You Closed Your Fundraising Round - Now What?

Closing your funding round is a significant milestone, but remember - nobody starts a company just to raise money. Knowing exactly what to do afterward, particularly how to allocate your newfound 💰, is essential to maintain momentum and reach the next round.

Here are five things to keep in mind (still useful if your round isn’t closed yet):

1. Create a Killer Investor Update Template

Maintaining transparent and consistent communication with your investors is super important. Develop a comprehensive investor update template that includes:

• KPIs: Highlight metrics that reflect your company's health and growth.

• Financial Overview: Summarize revenue, expenses, and cash flow.

• Good + Bad News: Don't shy away from challenges you're facing, good investors will help navigate it with you. 

• Asks: Clearly state any support you need from investors and how they can assist. (This one is the most important. Don't hesitate to ask for help.)

Regular updates (ideally every month) not only builds trust but also keeps investors engaged and ready to support future rounds. Here is my favorite template.

2. Recognize Distinct Financial Skill Sets: Making, Saving, and Spending Money

I’ve never met a founder who excels equally at making, saving, and spending money. Investors provide funds intending for you to use them strategically - don’t hesitate to spend when appropriate. First-time founders especially struggle here.

• Making Money: Focus on strategies that drive sales and business development.

• Saving Money: Avoid being penny-wise and pound-foolish. A startup bank account doesn’t follow personal finance rules.

• Spending Money: Money is a tool designed to buy you time and prevent costly mistakes. It’s not for hoarding.

Balancing these skills is challenging, especially spending wisely. The next point helps address this.

3. Set Up Robust Financial Systems with Fuelfinance

Efficient financial management is the backbone of a thriving startup. Partnering with services like Fuelfinance can streamline your financial operations by providing:

• Comprehensive Financial Planning: Accurate forecasting and budgeting to guide decision-making (see note on Spending Money above).

• Advanced Financial Analysis: Detailed reports on profit and loss, cash flow, and balance sheets (not all founders are Excel wizards and it is totally okay to outsource this).

• Dedicated Financial Expertise: Access to professionals who offer strategic insights tailored to your startup's needs (it helps if you can rent a CFO by the hour to help you with scenario planning and advanced financial analysis)

Especially if you're running an operations heavy company, getting such a financial system up and running allows you to focus on core business activities while not having to worry (so much) about financial health.

4. Streamline Back-Office Operations with Chore

Focus on what matters, admin tasks are certainly not something that drives growth in a company. As much as you can outsource this or delegate, the better. Use services like Chore to alleviate this burden by managing:

• Operations: Handling state filings, company registrations, insurance.

• Compliance: Ensuring adherence to legal and regulatory requirements.

• Finance and Equity Management: Overseeing payroll, cap tables, and financial compliance.

Don’t get bogged down by administrative chores, even if you have a COO.

5. Remember: You're Always Fundraising

Startup CEOs have two persistent jobs: fundraising and hiring. Never stop canvassing for investors or great hires. Focus on cultivating relationships with existing and new investors.

You just raised funds - this is a great opportunity to renew your growth experiments and see where you can use the new funds more effectively.