Congratulations! After months (or years) of endlessly long days, of microwave dinners, of ups and downs and waking up to realize you spent the night sleeping in front of your computer… you’ve done it! You scored your first round of funding!
Entrepreneurs often talk about how to get funded, but rarely about what to do once you’ve got cash in the bank. Unfortunately, spending that cash the wrong way happens all too often, and it is a dangerous possibility that could quickly leave you back at square one. To avoid that path and ensure that you’re spending your money where it counts, you need to focus on growing your team, fueling up your marketing efforts, defining and reaching your product goals, getting another round of funding, and more.
Here are six areas where you should invest your first round of funding in order to make a real difference to your bottom line:
1. Hire quality talent
The team you build is what’s going to carry your business through to victory—and now’s the time to build a quality team of talented professionals who care as much about the company’s success as you do.
Who are your most crucial hires? Focus first on an in-house CFO or accountant, as well as the employees who are most strategically important to growing your business. You now need to handle your finances with more care than ever, and an experienced accountant will be able to make sure you’re on top of your tax responsibilities in addition to helping you prepare for the future, thereby minimizing the chances for upsetting surprises.
In addition to the C-level employees who will be able to take some of your responsibilities off your shoulders (which is a good thing!), you’ll need high-quality sales and marketing people who will be excited about finding and implementing new ideas for generating leads and getting new customers. You should also look for developers, programmers or product managers who can help take your offering to the next level.
2. Rent larger office space and more equipment for your growing team
Now that you’ll have more people working with you, you’ll need to accommodate them with sufficient office space and supplies including phones, computers and the applications/software they’ll need to do their jobs.
Alternatively, you may choose to have a remote team, which has its own unique benefits. For starters, a remote team saves you from the overhead related to building and maintaining a larger office. It also offers both you and your employees a number of conveniences (like more extended working hours across different time zones) that you can’t obtain with a team in one location.
3. Invest in measureable marketing and PR efforts
Focus a portion of your funding on measurable marketing and PR efforts that will support your company’s growth. These efforts can include everything from increasing traffic to your website, to developing methods for capturing and nurturing leads, to creating and maintaining a social media presence. By investing your funding in marketing activities with results that you can measure, analyze and optimize, you will be better able to develop programs that generate quantifiable value for your company. You can then confidently report back to your investors with hard data showing how efficiently the funding is being allocated.
To do marketing and PR right, you’ll need a team of specialists who can prepare and execute an online marketing strategy for you. Unless you have deep familiarity with marketing, don’t try to take this work on yourself, as you’ll likely end up wasting precious time. Keep in mind that finding, hiring and training marketing professionals can take time, and might be something you’d consider outsourcing to freelancers or an experienced and proven marketing or PR agency.
4. Invest in professional branding and design
Today’s consumers are professionals at spotting poor design. They’re also going to notice if your branding and design are inconsistent across your various web assets. If they are outdated, unclear and inconsistent, chances are you’re going to lose a lot of potential business.
Be sure to create and adhere to strict branding guidelines, style guide and messaging across all channels – your website, landing pages, ads, social media, email, etc. You should also make sure that your website is easily navigated on mobile devices.
As with marketing talent, you don’t necessarily need to find an in-house designer. Whether you hire a designer or work with an agency, make sure you’ve created a design that truly communicates your company’s offering, personality and values.
Frontify is a great tool for creating your style guide. They offer a way for you to either use your own design elements or template style guides to work with. Plus, it is free for up to 3 users.
5. Invest in improving your product and making it scalable
Chances are you wouldn’t have gotten funding in the first place if your investors didn’t think your product was scalable. Why? Because most investors are interested in startups that have the potential to multiply their revenues with minimal added costs.
Focus on your own product’s growth opportunities, and use the cash you’re now equipped with to turn those plans into reality. Work on taking your MVP to the next level by developing new features, functionality, versions and offering Beta access to a group of users to test and provide feedback.
Make sure your product is strong, sleek, and offers the value you promise to deliver. You can have the most beautiful website and the most effective sales and marketing people, but if your product isn’t intuitive and user-friendly, and if it doesn’t grow to answer the evolving needs and demands of your target audience, then it will all be for naught.
6. Consider contracting a business coach or mentor
Research by the global mentorship network Endeavor has shown that company founders who are mentored by successful entrepreneurs are three times more likely to be top performers than their non-mentored counterparts. It’s easy to understand why: if you can build strong personal connections to and learn from people who have “been there, done that,” you can gain the knowledge it took them years to obtain and apply it to your own business early on.
By working with a mentor, not only do you enjoy the opportunity to learn from their experiences, but you’ll find that you’re more confident about the decisions you make and that you can make them quicker. Prove to your investors that they were right about your long-term growth potential by teaming up with a mentor who can help you define and reach a broader vision. True, this may cost a pretty penny, but you might consider a part-equity agreement to help keep costs down.
You could also consider selecting board members who have entrepreneurial experience and lots of business connections who can also act as mentors. Not only would they be able to help you with internal business questions and guidance, but they can also help with your company’s networking activities.
You might also check professional networks in your area for free mentoring opportunities. For example, some Google campuses around the globe regularly host free mentoring sessions where entrepreneurs can engage with industry experts.
Make sure your startup continues to grow in a healthy and strategic way by focusing your investment funding on these 6 things, which will make a huge fundamental difference.
Do you want more advice on how to take your startup to the next level and get your next round of investment funding? Download our free infographic, "10 Steps to Prepare Your Startup for Series B Funding".