Our first accountant was my father, a CPA. Our first lawyer was our family lawyer. This works for a while, but as you begin scaling, there’s a point in time where it makes more sense to work with a professional firm.
One of the most underrated keys to fundraising success is who you choose as your service providers. The quality of your accountants, lawyers, and other partners can determine if your process is a breeze or a nightmare. This is especially true as you get into later rounds of financing and is typically ignored during earlier rounds.
There are certain things you can do as a founder to make fundraising easier. Knocking sales out of the park early, showing you’ve got a great product and go-to-market plan, having a solid team who has built and scaled startups before, or winning startup competitions and getting your name in the public arena all make fundraising a little easier.
Finding and Leveraging the Right Strategic Partners
In a startup’s early days, many founders can get away with wearing all of the hats — from accounting and bookkeeping to sales and marketing, to recruiting and hiring. This isn’t sustainable though.
You’re missing a critical opportunity to get great partners for your company early on if you’re ignoring service providers. Here are some examples of how partners help you on a regular basis:
1. Attorneys that Specialize in VC and Equity Deals
Having legal counsel with a track record of working with entrepreneurs and VC-backed deals is critical. It’s easy to overlook details of a deal if you’re unfamiliar with them. Having someone who knows the minute details of how decisions today could affect outcomes later can absolutely make or break your business.
If you’re gearing up for a financing round, now is the time to part with your uncle who may be an excellent family lawyer or Wall Street corporate lawyer and find a firm that specializes in startups.
2. Full-Service Law Firms
For my company, we knew we wanted a partner who could work with us on legal matters across departments and chose to work with a large, full-service law firm. That’s paid off in spades for us.
As we continue growing as a business, we have leaned on our lawyers for help with employment contracts, financings, sales and distribution deals, and more. Because we work with a single team who knows our business deeply, things happen fast and accurately which reduces cost in the end.
3. Accountant/Financial Firms
As a seed investor, I always ask for financials during diligence. I’m not too concerned about the numbers, but the thinking behind them. I want to understand how you, as a founder, see your business scaling. It’s equally important as a founder to be deeply tuned into your numbers.
As you move beyond seed stage, Series A investors care deeply about the financial health of the business and want to see you moving toward profitability or massive growth.
At my company, we work with company that has been our partner for financial reporting since the early days of the business. Partnering with pros meant we had access to not just basic bookkeeping but also strategic advice on how to optimize levers of our business. We could spend time focusing on ways to increase speed of customer payments, percent of upfront contracts, length of contracts, and more because we had the right partner on board.
That meant that at Series A, our books were organized, and it was clear how we were performing and where we’re going.
4. Professional Recruiters
Investors want to see how well founders can recruit in the early days. It’s one of the things that differentiates good founders from great founders.
After your Series A, you’ll most likely have big hiring mandates and will want to supplement with either in-house recruiting or external.
At my company, we hired an in-house recruiter and supplement with industry specific recruiters. For example, we work with a company to help supplement our recruiting pipeline for sales candidates with cannabis experience.
5. PR Team
Similar to hiring mandates, after you raise capital, you will most likely want to accelerate marketing initiatives. As a B2B company, my company’s main objective is to own market share, which from a PR perspective, equates to owning share of voice.
In our early days, I was primarily responsible for our PR initiatives, but as you begin to scale, bringing on partners to optimize for share of voice helps to amplify efforts. We work with a company who has been instrumental in helping position us as market leaders in the media.
Raising a Series A is an exciting stage for any company. It signals that you’ve made it over certain bumps in the startup road, that you have some market traction/validation, and are poised for financial and company growth.
Getting through these bumps requires a good business, growing sales, and a great team. Great partners can make everything even easier.
About the Author
Allison Kopf is the founder and CEO of Artemis, a market-leading cultivation management platform serving the fruit, vegetable, floriculture, cannabis, and hemp industries. She is an investment partner at XFactor Ventures and serves on the boards of Cornell University’s Controlled Environment Agriculture program and Santa Clara University’s College of Arts and Sciences.