Today Brian Kobus from Summerhill Ventures stopped by to chat with the teams about going beyond Series A (wait, there’s more to life than a Series A round?!).
There’s a lot of talk these days about raising rounds, pitching VCs, accelerators, and everything in between, but all of this emphasis is useless if startups aren’t creating valuable businesses–something which many people lose focus on when trying to raise a round. Raising capital is just one step on the longer road towards creating a market-leading company. Here are some of Brian’s top tips:
1. As you grow your company, you’re going to go from being a Co-Founder to an Executive. The way you spend your time will change significantly, and you should be ready for this.
2. Your Board is an integral part of your startup: they are a part of your team, should be kept up to speed, never lied to, and always leveraged for who they are and what they can bring to your business. You’re all in it for the long haul, will become references for one another, and you should never lose sight of the fact that you’re all in the same boat!
3. Hiring will gradually become a process that will take up LOTS of your time, since finding the right people and convincing them to work for you takes time and effort…but don’t forget that this is the most important part of your job! Identify the people you want to work with and get close to them so that when you want to hire them it’s not a headache or wild goose chase.
4. Culture, culture, culture! It might not be at the forefront of your worries pre-seed, but when your company gets to 50 people, culture becomes something you need to think about and put effort into. Make sure that your views of the company’s culture are in line with the guy who started a few weeks ago. Also, don’t forget that people are coming to your company because you inspired them. They’re there because they believe in you and your vision–if you’re not inspiring them, they’ll leave.
5. It’s so important to define your market. Articulate your vision for the market space that you are going to dominate, it impacts how customers, analysts, investors, partners and acquirers see you–use the right words so that they understand (and keep in mind that these words might change!).
6. Startups live financing to financing, so be ready for the efforts it will take to raise follow-on capital. Focus on the investors, not the valuations, when you’re raising a round. What an investor brings to the table is much more valuable that what dollar value they give your company. Choosing an investor that can get you to your goal valuation (and beyond!) is much more important than choosing the investor that gives you your goal valuation off the bat but nothing more.
7. Get other people to sell your product and build great references. Then your product will sell itself.
8. Growth is the key valuation driver: the faster you’re growing, the greater multiple of revenue an acquirer can pay for you!
9. Exits come in all shapes and sizes, from acquahires to defensive moves to get you out of the race. Know where you are in the race to know what to expect in terms of an exit!
10. Finally: always remember to listen, learn and trust your gut!