Yipee! Your startup has been funded.
You suddenly have sufficient capital to put in motion the plans your pitch deck promised your new investors. Term sheets negotiated, first wired funds received, shares issued. So, now what?
The world of startups is filled with cautionary tales of startups which can’t seem to navigate the new world of fiscal prudence and the dispensing of capital in a way that will drive the right outcomes. A startup founder must now become a manager and understand their fiduciary duty to a number of groups, including investors, the team, board of directors, customers etc.
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Listed below are a few things you should consider as you jot down your list of “Must dos” now that your startup has capital. This isn’t a complete list but consider it a good start!
- Deliver On Your Promise
- When you pitched your investors, you told them what you planned to do with the money you were raising. Now is the time to think about your very first steps. Document them and take action.
- Plan and Plan some more!
- Create an operational plan with key deliverables starting with a 30, 60, and 90-day plan that includes all aspects of what you’re going to do with the newly deposited capital.
- Get Your Team on The Same Page
- Congratulations, you’ve got capital. Your team is undoubtedly excited and likely thinking about the neat things you can purchase for the office or cool conferences you can attend. Be transparent about what the new funding round means not only for the company but your team as well. Make sure your team is aligned with your goals.
- Create a Budget
- Setting up a budget may not sound like much fun, but it’s crucial. Make sure the keeper of the finances, whether an accountant, CFO, or vice president of finance, is well versed in budgeting. Update your financial model. Align your KPIs (key performance indicators) with new performance metrics based on use of funds.
- Develop a Communication Plan for your Investors
- Your investors will want to know what you’re doing with their money. Develop a communication plan that consistently shares your concerns, successes, and worries with your investors, as well as your board of directors, advisory board, and mentors. This will, inadvertently, also bring a new sense of accountability to your team.
- Plan Your Next Round
- Raising capital is not fun, but it is necessary. Now that you’ve figured out how to approach investors and have developed a list of contacts, start sending signals about your upcoming round. Think about the capital requirements you’ll require and begin early conversations to get the ball rolling.
- Start Hiring (in Phases)
- Your startup is now past the time when you have to beg for help: you can now start recruiting. Unfortunately, if you don’t hire correctly, recruiting, one of your most important initiatives, can really go wrong. Work with your advisor; don’t just take anyone; be selective; don’t hire your friends, family or those you owe a favour to. Develop a robust hiring strategy. Take yourself out of the process if necessary but keep an eye on it.
- Culture and more Culture!
- This whole list is important, but culture should be near the top. When strapped for cash, most startups naturally develop a healthy culture in order to retain their early employees. But with the new infusion of capital, the pressures to perform will increase, expectations will rise, and nerves will be tested. Do not forget your why and with whom you’re doing this. Remember, be positive and have fun!
It was hard to get capital for your startup, but you’re there now, and the journey is just beginning. If you plan correctly and seek help when you need it, you stand a good chance of achieving all of your dreams.
Teruel Carrasco is vice president of entrepreneur engagement at Valhalla Private Capital.
Teruel is a Troy Media contributor. For interview requests, click here.
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