Ok, so you’ve just closed your first raise of startup capital. Awesome. So what now? Early-stage investors see countless numbers of good management teams presenting great products but with unfortunately with no clear milestones in their strategy. It’s frustrating, to say the least. If you’ve just raised early-stage funding, or are preparing to do so, here at my five next steps to give your startup the best chance of success:
1. Post-startup capital – Hire, hire, hire!
Hiring staff during the fundraising process is notoriously difficult. If you haven’t had the capacity to hire staff before, now’s your chance. From experience, it takes about one month to hire non-technical staff and about two months for technical staff. You may get lucky, but I wouldn’t bet on it. Ideas are nothing without a strong team, and straight from the close- the clock’s ticking.
2. Go easy on the marketing
It’s tempting to run paid marketing campaigns. But it’s also pretty expensive, and unless you can implement defined marketing goals that are clearly measurable, then it can become a drain on your capital. You need to clearly define the marketing funnel and determine the relationship between your conversion rate and your customer acquisition cost. And then monitor it all very closely.
3. Focus on the product
Spend a lot on your product. Build, test, iterate, reiterate, pivot. You know the rest. This is where most of your capital should be deployed. Both on product cost and salary costs- good developers don’t come cheap (for an institutionally-backed startup you should be looking at spending £40k+/year for decent product talent).
4. Be nice to your investors
Make sure you maintain a good relationship with your investors. To put it politely- they now own a significant slice of your business. To put it bluntly- you never know when you’ll need follow-on capital.
5. Gain momentum
Startups are hard to get right. Get the right people around you, gather pace, and go for it!!