After all the research, all the intros, all the pitches, and all the negotiations, you’ve done it – your startup has gone through a successful funding round. You’ve made it to the other side…so what’s next?
The hard work isn’t over – it’s time to put that funding to good use and start implementing your plans for growth, customer acquisition, and more. Sometimes, however, that can be easier said than done. Here are a few of the most important steps you can take following a successful funding round to continue building on your momentum:
- Don’t forget about your investors. Just because you’re no longer raising capital doesn’t mean that you can ignore those who’ve backed your startup. Even if they don’t become members of your board, you will still at the very least need to keep investors updated about key meetings, new partnerships, product developments, and any key performance indicators (KPIs). Essentially, you want to proactively answer their questions and continue to build excitement around your brand. By building a high level of trust and communication, you may potentially see these relationships become invaluable for your follow-up funding rounds.
- Invest capital where you’ll see the biggest impact. While it may be tempting to immediately jump on developing new product lines or to move into a huge new workspace, take the time to determine where those funds could truly make a difference. If the demand for new services or a product expansion doesn’t exist, why put funds towards something that won’t sell? Likewise, if you haven’t attracted new talent and hired on new staff, why invest in space that will go unused? It’s important to be precise and analyze where those funds are most in need to continue lean operations and smart money management.
- Start thinking about your next funding rounds. While it may be the last thing you want to think about, fundraising really never ends. On average, it takes 40 investor meetings to close a funding round – and seed rounds take about 13 weeks to complete. Given that length of time, you shouldn’t wait until you are desperate for funding to start raising capital. As founder, every interaction you have with potential investors strengthens your relationship – setting the scene for future funding discussions, widening your professional network for intros to VCs or angel investors, and giving you insight into what investors look for prior to making an investment.
- Maintain (and hone) your vision. Remember that pitch you made to investors? Don’t just set it aside – now is the time to really assess where you want your business to grow and start taking the necessary steps to get there. Now that you know what you’re working with, now is the time to start refining your plans. Do you want to improve your customer acquisition strategy? Don’t just increase your advertising spend. Research best practices in marketing, determine how to engage with leads, and consider scaling your sales team. Do you want to build partnerships with retailers or distributers? Dedicate time to building relationships with companies that are in line with your startup’s core values, work on improving your KPIs, and begin strategizing for the eventual discussion about inventory and pricing.
Raising venture capital is no small task – but what you do with that capital after a successful funding round has the potential to make or break your startup. By staying true to your vision and astutely investing back into your business, your startup may be better positioned to meet that next funding round with open arms and optimistic prospects.
Not a MicroVentures investor? Sign up today.