Three Things Start-Ups Need To Do After Receiving Funding
If you're the founder of a startup that has just received funding, you know that your job isn't done. In fact, while getting that money can be a relief, you now have to move extra carefully to ensure that your company doesn't suddenly go off the rails. This is especially true if you've received a huge amount of funding because the large amount can make you feel a lot more prosperous than you really are. The time after you get funding can actually be more difficult because now you're responsible for delivering on your promises and keeping your company afloat.
Move Slowly
You have a business plan, obviously, and once the funding comes through, there's the temptation to take on too much. Your investors may want you to take your work in a certain direction, customers may want more customization than you can effectively give them, and so on. It may also be tempting to suddenly upgrade everything to make your company look like the typical Bay-Area startup stereotype -- sleek offices and company perks, instead of the shared spaces and bargain vending machines you had before receiving funding.
Some agreements -- being able to customize a product for a group of customers, for example -- and some upgrading (please, feed your employees better) are excellent ideas that improve customer and employee satisfaction. But don't assume that the high-tech office will make you a success, and don't let customers pull your company's vision for its products too far away from what you intended.
Staff the Company Properly
You've gotten a stunning amount of funding and now need to have more people working with you in order to expand the company and increase business. But don't rush to hire lots of specialized employees who handle only a few tasks. Expand more slowly -- ensure that your departments have the minimum number of employees needed so that everyone there can work without spending their lives at the office, for example -- and build from there. Note which departments still seem understaffed and which projects could use specialists. As for management, get your board and upper executive positions staffed before looking at middle- and low-level managers. Basically, instead of assuming that all work must be divided up immediately, divide slowly and only where necessary.
Don't Stop Looking
This is likely not your last round of funding. You'll need more as you reach milestones in your company's development and as you expand what you're doing. New product development, international sales, and other aspects of expansion can all require additional amounts of money that you may not be able to get yet from your current profits. Keep developing your company's future plans and seek funding well before you reach those stages. You don't want to put plans on hold because you haven't looked for the funding yet.
You may want to set up a consultation with the start up investment companies you're already working with to see what they've noticed with previous startups. They may have seen patterns of behavior that ended up being more or less helpful, and if you can find out what these are, those give you guideposts you can follow as you grow your company.