Companies spend a lot of time and energy on raising money. Getting funded generates a feeling of validation for the product; it signifies confidence in the product by the investment community. If calm and sobriety are absent in management, the company’s vision gets diluted in a false sense of assurance that money will solve everything.
During pre-funding, the focus is often entirely on how to raise capital to the extent that the company goes through a vacuum of direction soon after funding. The following tips are on how to stay on course during post-funding:
It is tempting to start firing on all eight cylinders once there is money in the bank. Having promised your investors growth, the first impulse is to start hiring. However, Inc. advises against this, citing the need to take at least a month to reorganize priorities, adapt, and figure out the next steps.
Prior to getting funded, most companies hire a generalist because they cannot afford specialists. However, during the growth phase, the company needs skilled staff who focus on one task and do it well rather than employees who can do multiple jobs. These specialists know exactly what solutions/services will produce growth and will save the company a huge amount of research time. Specialists are also open to learning about new products and solutions that fit within their niche set of skills.
The assumption that a professional will figure out their job is erroneous and destructive. While a specialist’s job is to focus on a singular aspect of the business, it is crucial to help the team keep their sights on the goal and vision. To this end, schedule regular meetings to discuss the implications of raising capital and the steps moving forward.
Managing financials is often a distraction for a company that is not in financial services and while doing them yourself is inefficient, not doing them is not an option. Therefore, hiring a professional accountant or ensuring existing staff has “ramp-up growth” experience is necessary to keep track of financial performance and provide investors with specific financial information.
Remember to consult with your investors when making tactical decisions, and track business performance using open dashboards.
As always, Lead411 tracks recently funded companies. These companies are 10x more likely to be adding solutions/services that you may offer. They are also more likely to hire and utilize a number of different professionals to help them grow. To learn how you can access this data and make a warmer connection to recently funded companies, sign up for a product tour today!