You've gotten Series A funding. After months or years of living on savings, re-using paper clips and desperately figuring how long you can hold out, the worst of the financial pressure is over. You pop open the champagne that you can finally afford, and then get ready to turn your plans for world domination into a reality.
There's just one thing. The workplace you had before the funding came through will not be the same one you have now. Getting funded, and the growth that goes with it, will fundamentally change your company's culture, whether you want it to or not. As founder, it's important to keep an eye on those changes and make sure your newly funded company is still one where you and your key employees are happy to work.
That advice comes from Bonnie Crater, founder of Full Circle CRM, software that helps Salesforce.com users accurately track the effect of their marketing campaigns. The company closed its A round of funding last September. Since then, Crater says, she's seen changes that could put pressure on Full Circle's culture and worked hard to keep the company's culture in focus. Here's what she's learned so far:
1. Keep growth at a reasonable pace.
"Prior to funding, a company usually focuses on executing as cheaply as possible," Crater says. "With funding, the focus shifts to fast growth."
That's as is should be since now you not only have the funds to finance rapid growth but also a ticking clock as your new investors aim to make back their investment through an acquisition or IPO. But you should make sure the need to grow quickly doesn't make working at your company a lot less fun.
"With this shift, employees are expected to do more and they can start feeling pressure to generate many more leads, close many more deals, and support many more customers," Crater says. "If management isn't careful, the pressure can become too much and the company can start seeing higher turnover." That higher turnover means operating costs are higher, which leads to even higher sales targets, she says. It's a bad spiral.
To keep this from happening, make sure to set reasonable growth targets with your investors. For instance, Full Circle's growth target is to double or triple its sales and marketing targets year-over-year. But because the company is growing both its head count and its marketing budget at the same pace, Crater expects employees can execute the plan without experiencing too much of a crunch.
"We discussed it with the board and we agree those are good targets, both from a valuation standpoint and execution standpoint," Crater says. So far it's working-the company is ahead of its targets.
"We have really good investors," she adds. "They want us to grow fast but not too fast because they know companies that grow too fast often don't succeed."
2. Don't say yes to every new project.
Before getting funded, most companies have a natural check on taking on too many new projects-they can't afford them. With investor cash in hand, it's a whole different ball game. "You can do higher quality projects as well as more of them," Crater notes. "You have a lot of projects that got deferred but are important to the company so now you can do them. But you have to be careful not to overload employees so they start making a lot of mistakes and wasting money." To make matters worse, overloaded employees are likely to be unhappy-which can damage company culture-or leave, giving you the problems that go with high turnover.
The solution is to be as choosy about projects as you were before funding. Only now, the question is not whether you can afford a project but whether you and your staff have the time and bandwidth to take it on.
3. When it comes to hiring, pay close attention to cultural fit.
I know, I know. It's hard enough these days to hire really skilled employees-especially in tech fields-without worrying whether they're a perfect fit for your culture as well. Crater knows the challenges first-hand: Full Circle CRM has doubled in size from 8 to 16 employees since receiving funding, and has plans to double again to about 32 employees by the end of this year. (Here are 4 tips for making sure your employees are engaged as well as skilled.)
"Selecting individuals who are high performing is a high priority, but it's also important that you bring in people who fit the company," she says. "New people can change your culture. When joining large companies, I often heard that 'the company wasn't the same as it used to be,' and 'it's getting too big and no fun.'" And of course, that's a recipe for losing your longest-standing employees.
4. Say what your culture is.
If your company is successful and continues to grow, the day will come when you can't know every employee, or at least not well. That's why it's smart to think through the tenets and values that define your culture, and then put them down on paper so that everyone can see what they are.
Crater was a Salesforce.com senior vice president before founding Full Circle CRM, so she uses V2MOM (for Vision, Values, Methods, Obstacles, Measurement), a system designed by Salesforce.com founder Marc Benioff and based on Tony Robbins' work. "Vision is important for culture and even more important is values," Crater says. At Full Circle CRM there are five values, she says: customer success; transparency; team first; financial success; and balance (as in work-life balance).
Having thought out and written down those values is hugely helpful since it not only gives existing and prospective employees insight into the company's culture, but "we use them every day to help make decisions," Crater says. If you were to write down your company's culture and values, what would they be?