When seeking series B funding, the goal is not simply securing more funds to keep doing what you’re doing—even if what you’re doing is going very well. With this new round, you’ll want to really start thinking about how your company is going to scale and how you will move forward and refine your product.
The first step is to think about where you’ve been. Think about what you’ve learned in Round A. How much does it cost to produce your product, and how does that compare to how much you would like to sell it for? This helps you strategically examine what costs you need to eliminate, as well as what you can do to increase your profit margins. By now, you should have a repeatable process and go-to-market strategy. Acquiring capital will allow you to invest more in channels that have already proven to generate revenue.
When you’re coming out of series A, it’s incredibly important to start thinking about things as if you’re becoming a more mature company. Take your core product and start refining an operational model around it. You want to have a grasp on what changes you can make to produce your product for less.. Remember: Refine, refine, refine.
The main point here: you’re not just continuing as you were with more money. You need to actually build on what you have. It’s not just about taking your idea and running with it to try to get as much capital as you can. More money can only go so far if you don’t invest it back into your company.
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There are three key things you’ll want to use your funding on. First, hiring a top-tier leadership team with proven experience. While your current team may be amazing and motivated, you still need to have people in positions of leadership who have financial expertise, and a proven track record of growing and guiding a company.
You’ll also want to focus on building your sales team. No matter how much funding you’ve secured, each head can only acquire a certain number of new logos. If you want your company to grow exponentially, you’ll need to hire an appropriately sized (and skilled) team to keep up with your expansion.
Investing in stellar customer success team members and initiatives is crucial. The resources to give your customers support, as well as education to make your product optimally useful for them, will help retain revenue you’ve already secured and reduce churn.
With a stacked team to steer the ship, as well as a razor-sharp plan of how you’re going to expand your business (beyond simply selling more), you’ll be better positioned to make the most of your Series B fundraising.
We’ll say it again: this level of funding necessitates a well-thought-out plan for scaling. Show what strategies you have for expanding your business beyond increasing sales. What new projects are you going to look into? What R&D efforts will you take to find new ways to expand your current product? Remember, it’s going to take time to see results of these investments in your business. Give it time.
You’ll also want to build a real customer base that has feedback for what they actually want. Really refine your product to be something that people actually want and then evolve it. The people who are using your product and have suggestions for improvements and changes are going to be entirely more valuable than any of your hypotheticals or new ideas.
Your company and product have a lot to offer, and solve many of the problems many people face. By being intentional and strategic into investing your capital, you have the opportunity to enact meaningful change more consistently, and to a greater degree.
KPI Sense helps companies every day tell their financial story and optimize their financial data to share with investors. Drop us a line to chat with one of our team members about raising capital for your business.