Visible Blog

Throughout the fundraising process countless documents and data points are being shared. Different investors will have different preferences. Below, we share our favorite posts for sharing documents, decks, and data while fundraising Our Favorite Posts for Sharing Documents, Decks, and Data What Should You Send a VC Before Your Meeting? — Mark Suster Mark Suster, Managing Director at Upfront Ventures, offers his take on what founders should send before, during, and after a meeting with investors. 6 Things Founders Should Expect During Venture Due Diligence — Alex Iskold Alex Iskold, Managing Partner at 2048 Ventures, shares 6 things that investors will expect during the due diligence process and how you should properly share them over. 16 Startups Metrics — Andreessen Horowitz The team at Andresseen Horowitz explain what 16 metrics they find to be most valuable from their portfolio and what they mean for investors. The Startup Metrics Potential Investors Want to See On the Founders Forward Blog we share the general metrics potential investors will look into during a fundraise. Well they may vary when it comes to industry investors will often want to see growth, a growing market, and strong unit economics. How to Make a Compelling Pitch Deck — Jean de la Rochebrochard Jean de la Rochebrochard, Partner at Kima Ventures, studies successful pitch decks and lays out the keys to creating and sharing a compelling pitch deck.

Why Product-Led Growth? According to OpenView Labs, Product-Led Growth is “a go-to-market strategy where the product is central to how these companies acquire, convert, expand and retain users. This allows companies to forgo spending large sums on traditional marketing and sales activities. Instead, they rely on the products themselves to supply a pipeline of satisfied users to convert to paying customers.” Implementing a Product-Led Growth strategy offers companies unique financial and operating advantages that allow quick scalability, economic efficiency, and ultimately more efficient growth. Dropbox is a great example of a company that does this well. They generate double the revenue of their closest competitor, but spend a lower share of that revenue on sales and marketing. This can largely be attributed to their product-led growth strategy. At Visible, we’ve centered our growth around our product for a few years now and were able to implement the strategy on our business side by using Product Qualified Leads. What are Product Qualified Leads? If you’ve built a great product, chances are your culture—knowingly or not—is centered around putting the product first. As Liz Cain of OpenView puts it, “You live to serve your customer, to make a product that delights and excites… You don’t want your company aligned around a boiler room, ‘always be closing’ sales culture.” At Visible, we started to implement a product-led approach with our sales and marketing efforts by using Product Qualified Leads. Product Qualified Leads are prospects using some version of your current product who take some sort of qualifying action. Typically this happens during a trial or freemium experience. The exact definition of a PQL will vary greatly from product to product. For example, Slack knows a customer is more likely to close when they hit 2,000+ messages. We have our own product actions we keep our eye on. Outside of standard demographic and sales information, we use a point system to weigh the following product actions: Connect a data source Create a chart Invite other users Create an Update We know once someone on a trial sends an Update, they are more likely to become a paying customer, so we weigh that above all other actions. This leads us to take an “Update-centered” approach to our product and messaging during a user trial. Once someone on a trial has reached a point threshold based on our product criteria, we’ll change their status and try to move them toward conversion. For example, if they’ve connected a data source and created a chart, how do we get them to distribute that chart using Updates? The PQL framework has continued to be fluid for us since we implemented it roughly 2 years ago. Testing and iterating the approach is crucial and something we continue to do. Not only has a PQL approach led to more efficient growth, but also to improvements in the product, sales, marketing, and customer success aspects of our business. While product-led growth might not be for every business, there are learnings that can translate across all businesses. Using PQLs is a great way to start and evaluate what your users and customers truly value about your product. Ready to learn more about product-led growth? Check out the 2018 SaaS Expansion Benchmarks report we created in partnership with OpenView Labs.

Much has been written about the benefits of organizational transparency, but some startup founders are still slow to adopt it in their businesses. It is awfully hard for an employee, investor, or advisor to add value to a business when they’re left in the dark. At the same time, however, it is vital to be thoughtful when deciding which information to share. Transparency can be a double-edged sword. Too much transparency can lead to confusion, whereas too little can lead to distrust and a failure to align your team and stakeholders. Outside of the value-add from your current stakeholders transparency can be a catalyst for building trust and attracting top capital, talent, and customers. Here are 3 things to keep in mind when embracing transparency at your company. Sharing without context is dangerous Data without context is dangerous. While it may be easy to say, “I shared a dashboard with every in the company, I’m being transparent!”, that can lead to confusion, questions, and more answers. Sharing a revenue dashboard without including your monthly burn or spending does not provide much context for anyone consuming the data. Des Traynor, the CEO and founder of Intercom, claims that mastering transparency has been one of the toughest lessons he has had to learn as a CEO. As Des puts it, “Transparency is some sort of spectrum. I think one thing that people over-engineer for is ‘let’s let everyone have access to absolutely everything and somehow magically assume that you’re going to understand it all on how we think about everything all the time.’ That’s just not how it works, unfortunately.” Keep it consistent One of the key benefits of being transparent is building trust. One of the easiest ways to destroy this benefit is by constantly changing up or hiding information. If you’ve been sharing certain financial metrics, then unexpectedly stop sharing the same data or change the context it is in, it will create questions and can sow distrust in your stakeholders.  Joel Gascoigne, the CEO of Buffer, has had to deal with the burdens of sharing the negatives throughout the process. Often regarded as one of the most transparent companies, Buffer went through a round of layoffs that were a surprise to most of the organization. As Joel puts it, “I don’t feel that we fully lived up to our value of transparency, specifically to share early in order to avoid a big revelation later.” The Range of Transparency Transparency is not a “one size fits all” approach. In the workplace, people will tell you transparency means different things to different companies. At the end of the day, transparency is about arming your stakeholders with the information they need to add the most value to your business. On one end of the spectrum, you have companies like Buffer who is often considered one of the first to embrace radical transparency. Joel Gascoigne, CEO of Buffer, shares everything from a live feed of new MRR to salaries for their employees. Other companies, like Structural, share a weekly note from the CEO. The “Friday Note” is a quick way to keep everyone in the loop and rallied behind the same vision. It is a simple way to engage employees but avoid any of the confusion that may come with sharing granular financials and strategic decisions. No matter how transparency takes shape at your company, it is vital to arm your stakeholders with the information they need to add value to your business. Create a plan, stick to it, and give everyone the context they need to succeed. Interested in learning more? Check out our other resources for embracing a transparent culture at the Founders Forward Blog.

The Traditional “Fundraising Funnel” In the past, we’ve discussed how one can easily draw parallels between fundraising and a traditional sales & marketing funnel. Just as a sales & marketing funnel can take different forms, so can your fundraising funnel. Generally, we’ve laid out the “fundraising funnel” in 3 simple steps: Attracting and adding investors (leads) to your top of the funnel on a regular basis. Nurturing and moving those investors through the funnel with the goal of adding them as investors (customers) or engaging them for a future round. Building strong relations with your investors to convert them to promoters, evangelists, or future funders (customer success). Since “Account Based Marketing” has taken over marketing blogs, events, and discussions we’ve laid out how to apply ABM to your fundraising efforts. What is Account Based Marketing Account Based Marketing, according to Marketo, is “An alternative B2B strategy that concentrates sales and marketing resources on a clearly defined set of target accounts within a market and employs personalized campaigns designed to resonate with each account.” In the sales & marketing world, implementing ABM tends to be a costly endeavor, but there are also countless benefits: clear ROI, focus on key accounts, personal and optimized, sales alignment. Terminus, a leader in ABM software and originators of #FlipMyFunnel, use ABM to flip a traditional funnel on its head like so: Terminus defines the 4 stages of the flipped funnel below: Identify – Start with the best-fit. Generally guided by an ICP; Ideal Customer Profile. Expand – Focus on people in the same roles. Find contacts within the companies that you’ll engage during the sales & marketing process. Engage – Right content, right channel. Use the most engaging and targeted form of content to target your contacts and accounts. Advocate – Turn customers into fans. Your marketing team should do everything in its power to ensure customer success by retaining accounts and keeping them happy. How to Apply it for #AccountBasedFundraising We were fortunate enough to pick Sangram Vajre’s, Chief Evangelist at Terminus, mind about using a flipped funnel approach to fundraising. When asked how a founder might apply ABM to fundraising, Sangram said, “The flip my funnel approach can be applied so many more ways than an account-based marketing approach. From a fundraising perspective, lets say your a B2B company in the marketing space. Start by looking at the top 10 companies that have raised money in the last 12 months and who they have raised from and start building your list from here. By starting with a priority list of targeted VCs you won’t have to explain the market and field unqualified inbound interest. As long as you know who your target audience it will really help you solidify where to spend your time.” As a founder himself, Sangram used the flipped funnel approach when fundraising. At Terminus, Sangram and the team had a list of over 100 investors and were flooded with inbound interest from angels and other firms. By limiting the list to ~10 investors they were able to do in-depth research and make sure their visions aligned when they set out to fundraise. Finding the right VC firm can be an integral part of your company’s success and can be started by defining your values and narrowing your list of investors by their visions, experience, and portfolio. In the words of Sangram, “Finding a VC firm is almost like finding a co-founder. Any due diligence that you would do to add a co-founder you should when adding a VC partner.” Identify Start your fundraising process by identifying key “accounts” (read: investors) that are strategic fits for you business. Keep in mind things like location, industry focus, stage focus, other investments, and deal velocity. We suggest developing an “Ideal Investor Profile” to define what investors you’ll want to target during the fundraising process. Expand Find the exact partner or decisionmaker you’ll want to communicate with during your fundraise. Larger firms often have different partners that handle different stages, industries, etc. If there is an advocate and thought leader for your industry within a firm, make sure to add them to your list as well. Unlike the sales & marketing “expand” stage, you’ll likely be able to expand externally from the investment firm as well. Firms decide to pass for a number of reasons, but they also offer a large network. They may be able to make intros to other investors in a similar position, and those investors may be ready to pull the trigger on an investment. Engage Dripping content to your targeted potential investors during the fundraise process is critical. Even if you’re not trying to actively close capital, you should constantly be nurturing and engaging potential investors. We have found it best to send out a short update on the state of the business and industry on a monthly basis. Share a promising metric or two showing strong growth in the business and highlight any significant wins/improvements. Advocate Once you’ve landed an investor, it is vital to form a strong relationship and turn them into your company’s biggest champion. Just as you use customer success to keep your customers happy, you should be intentional about building relationships with your investors and keep them happy, too. Your investors should be your company’s biggest advocate, but that will only be true if you’re top-of-mind for them. Make sure that relationship is strong, and good things will follow. By turning your current investors into advocates you’ll be able to call on them to help fill the top of your funnel with qualified investors from their network. Or better yet, they’re the first people you can go to when you need more capital in your business. There is no definitively correct way to run a fundraising process, so flipping the traditional funnel on its head and using an “account based” approach can be an interesting strategy. If you’re ready to start engaging potential investors and turning them into advocates, sign up for a free trial of Visible here.

With Q3 coming to an end, it is easy to lose focus on your board and become tangled up closing deals, hitting numbers, and pushing product updates. While you’re likely weeks away from your quarterly board meeting, it is never too early to have a game plan in place. Preparing for your board meeting now will take some stress off your shoulders as you make the final push to finish the quarter strong. If planned appropriately, board meetings can be a powerful resource for both you and your investors to discuss important topics and keep your business on track for a strong fourth quarter and beyond. We’ve scoured our own notes, blog posts, and other resources to compile our favorite quotes, lessons, and tips for running a successful board meeting: Preparing for the Board Meeting You’ll find that almost every investor will point to preparation being the biggest factor in running a successful board meeting. Different investors will point to different materials, metrics, and discussion points to share in advance, but it ultimately boils down to sharing relevant data and information so your meeting can be a discussion as opposed to an “update session.” “The board deck should be sent out three or four days in advance and it should include all the important financial and operational results for the Board to consume in advance of the meeting. It should also tee up the big discussion items so that the Board can start to think about them in advance of the meeting. The Board does not need to go through a line by line review of the financial and operational results in the meeting.” – Fred Wilson, Union Square Ventures While sharing your board deck and financials in advance are important, make sure it is the correct and relevant information: “It’s really annoying to receive a monthly update or attend a board meeting and realize that the set of information and/or data isn’t relevant, accurate and mastered. No discussions should start before the entrepreneurs fixes this. It is just fruitless otherwise.” – Jean de la Brochechard, Kima Ventures Simply sending over your board packet will not be enough either. It is on you to follow-up with the board members and make sure they’ve reviewed the info and will be ready to discuss come your board meeting. Some investors suggest setting aside 1-on-1 meetings to get their advice on setting discussion points as well: “Soliciting your board member’s input on your agenda is important. But it is also really helpful to have these “one on ones” in advance of the meeting so you can update each board member on the things that they are concerned about. The board members will arrive at the meeting more prepared, they will be more comfortable, and they will also be able to help more.” – Fred Wilson, Union Square Ventures Related Resource: How to Create a Board Deck (with Template) Running the Board Meeting If you’ve properly prepared for your meeting, there should be minimal stress when it comes time to run it. It can be an incredibly valuable discussion for determining the next steps for your business and burying any issues that may be on your mind. There are endless “best practices” for running your meeting, but we have found the one below by Mark Suster to be one of the most practical: “With the limited time you have together as a group, I’d want the following ratio of time spent Provide information / context (15%) Discuss, debate and potentially reach decisions on the most important topics (70%) Deal with company admin: 409a valuations, approve stock options, vote on key measures (15%)” As a founder you’ll know the finer details of your business infinitely better than your board, so your best chances at getting the most from your board are leveraging their “helicopter view” and experience to help break down strategic decisions. “A board is not a pitch session, you don’t have to brag or sell or whatever you think will make your presentation look great. It must be an honest and clear view of the past, present and targeted future. If things are ugly, show the blood, if things are running smoothly, address strategic matters. Do not make an appearance, do not run a show, be a CEO.” – Jean de la Brochechard, Kima Ventures Your investors are already invested in your business and its success. Share what is not working well, why certain metrics might be lagging, and how they can help. Investors have likely seen other portfolio companies in the same position and can draw on personal experience to help you through “the struggle.” As John Vrionis of Unusual VC puts it; “We are all in the boat together and the only way we can help is if we know what is working and what isn’t. Intellectual honesty and transparency about the facts of our reality greatly improve our chances of success.” Following up and Gathering Feedback Once your meeting is completed the work is not done. Chances are you won’t come to conclusions for all of your issues and its important to stay on top of the discussion and keep the board engaged. There are likely other portfolio companies fighting for your investors time to hash out plans and details from their meeting too. Stay in front of your board by sending a quick recap and personalized emails to any individuals that you need help from. “People go to so many board meetings and are so busy these days that they seldom remember what was discussed / agreed. This is coupled with the fact that lawyers now routinely advise you not to put any of the substantive discussion points in the legal meeting minutes. So you should produce the set of notes that are unofficial but cover the real valuable stuff you talked about.” – Mark Suster, Upfront Ventures Following up with a quick email and recap is a good place to start. As Zach Shulman of Cayuga Ventures puts it; “The goal of the post-board meeting email is to make sure that everyone is on the same page. This is really helpful for the entire board team, including of course the CEO…The post-board meeting email should also appropriately address any issues surfaced in the final executive session as well. This is a way of reporting back to the CEO. Sometimes it is not appropriate to address all issues in this group email, particularly on points that are critical of the CEO and thus often handled one on one.” Different VCs will likely give you different feedback when it comes to structuring and running your board meeting. At the end of the day, a successful board meeting comes down to being transparent and sharing the proper information in advance. To help take a load off your shoulders, check out our board meeting packet template to keep your board in the loop before your Q3 meeting.

Our Improved Investor Update Editor We’re thrilled to announce two new design & UX improvements to the core Visible experience. Starting today, Updates can be addressed to respective recipients. These are commonly referred to as “merge tags”, and you can use them to personalize an Update with a recipient’s first name, last name and email. Simply highlight the text you want to personalize and click the “tag” icon and choose the field you want to include. We will populate the fields based on the names set in your Contact Lists & Users section. If a field happens to be blank, you can include a fallback value. Merge tags are being powered by an all new text editor and writing experience! In addition to giving us a great platform for new features, the overall experience should be much more pleasant. This new text editor is turned on by default for all new users; current customers can email beta@visible.vc and we will enable this for you prior to the full migration. We have also changed the typeface used across the application. Instead of seeing the Whitney font which we’ve been using in our application for over 2 years, you’ll now see your default system font. (On Mac and iPhone, you’ll see the San Francisco typeface, on Windows Vista it will be Segoe UI, and on Android you’ll now see Roboto). This font will likely be familiar to you already as it’s currently used natively by your respective OS and more and more frequently on many major web applications. This change will create a faster and more cohesive experience not only within the Visible application, but also in Update emails that are published via Visible. Please send any and all feedback our way! Up & to the right, – Ciarán & The Visible Team

You just raised a round. You have the check in hand. Hiring and product updates are moving along. Now what? While bringing on a new set of investors is exciting for your business, there are critical steps to “onboarding” new investors to ensure all parties are getting the most of the new partnership. Ideally, you selected your new investors strategically and did your own due diligence through the fundraising process. As Faisal Hoque puts it, “Funding can actually kill your venture, especially when there is a major disconnect between you and your investor”. Even if you’ve chosen the right funders, it is vital to your investor relations to establish a communication strategy, build a data distribution system, and set expectations and goals. Develop a roadmap & expectations Hopefully, expectations and goals were set during the fundraising process from both sides of the table. Your expectation will likely evolve over time as your relationships and your company continue to grow. However, it is still vital to lay out any expectations, by both parties, once the check is signed. Bringing on a new VC means bringing on a new business partner. It is essential to have a clearly communicated set of goals that your investors are bought in on. Having stakeholders with different ambitions and expectations can lead to underutilizing their time, network, and experience. Clement Vouillon of Point Nine Capital offers a good starting point in the questions below: “There is no right or wrong here, but by thinking about what you need, it will be easier for you and your investors to get aligned: Do you need a “hands-on” type of relationship? Or you want to keep it very light? Are you aware of “weaknesses” in your founding team that could be filled by your investors knowledge (education) or network (hiring) Do you need industry specific knowledge or specific value add that your investors offer?” Define Metrics For an early stage company, you will most likely need to set what metrics you are tracking and distributing. The most important thing here is sharing your metrics/data on a recurring basis and allowing your investors to “connect the dots.” What metrics you are tracking will depend on your business, market, vertical, etc. If you’re looking for a place to start, we suggest the “16 Startup Metrics” from a16z and “How to Steal the Right Growth Metrics for Your Startup.” “Ultimately, though, good metrics aren’t about raising money from VCs — they’re about running the business in a way where founders know how and why certain things are working (or not) … and can address or adjust accordingly.” – the team at a16z Data Distribution and Communication Organization is key when it comes to managing your investor relations. After you raise your round, one of the first questions you should ask is, “how am I going to communicate and interact with my investors?”. While building a rapport is ultimately dictated by the stakeholders involved, we generally find the following structure to be most popular and work for many founders and VCs: Board Meetings Chances are, this will be the main line of communication you have with your investors and board members. There are countless resources, templates, and guidelines for running a board meeting but we suggest checking out “How to Make Board Meetings Suck Less” if you’re looking for a place to start. Monthly Updates “The most effective CEOs that I’ve observed send regular, short, board update emails every few weeks or monthly just to give the board a sense of what is going on. Of course it’s not required and many don’t do it. But I find that the more informed your board is and the more you’re staying on their radar screen the more effective they’ll be for you.” – Mark Suster While the internet is flooded with content and resources for “investor reports” many founders still don’t do it. To make the most of your new investors and board members, turn your monthly updates into a habit and slowly tailor the format, content, and frequency to the likings of all parties. Check out this example of a monthly report to get the ball rolling. Conference Calls These are best used to supplement a monthly email or update. Instead of exchanging emails back and forth, quickly jump on a call to go over financials, product updates, roadmap, etc. Be sure to set a clear agenda so you don’t lose control over your meeting. One-on-one Calls/Meetings All of your investors will bring a different set of skills and resources to the table. If you have a specific asks for hiring, intros, strategy, etc. don’t be afraid to tap into your investor’s network and hop on a one-on-one call. An engaged investor can be key to taking your business to the next level. By developing a cadence with your investors you can easily tap into their network to help with hiring, fundraising, and closing deals. Want to start your investor relations off on the right foot? Sign-up for a free Visible trial here to make the most of your new partnership. Search for your next investor with Visible Connect:

Investors are more than a source of capital. They have experience, advice, and networks you can leverage. It’s normal to feel intimidated by the people who just handed over a check, but it is vital for both parties that you tap into their knowledge to build a strong business. As soon as you take on capital, you are expected to work toward generating returns for your investors. On the flip side, an engaged investor can add value to your business in order to help generate those returns. That said, you are likely not their only investment, so you need to show them you value their time by only asking important, specific questions. When asked about the most important section of his investor updates, R.J. Talyor, Founder & CEO of Pattern89, said “In the Visible Update template I use, there’s a specific section named ‘Where I need help,’ where I list the 2-3 places that Quantifi needs new thought/idea/feedback on what we might do next. I always get responses from this section—introductions to potential customers, books/resources I should consider, or a quick phone call to talk through the area I’ve outlined.” So what’s appropriate to ask your investors? And how do you do it? You’ll find most asks go back to their experience and network. How to Ask Investors to Help With Closing Deals At its core, building a VC-backed business is about generating revenue. The biggest value add for a business? Closing more deals. Your investors are in the “deal-making” business and likely have a knack for closing deals. Use your investors professional networks to make an intro, set a meeting, or bring in the necessary backup to close a large deal. If you see your investor has a specific connection you’re looking for, don’t beat around the bush. Ask the investor for the exact intro you’re looking for and tell them how they can be of most value. Don’t make the mistake of asking for help on a deal once it’s too late. As Paul Arnold from Switch Ventures, puts it, “A surprising number of founders only want to update investors once they’ve closed deals. They worry that they’ll look bad or weak or behind if they share leads that don’t convert. This is a bad approach. Your investors have the experience to know that not all leads will end in a deal”. How to Ask Investors to Help With Hiring Attracting talent is one of—if not the—most important resources businesses compete for on a daily basis. Using your investor network is a great place to start when searching for a new role. While they are often best suited to help fill senior positions, be sure to ask your investors for help when recruiting for any open position. Be sure to specific as possible about the role, as well as items like the experience level required, and target compensation,to make it low-maintenance for your investors. If you have a larger firm backing you, theres a chance they have an internal talent pool from which to pull qualified candidates. How to Ask Investors to Help with Fundraising Investors know other investors. Even if your investors are not interested in committing follow-on capital, they may be able to introduce you to other investors they know. Just as you should with making hiring and deal ask be sure to be as specific as possible, even giving your investors the name of the firm and partner you’d like to meet when possible. If you’re struggling to find specific investors, it is okay to ask if they know anyone in their network that might be a good fit. Whether asking for help to close deals, hire, or fundraise, your best bet when going to investors for help is to communicate clearly and often. Speaking up only when you need help isn’t likely to get you the results you’re looking for. Remember to reverse the relationship, too—help promote an event, send deal flow, and help other companies in your investors’ portfolios. Lastly, don’t forget to publicly thank your investors when they go above and beyond. Leveraging your investors is low-hanging fruit for moving the needle. Don’t leave your investors in the dark; send regular updates so you can make the most of your partnership.

In the words of AngelList Founder Naval Ravikant, “It’s never been easier to start a company. It’s never been harder to build one”. The competition for capital and talent is greater than ever. On top of building a great business, obtaining capital to grow your business is tough enough. From countless cold emails, meetings, and rejections fundraising is a long, often daunting, task. While most founders don’t have the fortune to 100% focus on fundraising, creating a simple and efficient process can be the difference between a successful or failed raise. We’ve laid out 3 tips below to help simplify the fundraising process so you can stay focused on your day-to-day: Do Your Homework Before Reaching Out Before you send an email to a perspective investor make sure you’ve done your research. There is no reason to spend time on an email or sitting in a meeting with an investor and find out after the fact that they’re not a good fit. Mark Suster, Managing Partner at Upfront Ventures, suggest building a list of 40 qualified investors before firing off your first email. Use tools like Crunchbase and AngelList to easily put together a list of qualified investors based on their location, industry focus, stage focus, portfolio companies, and deal velocity. Track Your Interactions During the fundraising process theres a good chance you’ll talk to 100+ different investors. Its easy for conversations and notes to get lost in the shuffle. Just as you would jot down notes and the information for a sales process in your CRM the same should be said while fundraising. We suggest creating a simple Google Sheet tracking the investors you’ve spoken with, information shared, and relevant notes/recordings/etc. If necessary, share the sheet with your co-founders to gage the team’s sentiment towards different investors and meetings. This will come in handy when its time to fundraise down the road and need to pull on previous conversations. Go to Existing Funders First If you have already have investors you will want to start here. If you’ve kept your investors in the loop, a request for a meeting should be an easy string to pull. As Jason Calacanis puts it, “There is another really awesome reason to keep investors updated: they didn’t give you all of their money — they have more! They want to give you more! If you keep your investors engaged with honest updates they will reward you by participating in future rounds”. If for whatever reason your investors are not going to fund a future round they will be able to make intros to other, already qualified, investors as well.

From working with hundreds of founders we often hear, “what metrics and data should I be sharing with potential investors?” With droves of content laying out what you should and should not share before an investor meeting it can often complicate the process. To some investors, a “data room” and certain metrics are vital but the opposite can be said for others. Despite the difference from investor to investor there are a few traits most will keep their eye on during the fundraising process: Market Data Don’t reinvent the wheel. When you’re pursuing a specific industry or market, there are generally benchmark numbers and stats standardized across the industry. Share these projections, benchmarks, and stats with prospective investors and paint a picture of the potential market and how you will use their capital to penetrate the market. If you’re targeting the right investors they’ll likely have experience in the field and should already have a deep understanding and belief in the market. Growth To get your foot in the door, you’ll need to show some kind of current growth and traction or the potential for growth. This more often than not comes in the plan of a business/financial model and historical data (which often ties into the market info above). At the end of the day, an investors job is to generate returns on their investment. Show them a strong financial model that creates growth for the business and returns for them and their LPs. Some investors and founders make the case that you should be careful in how granular you get with the model you’re sharing as it can often lead to unnecessary questions/confusion. As Tommaso Di Bartolo wrote for Startup Grind, “Using excessive metrics can lead to unnecessary discussions that don’t matter at an early stage”. Related Resource: What Should be in an Investor Data Room? Unit Economics & Margins Margins on your product is a large part of the path to profit and returns for your investors. Margins are easily benchmarked by industry. Investors generally have a % they are looking for in the back of their mind. For example, a SaaS business should have no less than 60 or 70% gross margins. As Tim Anglade of Scale Venture Partners puts it, “If you’re really not able to capture a margin on your current pricing now, it’s unlikely to change in the future, right? And you’ve got to stay within a certain benchmark to have a good business”. Customers Your customers are your business. Clearly showing potential investors that you can attract, convert, retain, and engage your customers is vital. Being able to show proof of repeat and loyal customers will help ease the mind of investors. This can come in the form of customer satisfaction surveys, net promoter score, and retention rates. Related Resource: A Guide to Building Successful OKRs for Startups

A guide to avoid the common mistakes and capitalize on opportunities with your new reps written by Brock Benefiel. Brock is a Digital Marketing Consultant, Tech Writer, and Author of the upcoming book Flyover Startups. Because they are often the least experienced group working in a tech company (or working at all), SDRs are some of the hardest employees to train. And in the short-term, they are some of the least valuable employees to train and will only be a cost burden on your company in the early days. “The average new sales rep at a SaaS company takes 5.3 months to reach full productivity,” Steli Efti writes. “That’s almost half a year where your business is actually losing money per rep.” Yikes, right? But unless you’re entirely new to sales development, you know SDRs work as a long-term investment if given the right environment and proper management. If you can afford the necessary months to pass before they become meeting-setting machines, you’ll eventually develop a crop of SDRs that kickstart huge deals and fill a much-needed talent pipeline that your company will rely on for future hires. So will the amount of onboarding and ongoing training still seem inefficient and sometimes a waste? Absolutely. But it will also pay off big in the end. Its importance is critical. Remember, it’ll always be more costly to have high SDRs churn rates than it will be to allow time for SDRs to train. If you train well, you’ll have set the SDR on the right track and develop a knowledge base that can be returned to the next crop of reps and lessen the burden on your executive team to train in the future. Proper onboarding will reduce the time to full productivity. It’s the best way to do it. But too often onboarding mistakes are made and training opportunities are squandered. Don’t fall victim to these silly slip ups. Examine these top errors founders make when bringing on new reps instead and learn how to avoid all of it with effective training strategies: #1 – You push them too quickly into the deep end This is the easiest mistake to make. You want to get your SDRs calling and emailing quickly so they get professional experience but there is just so much they need to know before they can effectively prospect. Here is just a sample of what they need from you in order to better understand your customer: Customer profiles – Who are you selling to in your total addressable market (TAM)? How do these companies specifically benefit from your product offering? Customer personas – Who are your SDRs going to reach out to? What is their job title and responsibility and how does this product specifically make their life easier and solve a big issue they face? Influencer profiles – Who else is important at the company? Who are the additional stakeholders they should consider and what might their role be in the buying process? Here is just a sample of what they need from you in order to better understand your company: Team structure – How is sales broken down? Are SDRs reporting to marketing or sales? Who will they need to report to and who else will they work with? Sales strategy – Are you inside or outside sales company? Are accounts owned by geography or by individual companies? Key metrics – What are the KPIs SDRs will have to hit? Then, you’ll want them to understand the market as well. Be able to answer these questions: Who are your competitors? How is their product offering different? What should be their answer when a prospect asks “why should we pick you over X company?” After that, you will want to demo your product to each SDR and allow them to use it. You also want your new hires to sit down with an individual from each department – engineers, product managers, marketers, salespeople, etc. – to understand the role each play in the company, how everyone plays a role in software development and sales and how each find individual value in your product offering. These conversations provide a deeper understanding of how the product works, why its valued and creates a forum for SDRs to have their first long-form discussions about the company and make them feel more comfortable once they must have these conversations with prospects. Let them first understand what it’s like to be sold and allow them to experience the product education. Have them mark the questions they have in the process so they know to anticipate the same inquiries when they’re the ones who are explaining the product. If you’re not at least providing them this baseline understanding of your company, their customers and their role, you can’t expect them to set meetings. Push them in without this initial training and they will inevitably sink. #2 – You’re going to give them too much information No matter how good you are at training employees, you are bound to overload your new SDR hires with information. Expect them to retain just a fraction of what they’re initially taught. Instead of hoping they’ll be able to consume the firehose of information, rely on ongoing training to make up for what they’ll inevitably miss. “Create a training manual that’s part sales script, part objection management document,” Steli Efti writes. “Your sales training manual allows you to build a more scalable strategy for onboarding new sales hires, by getting everyone to speak the same language from day one.” There is also only so much information you want SDRs to learn before they actually deal with customers and experience the real nuances of the role. In the ramp up period to full efficiency, you want a back and forth to occur between the ongoing education SDRs need and the real life experience they require to get a feel for the customer communication. Your reference materials will SDRs something to study when they encounter more specific obstacles with potential customers. According to Efti, here are some aspects you want to include: 10-15 customer FAQs 10-15 common objections Short answers to each question or objection Your SDRs should study the questions and answers. You should test them on it. Find out what concepts are more difficult to comprehend and go over it again. The more repetition in answering the same questions the shorter the response time will be. The faster the response time the more natural a rep will seem on the phone. The more natural they feel the more they will listen and begin to discover how to address the unique concerns of a customer and set meetings. If instead you overload them with lectures and manuals that don’t allow them actual practice, you will paralyze your SDRs once they’re tested. Use these proper strategies and you will actually provide experience. #3 – You don’t put the same amount of resources into onboarding that you do hiring It’s easy to pay lip service to the importance of onboarding, make an onboarding hire and assume it will work as an isolated activity as part of the new employee process. Check yourself instead: are you devoting the same amount of employees, time and money toward onboarding as you are hiring? Is training and developing talent as crucial as identifying it and reeling it in? It needs to be. Think of it this way: you wouldn’t devote all your resources to SDRs and AEs to find good clients only to underdeliver on customer success and watch an unnecessary and expensive client churn. You wouldn’t avoid upselling a client that needs a better offering, so why would you stop from developing a mid-level performer into achieving more? If you find yourself instead with a balance of how SDR talent is acquired and developed, you’ll earn greater retention and see faster results. Other articles Brock has written about SDRs: Why SDRs fail How to set up a system for SDR success The importance of SDRs

Last week, we wrote about the parallels between a traditional sales & marketing process to a fundraising process. This week we’ll take a look at going from prospecting potential investors to attracting potential investors and moving them through your “investor funnel”. In its simplest form, a traditional sales & marketing process can be broken into 3 steps: Attracting and adding qualified leads to your top of the funnel on a regular basis. Nurturing and moving the leads from through the funnel with the goal of closing them as a customer. Servicing customers and creating a great experience until they become evangelist or promoters. You can easily translate the 3 steps into a similar system for fundraising: Filling the Funnel Unfortunately, qualified investors don’t automatically appear at the top of your funnel on a daily basis. On top of building a great business that investors will want to invest in you’ve got to make sure you’re doing everything in your power to pull investors into your funnel. Networking and email campaigns are key when it comes to filling the top of your investor funnel. Don’t be afraid to email or meet with an investor even if you’re not actively fundraising. Share your big-wins, losses, key metrics, etc. with your list of prospective investors to build trust and a long-term relationship. Jason Lemkin of SaaStr suggest making a “new VC quota” a part of your day-to-day job; “Meet that junior VC, that out-of-towner… Take that meeting with the guy that’s ‘a big fan’ if that’s your best investor meeting idea for the week, even if you know he doesn’t really understand what you do. It’s a quota. Take the best prospect you have, and either work that deal … or spend the hour prospecting to get another deal, another VC “. Nurturing & Moving Through the Funnel While you may not be actively trying to close new investors and add capital you should constantly be working the top of your funnel. Business plans change, investor interest wanes, and a slew of “maybes” and “no’s” will land in your inbox at crunch time. Meeting with investors only when you need capital likely won’t do the job. Staying fresh on the mind of potential investors 365 days a year using traditional marketing tactics (email drips, common networks, social media, PR, etc.) will pay dividends when its time to pull the string on a new round of capital. Set up a “drip campaign” to share updates with your potential investors on a monthly basis. We have found it best to send out a short update on the state of the business and industry. Share a promising metric or two showing strong growth in the business and any significant wins/improvements. Current Investors All new fundraising roads will lead to your existing investors and relationships. Customer success is key to maintaining a strong relationship with customers once they reach the bottom the funnel. The same can be said for your investor funnel. As Jason Lemkin puts it, “If your existing investors, even if they are angels, small VCs, whatever … don’t give you a 100.0000% positive reference … you may be dead in the next round. If I call up your existing angel investor, and she pauses when I ask what she thinks of you and the company … as a prospective investor for the next round, I’m probably out. Done”. So how do you make sure your investors are cheering for you? Just how you would service a customer to turn them into a promoter or evangelist: Invest in Investor Updates – Build a cadence and keep updates succinct as well as comparable. Consistent communication builds trust and keeps you on top of mind for your investors. Transparency & Candor – While driving an internal culture of candor results in better decisions, execution and output, the same can be said when communicating with your external stakeholders. At the end of the day, your investors have been in the same situation and are there to help you through “the struggle” or better yet, help you get to the next stage in your business. Respect their Time – Your goal should be to give your investors the ability to make the largest impact on your business with the least amount of exertion. When you are seeking advice or introductions, be specific. Find new investors and manage your fundraising with Visible Connect:

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. CEO Friday Note Successful companies come in different shapes and sizes yet they often share a few key traits. One of which being regular and open communication. Dig into any great leaders, past and present, and you’ll notice most (if not all) have created some type of management system that allows for open and regular communication. Whether it be Marc Benioff’s V2MOM, Scott Dorsey’s “Friday Note”, or Kyle Porter’s Weekend Update communication can also come in different shapes and sizes. As ExactTarget scaled from a small startup to hundreds and thousands of employees it was no longer feasible for Scott Dorsey to stay in touch with everyone. His answer? The Friday Note. In an interview with Chip House of Structural, Scott Dorsey had this to say: “I started officially sending out my ‘Friday Note’ in 2009 and never missed a weekly email for over five and a half years. It was a simple and very impactful way to highlight accomplishments for the week and keep the lines of communication open with our 2,000+ employees. It showcased the transparency in the company and helped us keep our unique ‘Orange’ culture as we scaled the company — one of the defining factors to our overall success at ExactTarget.” Weekly team Updates are a quick way to share your company vision, rally around goals, and stay aligned as the team continues to grow. On the flip side, weekly Updates tend to help CEOs and leaders stay on top of the business. As Kyle Porter puts it, “Personally, writing this email helps me better understand the state of the business. It also helps everyone else stay in the loop so they can help out where needed and not lose track of our direction.” We’ve pieced together an Update Template from different methods and styles used by leaders like Marc Benioff, Scott Dorsey, and Kyle Porter. Once you’ve dialed in your style and format you should be able to crank out a weekly Update to your team in 30 minutes or less!

Ask any founder who has raised venture capital and they will likely tell you that fundraising is a sales process. You need to prospect, nurture, and move potential investors through an “investor funnel”. As Mark Suster, Managing Partner at Upfront Ventures, puts it, “Remember that fund raising is a sales process. The investor is a customer and they have money to spend but only for a limited number of companies. They are buying trust in you that you will build a large business that will be valuable”. So where do you start? Just like a standard sales process; understanding who you’re selling to and building a list of prospects. Your Ideal Investor Persona It may sound obvious, but before you start building a list of potential investors you need to start with what your ideal investor looks like. Just as you would with potential sales leads, you’ll want to define who you are “selling & marketing” (read: pitching) to and why. (You can learn more about a traditional buyer/marketing persona here). Having a deep understanding of who you want to raise from will help as you put together decks, emails, and other fundraising documents. If done right, investors can be far more than a surge of capital and can offer relevant experiences, networks, and mentorship. A couple of traits to keep in mind while you build your “ideal investor persona”: Location – Where are you located? Do you need local investors? Or maybe you are looking for connections and networks in strategic geographies. Industry Focus – What type of company are you? Where should your future investors/partners be focused? e.g. If you’re a B2B SaaS company don’t waste your time with marketplace focused investors. Mark Suster suggest that it is best to prioritize investors with companies in your space. Stage Focus – What size check/round are you raising? e.g. If you’re raising a $1M seed round avoid a firm with $2B AUM. If you’re raising a $30M round avoid a firm with $75M AUM. Current Portfolio – What type of companies should be a signal to you that they’re a good fit? Is there a high likelihood they’ve invested in one of your competitors? If so, best to avoid as they likely won’t double down their bet with a competitor to a portfolio co. Motivators – What do want to get out of your investors and what do they want to get out of you? Do they need to match your values and culture? Deal Velocity – Are you in need of capital as soon as possible? Or are you taking your time and looking for strategic investors? Varying investor’s have different philosophies for the velocity they’re making deals. Point Nine Capital and Kima ventures are both regarded as top firms in Europe. However, Point Nine makes ~10 investments a year whereas Kima makes 1-2 investments a week. Your ideal investor profile should remain dynamic as your company continues to grow. Take a look back once a quarter or every 6 months to iterate and make necessary changes. Related resource: Accredited Investor vs Qualified Purchaser Building a List Once you’re honed in on your ideal investor start building a list of firms that fit the mold. Check out tools like AngelList and Crunchbase to get the ball rolling and continue to cherry pick investors as they seem fit. A simple Google Sheet with the firm demographics, point of contact, and necessary info should be included. Mark Suster suggests starting with a list of ~40 potential investors and ranking those as A, B, and C tier investors; “A” being your “Dream Schools” and “C” being your “Safety Schools”. If you’re adding investors that fit your ideal investor profile everyone in your list should be qualified to some extent. Next week, we’ll take a look at continuing to qualify and move your potential investors through your fundraising funnel. Find your ideal investor with Visible’s VC database:

A post by Brock Benefiel. Brock is a Digital Marketing Consultant, Tech Writer, and Author of the upcoming book Flyover Startups. Everyone finds time to talk up culture. You can find literally tens of millions of articles preaching the importance of establishing the right startup culture and enforcing it. If you’d like, you can spend endlessly amounts of time reading up on it and hear over and over again why it matters. But you’ll never have enough time to talk to your investors about culture. Instead, you’ll be forced in board meetings and company reviews to get straight to the point if you want to convey what’s important about your all-important company culture. So speak the language of your investors: use metrics, cite examples and show change. Your passion for your startup’s culture will be visible on your face and 80% of culture is expected to come from the founder. But your strategy for culture and any changes along the way should be put on paper and pushed in front of your investors regularly. Then, no one will be able to question its importance. So, how do you concisely and effectively communicate to your board that you’ve adequately defined your culture and have made it a successful one for your business? Use these strategies: Employee NPS scores If it’s works for customers, if we advocate it for investors, then don’t second guess the power of NPS when it comes to addressing the need for a quick and easy gauge on employee satisfaction. NPS is a hard metric and one that you can track, share with investors and work to improve. You company reviews are loaded with growth stats and NPS fits in nicely among the bunch. At HubSpot, they dig into the raw data from overall NPS and segment scores by department, tenure of employee, office location and gender in order to spot specific problem areas. Then, they can reach out to groups of employees most likely to be unsatisfied and find reasons for their disapproval. Hand the overall and segmented NPS numbers to investors and you’re already have shown your testing your employees on their satisfaction. “The employee Net Promoter Score is by no means a comprehensive way to measure employee engagement,” Jamie Nichol writes in CultureIQ. “Instead, it serves as a useful metric to track at a regular frequency over time.” NPS will never tell you the full story. But it’s a hell of a way to start the conversation. Problems solved “Even if the founders have invested a lot of time instilling culture into their core team, as the company scales and silos naturally form, negative culture can take root and easily get out of control,” Eric Blondeel and Moufeed Kaddoura contend in YCombinator . Your investors aren’t going to expect a flawless office environment. But they will expect a founder to be the one to quickly recognize the inevitable culture problems that arise and fix them just as fast. Your reviews and board meetings are great opportunities to cite specific examples of something that went awry and quickly explain the solution. Attacking it and fixing it shows you have your finger on the pulse of the company’s culture and can handle things as you scale. That’s a qualitative case of both founder and startup growth and investors will always care about that. The culture elevator pitch You are bound to grow a culture that is nuanced, complicated and worthy of long, flowery descriptions. But you need an elevator pitch for culture – have a few succinct examples of what makes your startup great. “You want people to say your startup is different from everyone else. But in what way?” First Round Review notes. “Figure it out early.” These takeaway examples serve as talking points for your investors. They are conversation starters when mentioning your business to potential investors, customers and employees. It’s also proof on your end that you care about culture and possess the ability to make it distinct. In his reflection five years after he sold the company, Eric Tobias can name specific aspects of his former company’s culture that made the business what it was and why it can be easily commerated no much how much time has passed. Culture is best when it’s sticky and easy to explain to anyone. Talk one-on-one meetings Have a meeting and talk about other meetings. How sexy?! How meta?! Okay, it sounds a bit ridiculous. But any good business treasures one-on-one meetings. They make one-on-ones a priority and have the leadership team spend these sessions asking detailed questions to find out what employees like and what’s frustrating them. These frontline efforts are key to getting a sense for your startup’s culture and how to improve it. If you need a helpful set of feedback questions, YCombinator has one here. Let your investors know you have a process in place that allows your managers to monitor the company’s culture and another measure to spot problem areas before they get out of control. Retention rate Finally, a simple but essential one. If you’re sharing your retention rate, your investors will appreciate the transparency because this can be an uncomfortable one. If your retention rate is low, you’ve got a culture problem on your hands. Either you’re not providing a valuable experience for the employees that are heading out the door or you haven’t defined culture well-enough for hiring managers to know how to spot it in potential employee interviews. A drop in employee NPS can be the canary in the coal mine but if retention rate plummets that’s when the emergency alarm goes off. Show your investors you’re monitoring it closely and prepared to act if you’re experiencing unnecessary churn.