You closed a successful Series A round of financing. What happens now?
Holy $hit, you closed your Series A round!!! …Now what do you do?
All of a sudden, things like a formal Board of Directors, hiring (lots of) people, establishing managers, setting up key performance indicators (KPIs) and actually delivering on the vision you sold your investors needs to happen, in real-time and all at once. It can be extremely overwhelming. Add to this, a true move from “founder” to “CEO” and the pressure can be immense.
From Founder to CEO
Once you move past 12–15 employees, the role of founder changes. After employee number 15, you start to see the formation of obvious departments as the lines between sales, marketing, support and engineering truly start to form. As a founder, there are new struggles. You start to experience a loss of control and a feeling of not being in the know for every little thing that goes on in your company.
This is ok and it’s a natural evolution of your business. You raised the money to grow the business, didn’t you? As your business scales, you have to trust that the team you have hired can get the job done and that they also share in your higher-level vision. You need to move from founder to the leader of the company. You’re the one who is charging up the hill every day and your team needs to be right behind you.
At Fusebill, we implemented the cadence of a monthly town hall meeting. At the town hall, we talk about everything from vision, focus, performance and even include an open mic section where anyone can ask questions or bring up a point for discussion. The open mic piece is my personal favorite.
Investor surprises — SHOULD NEVER HAPPEN!
One thing I take great pride in is my relationships with my board and investor group. After Series A, most of these people are the exact same people you have sold on your vision for growing your business. They have bet their careers on you and you need to always be mindful of this.
You may completely fail, you may bomb a month or a quarter, you may lose an important logo or lose an important employee — never, ever hide this from your board/investor team. Talk about these items and get in front of them as quickly as you can. Investor/board trust in you as the CEO is a HUGE factor in ensuring long-term success.
Personally, I send an email every month to our board and investors on the first day of that month (no matter how good or bad the prior month was). I touch on everything that happened in the previous month from a key metrics perspective, key learnings and all highlights — good, bad, and ugly. (Shout out to Jason Lemkin over at SaaStr for that one.)
Sending the email each month shows your board and team of investors that you are aware of everything happening in your business, while it also serves to avoid any surprises. The very cool thing about these emails is that they tee up your quarterly board meetings very nicely, and for me, have resulted in much less reporting at the board meeting. Instead, that time can go to strategizing and having deep dives into areas where I need help and board feedback.
A formal Board of Directors!
For most of us, the idea of a formal board of directors could be seen as worse than a 4-hour visit to the dentist. Really, WTF is a board of directors and why do I need one?
As a founder-CEO, you move from being the only boss to now being responsible to report to 4, 5 or 6 potential bosses, with each being different and each caring about many different things.
After closing your Series A, I would strongly recommend that you meet with each of your newly-established board members. Find out exactly what they care about and how often they want to hear from you.
Some will not want to distract you, others may be valuable allies and can be continuously helpful in your day to day operations. Remember, you chose these people. (See point 5 in my other article: “Select VCs carefully — you’ll be running a marathon with them, not a sprint.”)
It took me a while to realize that my investors work for me. They are here to help my company grow and I need to leverage them whenever, wherever I can. I repeat: My investors work for me and not the other way around.
If you think about in the way I mention above, your board meetings should be seen as super helpful and not super annoying.
The switch to being data-driven & implementing a KPI program that works
Pre-Series A @ Fusebill, we would talk about our funnel at our exec meeting and look closely at our SaaS metrics upon month end. This was usually a few days after the close of the previous month.
One of the most valuable pieces of help we received from one of our Series A investors was the implementation of a strong and proven KPI program. (Shout out to Kevin & Kent @ Scale Up Ventures — I might do a full medium article on this topic!)
The KPI program allowed us to change into a data-driven company. We now have a laser focus on the unit economics within our go-to-market strategy. At Fusebill, we even implemented flat-screens with dashboards throughout the office (hosted by our friends at Klipfolio). This ensures that every employee is aware and focused on the most important areas within our business.
For me as a CEO, I now have a mechanism to inform my board regularly, forecast with much more accuracy and focus/manage my entire company.
The Path to Series B…
Now that the A round is closed and your company is taking off, you, like most companies in your shoes, you now have 18–24 months before you most likely will need to go out and pound the financing trails for your Series B — Growth round.
Catch your breath when you can, but there isn’t any real downtime when growing a company. Whether you are entrenched in funding rounds, or growing your company between rounds, there is always something that needs your attention. Just as you did during your Series A funding round, keep your goals clear and plan on taking that next step as soon as you reach each milestone or target.
Best of luck!