The Work Starts After the Round

The visible fundraising process ends with signatures and money entering the company. The less visible process begins immediately afterward.

The founder now has new shareholders, new obligations, and a new source of potential support. The quality of that relationship depends on how consistently the company communicates once there is no pitch meeting to prepare for.

Know where the money goes

When an investor buys newly issued shares, the money enters the company and the existing shareholders are diluted. When an investor buys a founder’s existing shares, the money goes to that founder instead.

The ownership percentages may look similar, but the effect on the company’s cash is different. Founders should understand which transaction is taking place and why.

Reporting is part of the operating system

Anioł w Piekle recommends a regular investor update, commonly monthly. The update helps:

• founders review progress consistently;
• investors understand the current state of the company;
• both sides identify problems earlier;
• investors provide help with enough context;
• the relationship continue between formal meetings.

Reporting should not be delayed until the news is good. A useful update distinguishes facts from assumptions and shows what the company is doing next.

A simple update structure

A practical report can cover:

1. the most important changes since the previous update;
2. agreed key performance indicators;
3. cash position and material budget changes;
4. product, sales, team, and market progress;
5. current risks and problems;
6. decisions made or required;
7. specific requests for investor help;
8. priorities before the next update.

The exact metrics differ by company. Consistency matters more than decoration.

Use investors before the next crisis

Investors can help with introductions, recruitment, later financing, strategic questions, and difficult decisions. They can only do that well if they understand the company’s situation before an urgent request arrives.

The round is not the achievement. It is a financing event intended to help the company reach a milestone. The work is proving that the milestone was chosen well and that the capital is moving the company toward it.

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Source: adapted and translated from the post-investment chapters of the Polish original Anioł w Piekle (2021).