7 Things a startup must do immediately after getting funded

One of the unusual truths of the startup world is that although funding helps startups grow, not all of them can manage the investment sensibly and profitably.

Fewer than 1% of startups receive funding, and only 40% of startups turn a profit, according to reports. Clearly, startups need clear strategies to not only raise money but also what to do with it once they do!

Here are seven things that need to be done right away after receiving funding.

1) Organising the finances

It is critical to focus on organizing the financial side and maintaining a transparent and complete account for stakeholder management as soon as the funding begins to flow in. It is among the best things a startup can do to establish a reliable and transparent channel for all crucial communications. It is not possible to pursue further rounds of funding or win over current investors if this aspect is ignored. Obviously, it is wise to strategically distribute the money to ensure that the cash doesn’t run out before plans are executed. Realistic spending plans and goal setting are crucial.

2) Marketing and branding plans

Your first and most important question should be, "How can marketing help to boost your sales?" Money needs to be set aside for marketing and branding campaigns based on the sales goals. For better outcomes, it is crucial to be present on the ground and make the right investments in creating brand recall. Marketing and branding are among the top areas of focus for startups once they get funded, and rightly so.

3) Planning talent acquisition and team expansion

Any startup will likely want to focus on increasing the number of employees to scale up execution. Careful planning is necessary when expanding a team. There are too many headlines about startups that engage in mass hiring only to fire employees when the books do not reflect the desired trajectory. 52 Indian startups laid off over 17,000 workers in 2022. Such moves severely damage the brand. Therefore, it is important to be practical and only hire strategically.

4) Product development, re-development, and more

Many startups secure initial traction and investor interest based on the success of a Minimum Viable Product (MVP). As the funding arrives, the development and enhancement of the MVP should be the primary priorities. The product will need to be refined for product-market-fit based on the initial feedback received for the MVP. It may need small or large changes to aspects like base technology, features, usability, and user experience. Low or nonexistent product-market demand accounts for 36% of startup failures. Clearly, it is imperative to invest to close this gap. And that’s where funds can help.

5) Building a sales and marketing funnel

After the funding comes in, it’s time to work to convert market opportunity into revenue. This is the domain of the sales pros and go-to-market (GTM) wizards. The available funds can be utilised to understand the target market, build the right kind of buzz in your communications, grow a layered sales funnel with opportunities at every stage, and concentrate on closing deals. These funnels need to be accessed and revisited as needed to adjust for improved outcomes. This creates steady and sustainable traction while also optimizing the return on investment and speeding up growth. That takes the efforts of a committed sales team and sensible marketing strategies. All of which, of course, needs resources.

6) Focusing on customer retention and satisfaction

Customer satisfaction is a good candidate for allocating recently raised funding money. It is common knowledge that retaining current customers is preferable to acquiring new ones. Building relationships by winning the trust of the audience is one of the smartest moves any startup can make. This not only boosts market share but also attracts more investors through positive word of mouth that speaks highly of the efforts of the startup. To achieve a measurable improvement in customer satisfaction and loyalty, a startup must continuously enhance processes, offerings, and services. The aim should be that each time a customer interfaces with the startup, they receive something better and more.

7) Profiling risks and effective planning to solve challenges

Most startup founders know that the battle has not even begun when funds are raised. It has simply given them the resources to elevate their efforts. After the basics are in place starts the difficult work of risk management and preparation for solving novel and unheard challenges. This can involve but is not restricted to, changes in the macroeconomic environment and market dynamics and regulatory conditions. Recently funded startups can more effectively allocate resources to handle these challenges as they arise once they have categorized and profiled the risks. Therefore, setting aside some time, effort, and money to examine each of the risk elements can be an important investment to address problems collectively and more effectively.

Successful implementation of the startup’s vision becomes more with funding. However, it is also true that once investors are involved in the portfolio, each step just gets more complex and nuanced. As a result, it is crucial to have clear plans about what the startup intends to do with the money it raises and why. Recently funded startups need to focus on growing their market presence as well as reducing risks as they rise. Founders need to pay attention to the bigger picture as well as the path to get there. Raising funds is a milestone, not the destination.

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