After you raise your first round of funding, it can be easy to get into the mentality that everything is awesome—and now it’s time for a vacation. Fundraising is challenging, and it can take a while—the average seed round takes 11-15 weeks. Sometimes it’s easier to keep yourself motivated by telling yourself everything will simply go back to normal afterward, but this isn’t actually the case. Here’s a quick anecdote from a CEO after they raised an A round:
“We just had our first investor meeting this week after closing the financing. We spent so much time actually fundraising that this was our worst month this year for performance. I literally saw the investor’s face fall. I just promised the world, and our stats are already falling behind the promise. Also, I need to double my team in six months.”
This sort of occurrence isn’t uncommon after fundraising. But keeping up performance isn’t the only concern: With more cash on hand, you need to spend it wisely, and it can be difficult to know how. Should you hire more people? Find a new office? Redesign your product entirely?
What you need to do post-funding
While each round has its own agenda of challenges, there are some basics to consider after securing your first round. From the more complicated necessities like your 409a valuation to the right way to find a proper office space for your growing company, you can find out all the fundamental things you need to tackle with DocSend and Pilot’s post-funding checklist. The checklist goes over everything you need to cross off your list and specifics on how to go about it, with recommendations of some of the best service providers for startups. Read on for a few main takeaways from the list.
14 things to do after you close fundingDownload the checklist
Know what you should leave up to the pros
It’s really important to keep proper financial records for your startup, but it can get really complicated and is inherently time-consuming. Find a bookkeeping service that does it all for you. You’ll be able to keep your focus on your business while saving yourself a lot of time and headaches. The same is actually true for finding an office space. Using a broker could actually end up saving you some money in the long run.
Remember—you’re an employee too
When it comes to healthcare and benefits, do your best not to skimp. Provide your employees with the best care that you can, keeping in mind that you should provide policies and plans you’re happy with as well. When choosing benefits packages for your employees, it’s a good time to reflect on your values in terms of what you’ll provide for them going forward.
Cross your t’s and dot your i’s
There are some things that are really important to get right from the outset, such as your 409a valuation, legal counsel, and company insurance. You must get your 409a valuation done before you distribute any stock grants. You’ve likely already obtained legal counsel if you’ve secured funding—but if you haven’t, now is absolutely the time. You can consider different levels of counsel, but there are some things in the fundraising process that you definitely shouldn’t negotiate on your own. And while company insurance isn’t particularly complicated, there are certain types you should definitely have in place.
For deeper insights on the post-funding period and more, download DocSend and Pilot’s 14 things to do after you close funding checklist.