VC Minute – quick advice to help startup founders fundraise better
Click below to listen. 2m 06s duration.
Subscribe to your podcast platform of choice.
One of the other things that you want to make sure you do while you’re raising money, so that you’re ready to hit the ground running with it when you’re done raising money, is to think about your team and where on the team you could use new talent. Whether that’s adding engineering capacity, hiring sales reps or hiring senior people.
Now, usually this will be part of your pitch deck, you’ll have something about user proceeds. Investors will be asking you where you need to invest, so it shouldn’t be a surprise. But one of the things that I’ve found is that if you don’t pay attention during the funding process to recruiting and you start when funding is done, you’re 6 months away from hiring great people, or at least 2 or 3 months away from hiring individual contributors, senior executives would take a little bit longer.
So you don’t want to be in a position where you have a budget that you and the investor have agreed on, and all of a sudden the financing closes and, good news, you’re under budget on expenses because you haven’t hired those people. But you’re also under budget on revenue because you can’t ship enough product or you haven’t hired the sales people already.
That’s okay. There are worse things that have happened in the world than being on target for EBITDA or operating loss and off on both revenue and expenses. But you want to try to synchronize recruiting so that you can hire shortly after a financing closes and not way after a financing closes.
Another thing you can take advantage of in the wake of a financing as you’re reevaluating your team is thinking about whether you have the right people on the bus, as Jim Collins would say. A lot of times we founders are terrified of firing people, even if they’re not quite the right fit. Even if they’re not necessarily doing a perfect job, because if you have 10 people in your company and you fire someone, that’s a 10th of your workforce that that walks out the door. But the reality is, and I’ve heard a number of people say this to me over the years, you never fire someone too soon.
So if you have an inkling that someone is not getting a job done for you, while you’re going through the financing process is kind of the time to think, “Hey, how could I replace this person? How could I level them up?” Maybe have an open dialogue with your new investors about that and then be prepared to act on that on the other side.
Bolster is the new way to find the right executives. We supercharge startup growth by matching CEOs with transformational leaders—without the hassle of traditional talent sourcing. Built by entrepreneurs for entrepreneurs, the Bolster marketplace is packed with diverse, highly qualified talent ready for executive, advisory, or board roles. Our no-nonsense, no-frills approach makes it easier than ever for startups to find the right leaders and for leaders to find the perfect next opportunity. Start your search at bolster.com.
Visit the VC Minute homepage for more episodes and more ways to subscribe.