You’ve received funding: Now what?
After days and weeks and months of putting everything on the line, you made it.
You’ve got funding!
But the game has just begun.
And it’s time to get hustling, again. Akin to moving up levels in a video game, when you get funding in your startup journey, you only unlock the next level. You get resources, but the journey also gets more difficult than the one you just sailed through. Moreover, the usual cash runway for any start-up starts to dry up within a year or so. As the celebrations take a minute, you might start thinking,
Now what?
However daunting this question may be, know that a lot of entrepreneurs who are today successful, have been here. You may have a long bucket list of things you want to check off using your newfound financial affluence, it would be wise to calmly divert your funds towards making wiser spending decisions.
How to do that?
Here is your checklist on how you get the most out of your first funding round and you can gear up for the next.
Hire, but carefully
The first logical step does seem like getting more talented people on board but if you haven’t created a space for them to work in, it can prove counter intuitive to hope that they’d do it themselves. Hire people whose temperament aligns with the culture you’ve defined for the company to follow, and are likely to be around for long enough to see it succeed. Make sure you find room for inclusivity in the exclusivity of being in your team, diversifying the hiring criteria as much as possible. On the flip side, avoid hiring people out of goodwill if they are not a good fit for the direction you want to take your company to.
Also, remind the team you have that it was impossible to have gotten where you are, without them.
Make a budget for your investor
Becoming directionless after achieving a milestone is only natural. Being fiscally responsible takes a lot of willpower to not spend on the things you want, including lavish chairs for the office. Review your business plan and re-evaluate your cash flow forecast. Make your shopping list as concise as possible to make sure you bite off less than you can chew, and give your investor a detailed plan on how the placement of their funding will look like in the first few months. Make use of the tactical knowledge your investors can impart to you. Keep your goals close and your investors, closer.
For any start-up, tech comes first
Set up a technical framework but frugally. Invest in software and hardware that is needed for you to get off the ground. Taking small decisions such as planning your technical evolution can make a world of difference during your initial, thriving days.
Scale quickly without losing moral ground
Most start-ups hit the road from the get-go and make decisions that help them scale quickly, but in the process, lose out on moral ground and end up with a weak internal structure. They abandon their core values, and this can take a toll on the start-up as well as the people associated with it, in the present and the future. Once the work environment is poisoned, there is very little coming back from it. Learn from your contemporaries and their mistakes. Be conservative about the money and the talent you’ve got, deliver on the expectations of the team instead of the other way around.
Save money and by way of it, your start-up
A callback to how we began this conversation, in the words of Warren Buffet, the master investor, “Do not save what is left after spending, but spend what is left after saving”. And that is the best fiscal advice for anyone, whether business-wise or personally.
Remember, your business plan is your guiding beacon, the investors are your mentors & navigators, your team is basically your car, and you, the driver.
