proposal

MISSION AND SOLUTION: Is your mission for solving market problems understandable, valid and innovative? Prove it and show the math.

FUNDING ROUND: We prefer seed and Series A investments, though Series B would be considered if previous dilution is small.

OUTSTANDING SHARES: Foremost, we want to invest in enduring companies where the CEO retains control. If your previous rounds, executive team and employee share trust are too generous, or your planned follow-up rounds dilute your control, we will likely pass.

MANAGEMENT TEAM: Have a real and ready management team, experienced in your industry, market and product line. Show us:

a) Who leads the basic functions of sales, marketing, operations, admin, finance.
b) What is their depth of experience with this industry.
c) That founders have a financial stake in their own company.

VALID MARKET SIZE ESTIMATES: Some proposals have purely fictional financials, and we can spot them instantly. Make sure that your market size estimates are rational, backed by reasonable analysis and substantiated by two or more sources. This includes all CAGR projections. The same applies to:

  • MARKET SIZE vs. SATURATION: Have a good handle on if the market has any buyers.
  • MARKET SIZE vs. COMPETITION: Be honest in your assessment of all competitors, including home-gown tech and customers simply doing nothing.

VIABLE GO-TO-MARKET STRATEGY: Do you have a well-considered and viable go-to-market strategy? Document:

a) How your value chain is difficult to disrupt.
b) How your sales channels and teams (both internal or external) are the right ones.
c) Why there are no significant barriers to entry for you.

FUNDING USE: Clearly and completely explain how venture funds will be allocated and why this spending is appropriate for next phase growth. We will look to see how precise and frugal you are.

RATIONAL PRICING STRATEGY VIS-Á-VIS COMPETITORS: Show how your products are priced, and why this is rational compared to competitors and market expectations; and justify any premium you charge.

RATIONAL FINANCIAL PROJECTIONS: Your projections cannot be based on wishful thinking. From the ground up, show how your current sales success paired with your go-to-market plan and staffing will change your top-line revenues, and how your spend management changes the bottom line.

TRACTION AND BOOKED SALES: Early signs of success are the best endorsements. Tell us clearly how many customers you have, what your profit margins are, and what your pipeline looks like.

INTELLECTUAL PROPERTY: IP isn’t always essential, but it can be a deal breaker in some industries and sectors. Disclose any critical IP and how it is protected.

DISRUPTIVE, GROUNDBREAKING and MARKET EDUCATION: We are not interested in incremental product. If your product is disruptive, explain why the new paradigm in an existing market is important to customers, and prove the demand. If your product is groundbreaking, explain how you are going to educate the market on why this is important, highly desirable and simple enough for customers to understand.

PRODUCT READINESS: Demonstrate that it is fully market-ready, from your supply chain to your technical support.

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