Tech Square Ventures is a seed and early stage venture fund that invests in innovative technology startups in the Southeast. They look for startups that have the potential to transform their markets in areas like information technology and the Internet of Things. Blake Patton is the Managing Partner who has 20 years of experience investing in startups. When evaluating investments, Tech Square focuses on the team, market opportunity, and solution being offered. They conduct thorough diligence on factors such as the problem being solved, target customers, market size, competition, and path to distribution and revenue. The goal is to understand all aspects of the deal and identify risks to mitigate through the investment process.

1. MARKET DILIGENCE
Blake Patton
blake@techsquareventures.com
@blakepatton
www.techsquareventures.com

2. 2
ABOUT ME
Tech Square Ventures is a
seed and early stage
venture fund. We invest in
innovative technology
startups in the Southeast
that have the potential to
transform their markets
Information Technology
Internet Of Things
University Spin-outs
Technology entrepreneur
and investor with 20 years
of experience in startup,
venture backed, and
publicly traded internet,
software, payments, and
financial services
Seed & Early Stage Targeting Blake Patton
Managing Partner

3. “Never invest in a
business you
cannot
understand”

4. 4
Investment thesis fit
WHAT INVESTORS I LOOK FOR
At Seed & Early Stage I Am Betting Primarily On The Team, Market, & Timing
Can I help?
Scalable business
model with recurring
or transactional
revenue
DistributionProof or traction
MarketEntrepreneur & team Right Timing
Unfair advantage / IP

5. TECH SQUARE VENTURES APPROACH
We create a deal memo as a
living document covering all
aspects of the deal (team,
market, technology, IP,
distribution, financial, etc.) If we
proceed it becomes the basis
for our investment memo.
It contains a running list of all
the questions we wish we had
answers to - which guides our
diligence efforts.
The final section of our
investment memo includes our
investment thesis and lists key
risks (unanswered questions)
and mitigating factors.
5

6. VALUE
PROPOSITION
6
WHAT PROBLEM ARE THEY SOLVING?
PROBLEM
What problem are they solving?
Who has it?
What are the associated pains?
How are they solving it today?
What is the value proposition?
What are the solutions and
benefits?
What is the result for the
customer?

7. 7
TARGET CUSTOMER
Who has the pain they are solving?
Understand the profile of the target customer
and buyer.

8. TARGET CUSTOMER
ü Target & manage High Net Worth clients
ü Have a defined, mature service model
ü Have growth goals & strategy
ü Use disparate technology solutions
Registered independent or affiliated
investment advisors that:
8
$5 billion
$25 million
AUM
SERVICES

9. SIZING THE OPPORTUNITY
TOTAL AVAILABLE MARKET
How large is the overall market?
Eg. Wealth management market = $X
SERVED ADDRESSABLE MARKET
How large is the subset that needs the product? How much are
they spending?
Eg. Registered Independent Advisors = $Y
Who will they target in the first couple of years? How big is that
opportunity?
Eg. RIAs targeting high net worth clients = $Z
TARGET CUSTOMER MARKET
9
$X
$Y
$Z

10. MARKET DYNAMICS
- What are the drivers in the market?
- Is the addressable market of customers growing or
shrinking?
- What changes to how they do things today would
be required for the startup to succeed?
- Metrics that matter
- Are there regulatory factors?
10
Talk to trusted industry experts

11. INNOVATORS EARLY
ADOPTERS
EARLY
MAJORITY
LATE
MAJORITY
LAGGARDS
RIGHT TIME
- Are there changes happening that
make this market ripe for
disruptionin the near future?
- How could a startup disrupt the
market?
- What are the incumbents doing?

12. 12
“If you don’t have
a competitive
advantage, don’t
compete.”

13. COMPETITION
13
Accuracy
LessAccurate
Hard to Use Easy to Use
MoreAccurate
Ease of Use
Understand competitors from customer’s viewpoint

14. SALES CYCLE
14

15. DISTRIBUTION
15

16. MVP
16
MINIMUM VIABLE
MINIMUM VIABLE PRODUCT

17. INDUSTRY MULTIPLES
17
Public SaaS Forward Revenue Multiples

18. TALK TO CUSTOMERS
18
?
POTENTIAL CUSTOMERS
- What is theirrole in the company?
- How do they solve the problem today?
- How important is solving the problem? If
they had a solution what would be the
impact?
- What products are they using currently?
- How much do they pay for those
products?
- Would they be willing to meet with the
company andgive you feedback?
CUSTOMERS
- What other products did they consider?
- Why did they pick this product over the
competition?
- How did they findout about the product?
- How do they use the product? How has
that changed since they startedusingit?
- Who in the organization uses the
product?
- How satisfiedare they with the product
and service? Wouldthey recommend it
to others?

19. MILESTONES
19
RISK DECREASES atkey milestones
How does this fit with what
you know about the market?
Timing? Resources
required?

20. 20
HOW TO THINK ABOUT EXIT OPPORTUNITIES
ü Exit prices driven by market
comparables
ü Price influenced by opportunity for
likely acquirors
MOST EXITS ARE ACQUISITIONS
Acqui-hire
Product Gap
Accretive
Strategic
Disruptive
VALUE
PRICE

21. Q&A
Blake Patton
blake@techsquareventures.com
@blakepatton
www.techsquareventures.com