Beyond the pitch – the first 100 days with a VC on board

Getting venture investment is the first major turning point for a startup. All the months of work that went into pitching are over. There is money in the bank to turn plans into reality.
And there is now a VC firm (probably*) with a seat at your board meetings and a whole bunch of ideas for your business.

This is a challenging period for entrepreneurs who, understandably, will have established their own way of running their company. We come in with a lot of experience and advice, some of which might suggest very different ways of doing things.

It’s up to you to decide which recommendations to take on board and which to pass on. We appreciate that you are the expert when it comes to your product and market– it’s one of the main reasons we will have invested. However, there is a lot more to think about in terms of running a company properly so that it can grow and hit crucial milestones necessary for future investment. The mission now is to effectively deploy the venture funding you’ve just banked to get the business ready for a Series A funding round in about 18 months’ time.

So, while we can’t force anyone to heed our advice, we do expect our CEOs to listen to what we suggest to them and to properly consider whether it could benefit their business. Ultimately, we both want the same thing – for the business to succeed and grow. We have a tried and tested format for onboarding startups and helping entrepreneurs through the first 100 days that follow the first VC investment.

*Not all firms take a Board seat, some preferring just an Observer seat and some just information rights. All institutional investors will put in place clauses that give them veto rights over major decisions in the Investment Agreement and Articles which means that even without a Board seat they are well protected. We like to take aBoard seat as it reflects our commitment to the company. Directors have a fiduciary duty to all shareholders to make the company a success. Observers are only required look after the interests of their own money. This is not to say that all firms who have
only Observers will encourage CEOs to make decisions that are bad for the business but good for their equity, but for us it just makes our interests 100% clear to you and to us.

Getting the fundamentals right

Very early on, we will set up a kick-off strategy session that will map out those first 100 days and the longer-term requirements we believe you will need in order to raise a Series A – simply put, what your business will have to look like when it goes out to pitch next. We also bring targeted support to bear very soon after investment.

We will get Anouk Agussol, our people and culture specialist to advise on when and how to attract and onboard the best talent. Getting this right is crucial, as new team members have a huge impact on an early stage company. Anouk also helps founders develop management skills and navigate the admin obligations that come with being an employer.

Then there is focus on product market fit and go-to-market strategy with our specialist Siobhan Clarke. Siobhan works with entrepreneurs to develop their product and sales proposition, train them in the mysterious arts of selling to mid-sized and large enterprise and to set important sales milestones on the way to a Series A round. CEOs and CTOs will be invited to join our online groups where they can meet others on the same journey and exchange ideas and experiences. We also put on events every few months, so these groups can meet in person which always ends up being
invaluable for our CEOs and CTOs.

A seat at the table

Board meetings play a vital part in the performance of any company and that is no less true at the early stage. How to structure and get the most out of them will be on the agenda for the first board we attend. If we invest in your company, one of the Episode 1 team will become a member of your board and we will also bring an additional observer – another member of the team – who plays a less active role but is there to offer extra input as necessary and to act as someone with whom to discuss the company and its challenges. We usually recommend ten board meetings a year, skipping the quieter months of August and December. It’s important that everyone is well prepared for board meetings. We always make sure that we are, and we expect our time and effort to be reciprocated. That means getting any materials to us well ahead of the meeting so that we can make time to digest it thoroughly. We like to have what we need at least a few days ahead of the meeting. If we have just 24 hours it becomes difficult to fit the necessary time into our schedules. Send it with just hours to go and we simply won’t have had the time to properly look at it. Upfront, we offer a lot of advice on what to prepare and then on how to run the meeting and allocate the right amount of time to each agenda item. Making board meetings work effectively isn’t rocket science, so there’s no real excuse for not doing it well and that starts with everyone present being respectful enough to have prepared well. You can find out more about our approach to board meetings in managing partner Simon Murdoch’s blog post on the subject, which also has links to other great
resources.  Between us, the Episode 1 team have sat in many, many board meetings. In addition
to this we have held senior roles in companies and been entrepreneurs ourselves. We will have encountered many of the challenges your company is likely to face and can bring our experience to bear at board meetings to identify, understand and find solutions to problems.

The first 100 days, then, is one in which you can expect a lot of input and advice from
us which we like to see put into action over the first 180 days. Having Episode 1 as an
investor means the journey to Series A is one you can make with confidence.

adrian

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