Post-Fundraise Playbook
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We outline the key steps and challenges involved in the post-fundraising operations of a startup, focusing specifically on the period immediately following the successful completion of a fundraising round.
1. Due Diligence Findings Report
After the fundraising process, the investors conduct due diligence to verify the details provided in the proposals and assess the company's financials, sales and marketing data, and technology.
The due diligence findings report highlights areas of opportunity, challenges, and recommendations for improving the business to meet mutual goals with investors.
2. Financial Model
Create a financial model that aligns with the growth projections shared during fundraising.
This model should determine capital allocation, growth strategies, and investments needed to achieve projected goals.
3. Go-to-Market (GTM) Operating Plan
Develop a robust GTM operating plan that aligns with the financial model and growth projections.
Key components of the GTM operating plan include:
Growth Target Alignment: Define bookings, expansion, and churn management goals based on strategic considerations.
Demand Generation Plan: Determine how to generate the required number of leads (MQLs, SQLs, etc.) to hit growth targets. Identify the most efficient marketing channels and allocate capital accordingly.
Sales Capacity Plan: Ensure adequate sales capacity to convert generated leads into closed deals. Understand hiring needs, rep quotas, and activity levels.
Customer Success Plan: Outline the people and/or technology required to ensure customer success. This can be reactive based on demand.
4. Hiring and Recruitment
Develop a comprehensive hiring and recruitment plan to find, onboard, train, and retain top talent.
Address key questions such as:
How to find the right people with the right background?
How to ensure successful onboarding and training?
How to retain top performers and manage low performers?
5. Challenges in Post-Fundraising Operations
Aligning Targets and Assumptions: Many plans involve assumptions due to new initiatives. Regularly test important assumptions and adjust the plan as needed.
Interconnectedness: Ensure alignment between marketing, sales, customer success, and hiring/recruitment plans. Disconnects can have ripple effects.
Hiring Speed: Begin recruiting top talent as soon as possible, considering the time required for them to leave their current role and join your company.
Speed of Planning and Decision-Making: Delays in aligning on plans and making decisions can hinder execution. Prioritize planning and decision-making to move the process forward.
6. Conclusion
Companies that demonstrate effective planning and execution capabilities attract future investors and increase their chances of successful exits, such as strategic acquisitions or IPOs. Conversely, companies that struggle with planning and execution may face challenges such as down rounds or fire sales.