How to Scale Financial Strategies After VC Funding

🔑𝐒𝐨 𝐲𝐨𝐮 𝐫𝐞𝐚𝐜𝐡𝐞𝐝 𝐭𝐡𝐞 $𝟏𝟎𝐌 𝐀𝐑𝐑, 𝐧𝐨𝐰 𝐰𝐡𝐚𝐭? 𝐇𝐢𝐧𝐭: ✅ Stop being the best damn firefighter in the universe. ✅ Build a top-notch fire station.🚒 ✅ Hire seasoned firefighters x10 better than you. ✅ Attract rookies with the potential that they will become x100 better than you. 🚩 CEOs, CROs, and startup leaders, here's the reality check. Scaling isn't just about hustling harder—it's about letting go of the "hero mentality" 🦸♂️ and building systems, teams, and structures that can scale for you. 🧐 My example? In one of my previous roles with a SaaS startup, we faced scaleup barriers during the euro-debt crisis, mostly because of its macroeconomics. 💡 Action? We decentralized the company by creating regional hubs that served different parts of the world. This setup proved highly efficient for scaling up operations and building trust. We developed the framework upon which we built the next phase. 🔍 Mega Success Stories of leveraging the game? ↗️ Salesforce: Scaled by transforming their early CRM focus into an enterprise cloud powerhouse. ↗️ HubSpot: Grew by mastering inbound marketing and launching a freemium model that drives long-term demand generation. ↗️ Zoom: Leveraged simple UX, reliability, and demand spikes to dominate remote communication. ↗️ Atlassian: Built scalable success by empowering developers through strong community-driven growth. ↗️ Shopify: Created infrastructure that enables small businesses to scale globally with customization. ✏️ 𝐁𝐨𝐭𝐭𝐨𝐦 𝐥𝐢𝐧𝐞? 💰 Upgrade your game: At $5M, you need hustle & grit. At $50M, you need to train, empower, & delegate like a strategic operator (+hustle & grit). 📢 Break the bottleneck. Here's how you can go from grit to growth⬇️ 🏆𝐀𝐬 𝐚 𝐥𝐞𝐚𝐝𝐞𝐫, 𝐞𝐯𝐨𝐥𝐯𝐞 𝐚𝐡𝐞𝐚𝐝 𝐨𝐟 𝐭𝐡𝐞𝐢𝐫 𝐜𝐨𝐦𝐩𝐚𝐧𝐲'𝐬 𝐠𝐫𝐨𝐰𝐭𝐡 𝐜𝐮𝐫𝐯𝐞. 🤯 Shift Your Mindset: Hustle will not get you past $20-30M ARR. Instead, shift to infrastructure and systems thinking. ⚙️ Build Operational Processes: Replace instinct with tested frameworks like capacity models, quota systems, & clear revenue architecture. 🔥 Fire (pun intended) Your Inner Hero: Great leaders elevate others. Build high-performing teams smarter than you. Enable them with frontline coaching and impactful enablement. 💸 Metrics over Instincts: Speak in ARPA, NRR, LTV, CAC, and strategic metrics. VCs/PEs and your MofB will demand to see such data, OKRs, & KPIs as you try to break the $100 M+ ceiling. 🚧 Infrastructure First: Build scalable systems, tools, and processes. These structures—not your hustle—will take you to $100 M. 🧠 Left-brained strategy wins. Leaders who replace chaos with process and instincts with data thrive. 🚀 The best leaders evolve ahead of their company's growth curve. Leave your "Firefighter Bravery Medal" visible on your desk, and build the best fire station! ⚡ What's your scaling story? Share your insights below! #Scaleup #RevOps #SaaS

A breakeven SaaS company growing at 33% generates the same value for shareholders as one growing at 50% with a 1.1 burn ratio. Given the current cost of capital, should CEOs press the accelerator, drive growth, and raise another round? Or should they pull back to break even with more moderate growth and forgo additional dilution? I’ve built a financial model to answer these questions. (link below) It looks at the outcomes for existing shareholders based on the following four assumptions: burn ratio, growth rate, cost of capital, and exit multiples. The model provides insight into this fundamental question: based on how efficient your business is at turning cash into ARR, and given the dilution needed to support that growth, should you jump on the accelerator or not? Alternatively, how much of a slowdown can you absorb in transitioning to breakeven without destroying value? The assumptions graphed compare a 50% growth business with a 1.1 burn ratio (defined below) to a 33% growth business with a .2 burn ratio. The higher growth business raises capital at five times ARR and exits at six times ARR, and the efficient business raises money at four times ARR and exits at five times. (These are slightly different assumptions than in the post's first sentence.) You can adjust the model as you see fit. Fundamentally, the burn ratio in the model drives the need for capital, which dilutes the current shareholders. In this example, the current shareholders clear $229 million in the High Growth scenario vs. $146 million in the Efficient scenario. That’s the math. The model, however, does not include a risk adjustment. The High Growth plan requires $127 million to be raised in five rounds over ten years. A lot can go wrong with that plan, including droughts in the VC market like we see today. In addition, the existing shareholders' ownership in the High Growth scenario is only 33% at exit. That might be fine, but founders need to consider the lack of control it implies. Another question you can answer is: what growth do I need to maintain if I scale back to break even? In the example referenced earlier, a 50% growth business with a 1.1 burn ratio creates the same value as a 33% growth business at breakeven. From an operator’s perspective, the model quantifies the valuation impact of capital efficiency, which includes your CAC ratio, overhead spending, and gross margins –- all of which impact the burn ratio. At the end of the day, this is just a model, and it’s infinitely easier to copy cells ten columns to the right than it is to build a software company. Founders and CEOs will need to place this analysis in the context of the many challenges that face software business, including the size of the opportunity and your own skill set, ambition, risk tolerance, and timeline. (Burn ratio is defined as Cash Consumed/New ARR. For this model, profit and loss are equivalent to cash flow.)

Today's post includes a few tips for early stage startups on what to prioritize immediately after closing a seed round from what I've learned at Bread and Butter Ventures: -Set your sights on the future. Do strategic planning for your Series A. Even though you just finished raising, this is the perfect time to do big-picture vision work and granular planning to outline the metrics you'll need to hit for the next round, and plan to work toward that. Outline your KPIs for revenue, growth rate, customer acquisition, churn, hiring, etc and then map resources accordingly to ensure you have enough cash to execute on the plan and build in the necessary time to raise again. -Resist the temptation to do a huge burst of hiring too quickly - continue to focus on capital efficiency. Ensure each hire is the right role and team member to bring onboard. -Resist the urge to build out a sales org too quickly; it's completely appropriate to be in founder led sales mode at seed stage. Once you have a clearly defined, repeatable sales process that's working with founder led sales, scale up from there. When you do hire, ensure a 30/60/90 day success plan. -Communicate proactively and regularly with your investors. This is so important!! We recommend a one-time all-investor kickoff huddle so your cap table can get to know one another and collaborate. -Lean into building company culture - it's so important in these early days to establish a strong foundation. What would you add? #venturecapital #seedstage #entrepreneurship