5 Things I Wish I’d Known When We Raised Our Series A
This post originally appeared on Forbes
At least that’s how it felt when those millions of VC dollars hit our bank account. A few years of hard work had been rewarded with an investment to help us grow going forward. Naively, I thought it would be easy from then on. I was wrong.
Looking back now, these are the five things I wish someone had told me when we raised our Series A.
Would I have been open to listening? Not sure. In case you are, here are the five things I wish I’d known…
1. Set a Clear Milestone
During our investor road show, we pitched and pitched our business so much that it got hard to even know if we fully believed the story we were promising. Once the money was in the bank we needed to reset and refocus to get clear on what next milestone that capital was for. We didn’t do this.
Instead, we just got back to work trying to move key metrics up and to the right. Sometimes it worked. Most of the time it felt like we were thrashing, grabbing at things hoping to solve some puzzle without being clear on what we needed to solve.
When you raise capital, you need to slow down for a moment to identify the next milestone that capital is earmarked for. If it’s to get you to the next round of funding, then what is the story that you want to be telling at that raise? If it’s to get you to profitability, then what’s the model that achieves that? Over time the milestone will change but that’s no reason to not be clear on what it is today.
2. An Operating System Makes Everything Easier
With your milestone set, having an operating system accelerates everything. Without one there’s little accountability, no focus, and you’ll struggle to get regular results. I know because it look us two years post-raise to establish our operating system.
Two years of sluggish progress that we rationalized was part of the territory. We were wrong.When we finally put the time in to create our way of doing work together, everything got easier. Everyone knew what we were trying to accomplish. Everyone knew how our progress was tracking. Leaders and teams knew what they were accountable for. Conversations about how we could improve became regular. Why the importance of an operating system isn’t taught is beyond me.
So, I created one - named Clarity - to help teams like yours be better. Use it if you’d like.
3. Offsites Create Leverage
It’s easy to get sucked into the day-to-day hustle. There’s always more work to be done, people to meet, fires to put out. I was a master at rationalizing that we didn’t have time to “slow down” and had to keep grinding.
The truth is that the only way to speed up is too slow down. Leadership team offsites were key to making this happen. An offsite lets you set down the work to get clear on the strategy. As part of our operating system, we established a quarterly one-day leadership team offsite and the impact was instantly noticeable.
Here’s why…A quarter has about 65 working days in it. If you could invest one of those days to get absolutely clear how to best use the remaining 64 days, wouldn’t you do it? It’s 1.5% of your time to boost the performance of the remaining 98.5% of the quarter.
Well-run offsites are instant startup leverage, ignore them at your own risk.
4. People are the Secret
As we began to scale, more and more employees started showing up at our door. While we weren’t horrible at hiring, I didn’t fully appreciate the upside of getting the right people in the building. And on the flip-side, how disruptive and even painful bringing in the wrong people can be.
In some ways, this was a symptom of not having that clear milestone or an operating system - when you have those, it’s much easier to understand what people you need going forward. Without this we often hired people as bandaids to problems versus being truly strategic about hiring.
Similarly, our onboarding was sloppy at best. New people were handed off to young managers and we more or less just hoped that they’d get up to speed quickly. If I could do it again I would treat our onboarding as a product - something to be iterated on and improved over time. An experiment as simple as interviewing every new employee 30 days post-hire could have had a significant impact in helping us level-up quickly.
5. Invest in Yourself
Our mental model for the Series A investment was that the money was earmarked solely for growing the business. We believed this so much that for the first year or so afterwards, we didn’t invest anything in ourselves. We found out the hard way, that the business could only grow as fast as we, the leadership, grew. In the same way that the people you hire impact your ability to scale, the people that leaders surround themselves with impact your personal ability to scale.
Having advisors, mentors, or a coach to work through current challenges is massively beneficial. As a leader, you’re not supposed to figure it all out on your own so invest in yourself by tapping people who have been there before and can help you improve.
There’s certainly many more lessons learned along the way, but these are a few big ones. I hope they might save you learning them the hard way.