Securing your first round of funding marks a pivotal moment in the life of a startup, serving as both an acknowledgment of your vision’s potential and the start of a transformative journey. 

This milestone also signals the need for a comprehensive reevaluation of team dynamics, operational practices, and the roadmap ahead. Backed by a fresh infusion of capital, the immediate task at hand involves addressing some areas that will set the foundation to achieve your main objectives over the next 18 to 24 months.

At Companyon, we work closely with our portfolio companies to help them lay down these building blocks in a two-day workshop dedicated to making sure they’re set up to flourish in this period of growth. I’ll be drawing from my experience facilitating these workshops to provide insights and practical advice—as well as a few pitfalls that founders often encounter—to help you effectively navigate these challenges, setting your startup on a path to success.

1. Establish Your Mission and Values

After raising your initial round, your first focus as a founder should shift to defining your company’s mission and values. 

This is an essential step. In this phase, every decision, from product development to customer engagement, must align with your mission and values to ensure consistency and coherence in your startup’s trajectory. The creation of a mission statement and the identification of core values are not tasks to be taken lightly, as they encapsulate both the prime objectives and moral compass that will guide your company’s operations, strategies, and interactions. 

The timing of this exercise is important and intentional—engaging in this process immediately after fundraising provides the baseline needed to build a team that deeply connects with the startup’s fundamental ethos, fostering a culture of shared goals and mutual understanding. Moreover, it shapes the way you approach future planning, ensuring that every decision, big or small, is true to your startup’s core identity.

However, don’t make the mistake of thinking that this step has to wait until this stage in the game. Establishing a well thought-out foundation before or during your fundraising stage can take your pitch to the next level in terms of clarity and focus—giving prospective investors a boost of confidence in your vision and a better understanding of what you’re working to achieve.

2. Hone In on Your Startup’s Vision

Now that you’ve defined your mission and values, the next step is to establish what we call your North Star—the overarching vision or direction that informs every decision and action. 

The North Star is your startup’s guiding light, defining not only where you aim to go, but also where you choose not to spend your efforts. This clarity ensures your resources are directed towards activities that align with your ultimate goal—enabling your team to maintain a path forward that is focused and purpose-driven while navigating away from tempting diversions that don’t serve your core objectives. 

The North Star also plays a vital role in recruitment. Every new hire should understand and connect with the motivation behind why you do what you do. This alignment is key in making sure that everyone, from the CEO down, is working cohesively to reach the same destination. 

While your strategy may evolve with annual and quarterly planning cycles, the North Star remains a constant—guiding your startup through its growth journey and ensuring that all future efforts are focused on heading in the right direction.

3. Map Out a Path to Financial Stability

After laying the groundwork with your startup’s core values and goals, it’s time to craft a detailed financial blueprint that aligns with your vision for growth over the next 18 to 24 months—emphasizing capital efficiency over expansion to ensure that funding is deployed effectively. 

Begin by envisioning where you want your startup to be in two years, covering metrics such as revenue targets, customer base size, strategic partnerships, and team expansion. Then, calculate the necessary expenditures to realize these goals. Critical questions will start to emerge: What contribution to revenue can be expected from new customers? How does the cost of acquiring these customers balance with the lack of a specified budget for sales and marketing efforts?

Once you have answers to these questions, you’ll need to evaluate your projected expenditures against your expected revenue and existing funding. This will help you determine the viability of your two-year vision and identify potential problem areas. 

For instance, imagine that your startup closed last year with $2 million in annual recurring revenue (ARR) and, fueled by fresh funding in January, you set an aspirational goal to triple your ARR within a year. First, you’ll need to calculate your net retention—for this example, let’s say it’s 110%, which brings your $2 million up to $2.2 million. This means that you’ll need to focus on acquiring new customers to make up the remaining $3.8 million needed to hit the target. 

This planning phase often unveils the stark realities of customer acquisition costs, which might not have been previously defined. Industry norms suggest $1 spent on sales and marketing should generate $1 in net new ARR, but for many SaaS startups, this cost can escalate to $1.5 or even $2 for each new ARR dollar. In our example above, this would leave you seriously short, requiring as much as $7 million to achieve that $3.8 million in new revenue—and if you haven’t yet raised enough to cover the difference, you’ll need to reassess your goals.

The good news is, this kind of bottom-up planning will give you a realistic picture of where you stand in relation to your objectives. Completing this financial review now will provide the insight you need to set achievable goals and allocate your resources wisely to meet them.

4. Transition Away From Founder-Led Sales

In the early days, a company’s success in sales is often dependent on just one or two people: a founder, co-founder, or team member. As your company grows, you’ll hire your first set of sales executives under the assumption that professional salespeople will automatically be able to sell your product. The truth is, they probably can’t—because they don’t know your product, customers, or target prospects as well as you do. 

Founder-led sales tend to be less selling and more evangelizing. Prospects can feel a founder’s passion; they recognize that founders, after expending years of time and effort to find product-market fit, have an intimate understanding and appreciation for what the prospective customers are going through and what they need from a product or service. 

In order to succeed, founders need to find a way of transferring that knowledge to a sales team. This requires more than simply walking someone through a product demo, or sitting in on a few sales calls—it’s extremely difficult to transfer lived experience. 

The ideal solution is to recruit what we call a “renaissance sales leader.” Unlike a highly experienced executive used to managing large teams, a renaissance sales leader excels in the startup environment, especially during transitions. They specialize in absorbing knowledge from the founder and imparting it to a small team—often working with minimal product marketing or branding resources—to passionately promote your product. This leader combines analytical skills with a deep understanding of the founder’s vision, ensuring they can effectively coach the sales team. 

Finding the right leader to take on this role is crucial in maintaining and enhancing the passion and insight that were key to your initial success as your team grows.

5. Define Your Ideal Customer Profile

Developing your ideal customer profile (ICP) is mission-critical to expansion-stage success. The ICP zeroes in on customers whose needs and pain points are directly met by your product, leading to faster sales cycles and higher conversion rates at the prices you aim for. 

Engaging customers outside this core group can lead to challenges, such as extended sales processes, decreased conversion rates, and increased churn—which in turn drains resources and shifts attention away from more fruitful prospects. 

A common pitfall is the temptation to pursue these non-ideal customers for short-term revenue gains. This approach, however, can dilute focus and divert resources from more promising opportunities. It’s essential to make a firm commitment to cease engaging with non-ideal customers—a decision that may need to be enforced at the leadership level. 

Despite initial agreement, I’ve seen this issue revisited many times in board meetings months later, as sales teams have continued to pursue these less-than-ideal customers for the sake of meeting revenue targets. It’s critical to resist that temptation. In extreme cases, I’ve even suggested withholding commissions on sales to non-ideal customers as a measure to ensure compliance with this strategy. This emphasizes the importance of aligning sales actions with long-term company goals—and quickly ensures that offending sales reps will stop selling to those profiles.

To hone in on the correct audience, start by conducting a detailed examination of customer interactions, purchasing patterns, and feedback with the goal of distinguishing your most valuable customers from less suitable ones. This analysis will help you adjust your sales and marketing strategies to exclusively target your ICP, allowing your team to focus on customer segments that offer the most significant potential for long-term success.

A Few Final Notes

If you’re still actively in fundraising mode, these first steps toward operational efficiency and targeted growth don’t have to wait until after the funds are in the bank. 

In fact, laying this groundwork now can make your fundraising efforts even more successful. A crisp, comprehensive pitch that goes beyond product features to articulate your long-term goals can significantly resonate with potential investors; highlighting your commitment to investing not just in your product, but in the future of your company.

As part of our expansion program, Companyon provides hands-on guidance through all of the steps we just outlined and more—helping our portfolio companies find go-to-market readiness and setting them up for an outsized Series A. If you’re a post-seed founder ready to enter the expansion zone, reach out to our team today to see if we’re a fit to work together. For information on our approach and how to best connect with us, contact us here.