You’ve just finished your funding round, well done! You have been successful in searching for business angels, making sure you speak to them the right way, setting up your funding round and raising the funds that will get you to your next milestones! You must be wondering what’s next. In our Startup Survival blog series, we’re sharing 5 things to do after fundraising. Keep on reading.
1. Appreciate and acknowledge all the investors that participated in the round
It’s often useful to try and get all your investors together in a meeting. Often that’s not possible, but you can share a welcome email, and eventually have a call with them separately to say thank you. Whatever you do: it’s important that the investors realize you are welcoming them into the broader team.
2. Lay the groundwork for longer-term interactions and support
If you haven’t already, you should let the investors know how you would like to shape the collaboration. For example, you can communicate that you’re going to have a quarterly strategy session or that you’ll share monthly updates, or that you’ll take feedback through regular informal meetings. Make sure to maintain good relations with all your current investors and keep an eye on the potential ones for future rounds.
3. Focus on making your progress trackable and transparent
Professionalise your reporting, data and metrics tracking. Invest your time in creating clear dashboards and tracking key metrics that drive your success. That will give you a grip on your growth. Once you get money, you need to step up your game when it comes to professionalism. Any investor deserves an immediate, clear and accurate answer when they ask what progress you are making.
4. Don’t go crazy with money
Once you get serious money, you also want to get a serious cash management structure in place. On an operational level, you should probably keep doing what you’re doing, just enable your rising growth. We’ve seen too many startups who got some money and overspent on a nicer workspace or expensive but under-used software subscriptions. You think you might need this for quicker growth, but is that really the case? A mature business has to be very good at controlling the cash burn, and that’s, even more, the case for a startup that is loss-making. Just because you have money doesn’t mean you have to spend it. Every cent counts: it might seem that upgrading a software subscription plan is not such a big deal, but keep in mind that these things tend to add up if you upgrade all your plans. You want to keep that startup mentality of trying to save costs where you can while scaling up. That puts your company on the right trajectory towards financial maturity, as a profit-making business.
5. Think about your next funding round
If your next funding round is an A round, you want to start making your hit list of potential VCs. You should talk to them months, even years, in advance of raising your round. If it’s an angel round, you want to get a grip on the funnel of potential new angels and keep communicating that you’re making the progress that you are making to your existing angels to keep them involved.
A cash-out is bad for your company, and you should aim to keep your operations running smoothly whilst you raise the next round. You should start with preparations well in advance to make sure that any unplanned delays don’t actually sink you. Leapfunder makes the process of fundraising as smooth as possible, so feel free to get in touch with us well in advance of an intended funding round. We can react very quickly if it’s an emergency, but we naturally prefer a planned course of action.
Sometimes you meet entrepreneurs who seem to think that building a business is about getting successive funding rounds. So it’s also a good idea to think about whether you even really need that next funding round. You might be able to bootstrap your company. Somewhere along the line, you’re going to need to stop raising money! Normally it’s better to do that earlier rather than later. Remember: selling your product is always cooler than selling your shares.
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