Advice from the Founders: Balancing Fundraising and Close Sales in a Small Startup
We send out a weekly email to all of the founders in our portfolio, as well as the founders we have met in the ecosystem at our events. Every newsletter has a GIVE, an ASK, and a piece of NEWS.
We received this ASK from a founder outside of our portfolio:
“I run a startup of five people — I’m figuring out how to balance fundraising for my startup with making sure we close sales with our enterprise customers. What best practices could you share?”
We put the ask out to the community, and here’s some of what we heard back…
“We are going thru the exact same thing here. To address it, we hired a commission-only salesperson and were very generous in our offer. At our stage, building our customer base is less about the short-term revenue gains and more about increasing our MRR and making us a more attractive investment. So we trade a healthy amount of that short-term revenue gain for more help with sales.
We just started this process a few weeks ago so the results aren’t in yet. But I’m already excited about the progress being made and have way more bandwidth to focus on other work streams like fundraising.
Hopefully that’s helpful. There are other issues that have come with this approach and I’m happy to discuss further if there is a request.”
-Seed Stage Founder, NYC
“For every sales prospect they get, have a pre-formatted email letting clients know that they are experiencing higher volume than usual but that they want to make sure that client gets the attention they need. Provide an estimation of someone getting back to them within the week. That will clearly explain that the email has been received, that their inquiry will be answered, and an expectation that there will be a delay. Then make sure every email is tracked either in a system like Pipedrive or at the minimum, a spreadsheet.
Have one day a week that is dedicated to sales outreach, and following up with all inquiries. Make sure a team member is assigned to help with the volume of traffic and responses on other days. Depending on the business, the founder can also set up specific events so that he or she is able to meet many potential clients in person at once during the set times.”
-Series B Senior Team Member, NYC
“You have to run fundraising like a sales process and you have to treat it like a full-time job… those are two “truths” or commonalities of startups that successfully raise capital (I’ve talked to several hundred sample size…)
No real shortcut. If you can give some of your duties to a co-founder so you can focus 100% on fundraising, or if you can hire a part time COO to handle your duties, those are both hacks.
This podcast with Maria Chatzou covers that. Maria hired a p/t COO and was able to have 167 meetings and raise $3M in two months.
-Seed Stage Founder, SF