Sign up with your email address to be the first to read new stories, exclusives, VIP offers, blog features & more.

The First 5 Things You Need To Do As A Founder After You Have Raised Seed Funding

You’ve done it! For many start-up founders in London the thrill of raising capital for a venture is what got them into the start-up scene in the first place. The UK is renowned for being one of the best countries in the world to do business – you can start a business in just 15 minutes here –and also because of schemes such as the Enterprise Investment Scheme and Seed Enterprise Investment Scheme (EIS and SEIS) that incentivise high net worth individuals to invest in tech start-ups – the business angel network in London is very strong.

But when you first raise seed funding for your start-up the irony is that you will have to keep a closer eye on the purse strings that at any stage previously – after you have celebrated the raise properly anyway!

There are several things you must do – areas that your investor believes you have covered – starting with the following.

Staff contracts and vesting schedules

Vesting schedules are a great way to keep staff motivated and performing. Vesting schedules work by releasing equity to staff bit by bit over time – if they stay for one year, 5% is released to them, after 2 years, another 5% and so on. An opportunity to increase their share in a growing company is what most ambitious workers in start-up land are looking for, so make sure you tie your staff down to watertight contracts as soon as you can.

R&D, loans and grants

This may seem like a strange time to be thinking about raising money again or attempting to claim back money already spent but in the long run it makes good business sense. If you are on a roll its worth seeing how far you can take things, if one or two investors have decided to back you why not reach out to more. Also keep an eye on the latest government-backed schemes like the London Capital Investment Fund and also try to regularly check and see if there are any research and developments grants that might be appropriate to your business.

Finally, it’s possible to claim back up to 35% of the money you have spent on R&D, offsetting it against corporation tax, or if your company is not profitable creating a tax rebate. Many companies don’t bother to do this but, a little bit of administrative work aside (it’s easy to outsource this work) it’s free money back for your start-up.

seedy2

the last thing you want to do after you’ve finally completed a raise is to lose sight of the company vision; your business life is just about to get started!

Sign off on the business plan and agree milestones

Now that you have raised some money it’s time to deliver on that plan you have drawn up – sign off on it as soon as possible – presumably you know it like the back of your hand having pitched it over and again to investors so it’s time to start acting as if you believe it’s watertight. Sure, there will be problems along the way and you may have to revise your plans but in the initial stages, have faith in the path you have laid out and stick to it. Establish what you want to achieve and when you are going to achieve it by. Investors set a lot of stall by milestones.

Start the marketing push

Again, this is a question of acting fast now that you have been given the metaphorical green light with fresh investment. The marketing push is probably something you have had ideas about since day one and now it is time to execute.

Most start-ups in London (or indeed anywhere else) are operating in highly competitive markets where first-mover advantage can make all the difference. So get your message out there! Social media is a great place to start, and if you can interest journalists (either by engaging a PR agency, creating an in-house PR team or doing it all yourself) and get featured in a print or an online publication people will take notice. At this point, sign-ups, strong traction or paying customers may be what you need, so start considering your strategy.

Take a deep breath

Ok this last one is more like a piece of advice but after completing a cycle of fundraising you probably feel exhausted, or worse that the hard part is over. What’s really happened is that you have just made the fortunes of your company interesting not just to you but now also to your business partners. Working patterns will change, the chain of command will be altered slightly and your every decision may need to be justified to and upheld by the board. So take a very deep breath…and…you’re back in the room…

 

No Comments Yet.

Leave a Reply

%d bloggers like this: