Fundraising is freakin’ hard.
It’s time-consuming and draining. It requires being energetic and up 110% even when you’ve already been rejected a million times over. It’s a big sales job.
But there’s one aspect of fundraising that no one talks about: how to balance growth and fundraising at the same time.
For most companies, growing your revenue (or user base for consumer apps) while you’re fundraising is incredibly important, especially since the typical raise will span over a couple of months (in a good case scenario). Investors want to see things progressing, and so you can’t let customer acquisition slip.
However, for seed stage companies that have small teams, this is incredibly difficult. If it’s just you and your co-founder in your startup, 50% of your team has dropped out of the business entirely during this time period. Moreover, often the CEO is still either doing all sales and marketing or is still heavily involved at this stage. So, the remaining team members are often people on the team who may not have been involved in customer acquisition at all nor have the skill set. So what do you do?
If you’re going to fundraise well, you’re definitely going to need to spend 100% of your time on it as the CEO. So that means that before you start fundraising, you’ll need to look at all the projects on your plate and:
- Dump them altogether
- Train and hand them off to teammates
- Exchange them for outsourced help or automate them
Inevitably, this actually turns into a prioritization exercise, which is useful for a lot of teams. You may find tasks that really aren’t that important. Dumping projects and finding focus is good!
For tasks that are super important to keep running as-is, you’ll need to train up teammates or bring in help to continue them. Sales, marketing, and customer acquisition most likely fall in this bucket. Is your technical co-founder an introvert? It doesn’t matter – he/she might need to do sales. This can be incredibly difficult for some, but he/she has to step up.
Lastly, you’ll find that you can modify or automate some tasks so that they are no longer on your plate or so that it’s easier for someone else to do. For example, perhaps you are doing all the lead generation right now. You can likely modify the task and outsource that work to another company or person. Perhaps there are scripts you can write to take over tasks you’ve been doing manually. This is probably what you’ll need to do to prepare to scale anyway.
This whole transition will take time, and so you cannot just start fundraising without planning for this transition.
This process can take typically between 1-4 weeks depending on how many moving pieces you have. It’s incredibly involved, and yet no one talks about it when they discuss fundraising. Keep this in mind before you start your next early stage raise.