This video focuses on what startups need to do after successfully closing a funding round. It emphasizes that funding is a stepping stone, not a final milestone, and highlights the importance of having a strategic roadmap and executing on promises made to investors.
What this video covers
So, closing your round of financing is going to be just the beginning of multiple steps and multiple things that are going to happen and that need to happen. In today’s video, we’re going to be breaking down for you all the insights, all the tips so that you’re ready to really tackle what’s coming your way with a bang. So without further ado, let’s get into it.
You are funded, so now it’s time to get to work. What this means is that financing, getting money from investors is not a milestone. It’s a stepping stone because now the expectations begin. What you need to do is, yes, you want to celebrate and do all of that stuff, but you haven’t achieved success. You just got the money to get you to where you want to be. Now, what you want to do is you want to get clear as to what is that strategic roadmap and what execution or things you need to be doing with your team in order to deliver on your promise to those investors that gave you the money.
While I say that getting financing is just a stepping stone, it’s actually a Big deal. If you take a look in the U.S., for example, there are a thousand pitch decks that are being created every couple of minutes. There are over 500,000 new companies that are launching every month in the U.S., and only 1,500 companies get money from venture capital firms on a yearly basis.
Sales and marketing are going to be one of the biggest areas of focus. Once you’ve got that money in, then you need to deploy, and you need to expand. Now is the time to put your product or your service in the market to capture those customers and to go faster. Because going faster is going to allow you to be in a position of strength when in 18 or 24 months you need to go back to market to raise more money because you’ve been able to achieve certain milestones or goals.
Now, you also want to define new metrics and KPIs. Those KPIs, which are the metrics and the goals, are going to be much different from the time before you were raising that money. Now that you’ve got the money, you have more resources, you have more dry powder, and you should be in a position to achieve bigger and higher metrics.
You want to get your team aligned. You want to get them enrolled into that vision and that future that everyone is living into so that it’s compelling enough to really be rowing at the same time with the same moves as everyone else.
Now, what you want here, is to make sure that they are not only a fit with the culture, and that they’re A+ players, but also you need to look for people that are going to work very well with the employees that you already have in the business because even if it’s a rock star, it may not be a fit with the other players that you have in your team, and that could be an internal cancer and completely toxic and something that you want to avoid.
Now is the time to systemize and automate investor updates. Now that they’ve given you the money, you want to be keeping them up to date as to what are some of the milestones and the progress that the company is making. The further that you are in the life cycle of the business, probably the longer that you’ll wait to be sending those updates.
The younger that you are, probably the more often you’re going to be sending those updates. Typically, you’re going to be starting those updates on a monthly basis, and then you will be shifting to a quarterly basis. Probably, quarterly if you are at a Series B and past, which is $5 million+ in revenue. If you’re $5 million and under, you’re probably going to be going on a monthly basis to keep people warm.
The reason why you’re doing those updates is so that whenever you need the money, they already know what’s going on. Or maybe they are even the ones that are offering you the money because they’re excited with how things are going.
