Direct Gain Consulting, LLC

Entrepreneurs in Residency


Having a personal coach when learning any new skills can be extremely important but having a personalized coach that is tailored to your specific industry and company goals is priceless.

Direct Gain provides mentors who are qualified ENTREPRENEURS IN RESIDENCE (EIR) and Founders in Residence. This means we’ve been through what start-ups go through and can offer options and methods to avoid pitfalls that many start-ups experience.   We also provide “fractional” help up to a full-time C-Suite level staff that can help identify and fill the voids that are preventing you from expanding or securing the necessary funding.

Customer Discovery – This is often a surprise to start-ups, but yes, an investor will want to see that you have a firm understanding of the market that you intend to pursue and that your market due diligence confirms that customers are waiting to buy your product or service.


Building Your Company

TAM/SAM/SOM is another way for investors to gain insight into your business's potential for their investment.

                Total Addressable Market (TAM)

                                Focus on:  Total market size

                                                  Example: Total LED market size

                Service Addressable Market (SAM)

                                Focus on:  Your own technology/service size

                                                    Example:  Total market size of the living color LEDs

                Serviceable Obtainable Market (SOM)

Focus on:  Which realistic market share can be obtained by myself, considering the competition, countries, trends, expected demand/forecast, my sales/distribution channels, and other market influences.

               Example: My realistic goal is to sell living color LEDs into    the LED market


  There are many websites online that further explain the TAMSAMSOM method and why it is important to understand.  Investors will want you to understand these differences and hear how you will address them or use them to target your customer base.


Team Building –All investors want to see that your team includes experts who can manage the development, positioning, and protection of your business to safeguard their investment.  You need a strong complement of business, technology, and risk management to give your investors and eventually, stockholders the feeling of security that their investment is safe and what risk there is (and there is always risk) is as fully mitigated as possible. Making sure your CXO team has the right experience and background is extremely important.

Due Diligence - Data Room Creation – After you have convinced a potential partner or strategic investor that you are the right choice for them, they will want to examine your management of key documents that provide proof of what you have been telling them. Telling them about dozens of interested customers or other strategic partners will kill your deal quickly if you can’t back it up with letters of intent (not letters of interest). A data room should contain signed documents that confirm what you are saying through signed MOUs, LOI, and/or contingent purchase orders.

Pitch Decks – Creating several strong, detailed pitches (summaries) that best describe your company and its goals is very useful to have when meetings or other opportunities present themselves. Optimally, a two, ten, and thirty-minute pitches, will help you convey your company’s message professionally and thoughtfully, wherever you are.  Your decks need to be tailored to the specific target audience.  Whether that is an angel or strategic investor, a customer, or a crucial supply chain partner.

Funding Opportunities – There are several ways to raise money for your business. These include angel investors, strategic investors, and most importantly, non-dilutive grant opportunities. SAFES

There has never been a better time to pursue grant funding thanks to the new Government IRA, which has mitigated the risk that the private investment sector perceives and is normally constrained by.

Manufacturing Supply Chain - This has gotten tougher and tougher since the pandemic and the geo-political struggles that we find ourselves in these days have intensified. Guidance for operations include R&D, raw material sourcing, component suppliers, manufacturing, transportation, distribution and retail channels, and consumer management all need to be thought of as potential challenges that must include options and solutions for unforeseen obstacles.

Non-equity-diluting Financing – Finding financing whether in the form of grants, loans, limited licensing or other financial options that will not dilute your company’s equity is extremely important, particularly in the early years.   Our partners have been singled out by programs that request our assistance in developing plans for startups to ensure that they maintain control of their vision, IP and operations while still allowing enough resources to accomplish the day-to-day tasks necessary to keep a steady forward growth that keeps in step with the company’s vision.

These are just a few of the critical areas that mentoring can help you prepare for. In addition, we provide critical networking opportunities with key partners (i.e., universities, certification companies, and market channels, etc.)

Sales-Sales-Sales - Out of all the topics above, nothing is as important as sales.  Depending on the stage of your technology readiness level (TRL) or business readiness level (BRL) is in, you will want to concentrate all your team on some level of sales.  The TRL is usually one of the main drivers of what stage you can secure sales at.  For example, TR- levels range from 1 to 10 with 10 being ready to start spending money on marketing and hiring salespeople because you have product on shelves ready to ship.  TRL 1 is often just an idea, usually not even at the bench lab scale, without a minimum viable product (MVP) developed to see if the concept works.  While all these levels can secure funding, the higher the TRL and BRL the higher your valuation and less of your company you will have to give up.

On the other hand, a company that has developed their technology and/or product to a TRL 3 or 4 level may be ready to find a development or manufacturing partner that can commercialize the technology but can’t because they have not done enough customer discovery work to show that there is a market ready and waiting for this product which is backed up by either Purchase Orders (POs),  Memorandum of Understanding (MOUs) or contingent Pos.  Without some (signed) commitments by potential customers, it will be very hard to get investors to believe you have de-risked their investment appropriately.




Customer Discovery

Website - A well-developed website will prove to be one of your most important avenues of sales…..



Pre-seed Investor Relations - When your technology or product is sufficiently ready for thorough due diligence you will need a data room that holds various levels of entry for various levels of interested parties.  In the beginning, a startup often hears from investors “we never sign NDAs” or “we couldn’t stay in business if we didn’t treat all potential customers' technical and business IP with the utmost security as if it were our own.  What they mean is that they never sign NDAs at an early stage of the evaluation process but they ALL sign NDAs once they are convinced that you have something real, and they need to have their “experts” take a look under the hood.  The trick is to give them just enough non-confidential information to convince them that you have the goods without giving them any trade secrets or proprietary information or process info.   They are tricky so you will likely need coaching on this.  Hopefully, you already have patents so they can see the basis for your claims and can be convinced without giving them the trade secrets that prevent a multi-billion dollar company from buying your patent from you on the cheap and running with that on their own.  Or worse yet, the Patent simply provides a roadmap of how to circumvent the technical issues and still gets them where they need to go.  Worse even still is someone who files a similar patent and sues you for infringement eating up all your money until you are forced to sell your company to them for pennies on the dollar.


However, once you have convinced them that you have the “goods” it's a matter of developing your valuation.  There are two methods often used in developing a start-up valuation: 

1.  Is using the tried and true “comparables” this is too complicated to get into on this short website but suffice it to say that it involved finding a few “similar” companies with “similar” technologies and presenting “how” they went for $0 revenue to (hopefully) $50MM in revenue in 3-5 years.  By the way, most investors say that they don’t expect a return on their investment in 5-7 years.  Ha!  After 2 years they start complaining unless they have put those expectations in writing.  Often “expectations” are shown as milestones.  And every time you miss one, you lose something of value.  It may be some shares of stock, an increase in salary, a bonus, a board seat, etc.  This is where you need an attorney negotiating on your behalf.  Don’t buy the bit about “well this is the company’s attorney and of course, he is working on your behalf”.

2. They use financial formulas to determine where the company shall be in 5 years based on your financial projection spreadsheets.  Good luck with that.



No startup can survive their first 3 years without strong partnerships.  Building relationships is