Scaling your GTM engine, tools to manage your board, metrics for a Series A, fundraising in today's market, and VC Funds discuss deep tech & digitalisation.
Ten lessons to formalize your sales and marketing transition from $10 million to $25 million in ARR.
Bridging the transition phase between founder-led sales and a scalable, sales-led go to market engine is the trickiest part of scaling a cloud business, and examining our cloud portfolio over the last 20 years, we see that this generally happens between $10M and $25M of annual recurring revenue (ARR). This is a delicate chapter in a business’ growth in which companies have already established product-market fit and have sufficient demand for their products and services, but still need to deliberately introduce strategy, structure, and institutionalization to their sales and marketing organizations.
An organization’s potential revenue growth hinges on setting its go-to-market motion in the right direction at this critical stage.
Pär-Jörgen Pärson on Bloomberg: A 2022 outlook, there's still a lot of disruption to be made in the name of digitalisation
(Northzone Venture Capital)
Thanks for having me here. I think in the short term it probably has implications on some of the private companies anticipating to go public, since the quality threshold has really drastically improved or increased over the past three to six months. But I would certainly also say that the venture capital community and the fast-growing private markets are operating under slightly different timelines than the public markets. And there is an abundance of capital in the early stages, and also in the later stages to build companies to support the enormous amount of entrepreneurial activity. That’s sort of happening left, right and centre in Europe, and also in the US. And we saw over the past couple of years an unprecedented rise in entrepreneurship in the digital sector, and where Europe now has actually been the best performing geographies in the venture market globally.
Yeah, I think it’s fair to say that there is still quite a lot of disruption still to be made in the name of digitalization: just consider the fact that the healthcare industry currently is about a $5 trillion global industry. It’s largely operating with the same logic and with the same infrastructure as it did 30 or 40 years ago. And there’s a massive amount of entrepreneurial activity and money being thrown at that problem. Healthcare, I think, is probably the biggest opportunity. Fintech is still an amazingly important one, not only for the fact that it’s a huge market but most of the incumbents actually have difficulties in adapting to this new world. This is actually giving free rein to startups to come in and eat their lunch.
What I've learned from over 1,000 board meetings at the best boards in the world, including Microsoft, Airbnb, LinkedIn, PayPal, Coda, Zynga, Convoy, Aurora, and more. - Reid Hoffman
Understand this: Boards are a different kind of team
One constant in my experience is that Boards of Directors are unusual organizations. At their most effective, they function as highly-aligned and fast-moving teams. And yet they’re contextually different from most teams that form inside companies. Board members meet infrequently, spend their days in distinct environments, and have somewhat ambiguous responsibilities. Because of this, it’s often an uphill battle to bring a board together as a truly effective team.
There are a number of essential practices for high-functioning boards. These include recruiting the right board members, understanding the OKRs for board members and the board itself, building the right partnerships with the CEO and company, knowing the right ways to add value and to avoid destroying value. Detailing all of these is a book in itself. However, from my general experience and from watching Shishir deploy his rituals in the Coda board meetings, I realized you can distill some of these rituals into helpful tools.
With deal volume through the roof, the deck is more important than ever
Ramy Adeeb, Founder and General Partner at 1984 Ventures: “The best advice is meet the right folks, not the folks you can get intros to. Figure out who the right people are and put them in batches. Then, make sure you have a good deck. Part of the VC job is for us to sell the company to our partners. Go to your existing investors and ask, does this deck do me justice? When you look at this deck do you feel that my business is coming through? And if it isn’t, then work on it. Get it to a point where in just 5–7 slides, somebody glancing at it on their phone, they understand what you’re about.”
Lucy Deland, Co-founder and Partner at Inspired Capital: “Practice, practice, practice before the first time you’re doing it live so that you have really stress tested whether the deck serves you when you’re giving the pitch and whether your narrative is really flowing, landing and easy for someone to understand. You want to practice so many times that it seems so natural that it’s the first time you’ve ever done it. The worst thing that happens is when I hear a good pitch and I know I’m in one of the first meetings. Then I’m trying to work out what is the fact that I’m early in the process and what doesn’t work about this narrative.”
For this post, we analyzed both external data and internal milestones for Initialized companies in three categories – SAAS, D2C and marketplaces – to see what enabled them to close Series A rounds.
While raising financing isn’t the end goal for a company, some key metrics can serve as a proxy for traction and product-market fit, which is important to demonstrate at the Series A stage.
There are other metrics that may come into play depending on the business, such as liquidity, time to fill, engagement, LTV, CAC and retention but the above metrics are solid starting points for a conversation on the strength of your marketplace business.
Companies with groundbreaking IP, underpinned by years of painstaking research, may be years more away from a commercial launch. And even with a brilliant product, they may still be ‘too early’. Investing in the sector requires patience and expertise – while starting a business is often a labour of love for the founders.
Definitions of deep tech are wide-ranging, but they all agree on one thing: complexity. Fundamentally, we think deep tech sets out to solve hard problems in hard markets. As investors, part of our job is to assess the direction of travel and recognise the potential in both the technology, and the people behind it.
To meet the challenges faced by the founders working at the vanguard of deep tech R&D, we’ve built a team drawn from across the worlds of academia, computer science and engineering.
Our operational experience means that we can respond to the complexity of the field and recognise the potential in emergent technologies and markets that are yet to bloom. It also gives us the tools to support the pioneers in building the companies that will shape the future.