You Just Got Funded. Now What?
October 31, 2020
You have lived the startup life for so long. Regular meals and sleep have been foreign concepts. Your team has spent long nights building, testing, restructuring, fundraising, networking, and doing whatever it took to get to an MVP, and finally, all the hard work has paid off. You did it. You secured your first round of funding.
Once the celebration has ended, and the champagne glasses have been washed, you need to ask yourself now what?
It may seem like it is time to take a breather because you have been working so hard for so long, but here is where the real discipline needs to kick in. Without a plan and additional resources, it is easy to quickly become sidetracked from your vision and the next steps for your organization.
Build A Roadmap
Hacker Noon shared that the creation of roadmaps is directly related to the key business objectives.
A roadmap for your startup sets your sights on a longer time horizon. It helps you consider what you will need to stay competitive, ensuring that your organization is flexible and ready to take advantage of market opportunities as they become available.
How to create a roadmap:
Identify your strategic objectives
- Challenges looking to solve
- Growth and revenue objectives
- Product development
- Segments targeting
Define your functional needs and priorities
- Technical infrastructure
- Additional funding
Establish realistic timelines
- Be transparent with tasks and milestones
Tools used for product road mapping can also be used for business planning.
Just a few useful applications are:
Be Smart With Cash
As most startups have been doing so much with so little for so long, their first inclination is to want to spend. While it is necessary to significantly ramp up the spending to achieve next phase goals, it is critical to keep an eye on costs and only spend on growth-focused initiatives.
- Be cheap (on everything but product)
- Spend a lot on the product - the one area where you can't be cheap.
- Don't blindly throw money at advertising. Unless a marketing initiative is measurable, you should not be spending money on it, period.
- Time is money, so spend it wisely.
Showing discipline with funding will position you better to scale and take advantage of opportunities, but it will also make you more attractive in your next round of funding. Whoa, you might be saying. The check just hit my bank account, and you are already talking about the next round of funding? Yes. CBInsights estimates the median time lapse between funding rounds for startup companies to be somewhere in the neighborhood of 15 months to 18 months for Series A to Series B funding. With such a short runway, it makes sense to plan judiciously and build relationships with potential next round investors. You will most likely need to start your next round of fundraising in no less than a year.
Jake Gibson, co-founder, and NerdWallet advisor, shared his prioritization insights in an Entrepreneur article.
- Beware the seduction of task-based lists. The prioritization elements are simple: Know what tasks need to be done and rank them in order of priority. This might work for middle managers at a mature company, but for a startup entrepreneur, this can be a Sisyphean exercise in futility. You're never going to finish that list and would waste time each day revising it on the fly.
- Focus solely on themes that will drive growth. Of the 100 things that crowd the entrepreneurial mind as things you "need to do," about 98 will incrementally improve your company - but two have the potential for exponential growth. Focus on those few, and the rest of your niggling worries will take care of themselves.
- Forget perfectionism. If you are serious about prioritization, you need to be able to drop something in midstream to focus on another task that has the most considerable potential to drive results.
- Do the most challenging thing first. Whatever you don't want to do, do it first, and it eliminates the nagging dread that will sap energy away from other tasks as you postpone the inevitable.
- Don't plug leaky boat holes - switch boats. If you're spending your time spreading your fingers and toes across leaks springing up through the hull of a business venture, you may wish you had more feet and hands to cover the deck. But maybe the real problem is the boat itself.
Once you have access to additional resources, the inclination is to say yes to everything. Requests to add features, enter new markets, and expand onto other platforms. Learning how to say no is a crucial skill for entrepreneurs. It is important to defend your product and expertise and focus on what you do very well.
Growing the depth of your product and getting it down pat will help you gain experience and confidence before you begin adding features and going wide.
Maintaining a sense of urgency and alignment can be more difficult as your organization expands. This is especially true under recently distributed working conditions. Creating regular systems and structures that allow employees to share feedback and that encourage transparent organization-wide conversations will help ensure more ongoing alignment and increased employee satisfaction.
While spending with discipline is critical, the one inevitable task that will help take your organization to the next step is hiring smart and building the right team. Founders, of course, see their company as their baby. But to grow, entrepreneurs must begin to take themselves out of the equation and relinquish some of their control. As soon as you start growing, day-to-day responsibilities increase significantly, and without the right help, you will never have enough time to focus on developing your product, fundraising, or marketing.
However, leaders face significant challenges finding the right talent to build the best team. Alon Alroy, co-founder, and CMO at Bizzabo, shared his suggestions for hiring in-house talent needed to scale.
- Only hire 'A-players'
- Look for potential future leaders
- Don't compromise on culture fit
- Interview enough candidates and move fast when needed
- Have a great onboarding plan
It is also essential that you don’t stop recruiting once you have made your first hires. Continue to network and seek out talent as you never know when you will need to add additional staff as your startup grows.
Tech startups face many challenges, and you have made it over your first major hurdle, getting funded. By making a plan, managing your bottom line, prioritizing efforts, focusing on what you do well, and assembling an aligned team, you will significantly increase the chance of realizing your vision and taking your company to the next level.