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Being a startup founder is difficult. For many founders, it is their first time having full responsibility to fund their business, hire a team, build a product, and scale all aspects of their business. As Seth Godin puts it, “There are things you’re going to do just once. Get your tonsils out. Pick a caterer for your wedding. Raise money from a venture capitalist. Apply to college…When you have to walk into one of these events, it pays to hire a local guide. Someone who knows as much as the other folks do, but who works for you instead.” Learn more about how founders can tackle their challenges and asymmetric experiences by finding a startup mentor below: What is a startup mentor? A startup mentor is someone who can offer a startup founder (or employee) mentorship, advice, and support by sharing their own experiences and knowledge. For early-stage founders, a mentor can be particularly useful when it comes to understanding the different roles and responsibilities that come with the role of founder. Startup mentor vs. advisor Startup advisors are typically a more formal agreement than a mentor and are used to fill strategic gaps for a business. As put by the team at Mentor Cruise, “Startup advisors are chosen and utilized on a varying range of topics. The most common startup advisors are professors, founders, and serial founders themselves, with deep expertise in a company’s niche.” What Does a Startup Mentor Do? As we put in our blog, Startup Leaders Should Have a Mentor, “A great mentor can have an exponential impact on both your personal development and the growth of your business. They can serve as a guide through tough times, a voice of warning about potential pitfalls, or a source of challenging feedback and honesty. The best mentors are a combination of collaborator, coach, and friend.” What exactly does that look like in practice? Check out a few examples of what a great startup mentor should do below: Provides expert guidance and insight A great startup mentor will be able to offer guidance and insight. This typically comes from their own experiences and past roles in the industry. Different mentors will likely have different levels of expertise but you can expect help with leadership, hiring, company building, fundraising, etc. Related Resource: 10 Resources to Develop Your Leadership Skills Helps set goals and objectives Mentors are great for helping set goals and objectives. They are someone who can help hold you accountable and make sure you stay focused on the goals and objectives at hand. Offers networking opportunities The startup world is a tight-knit community. A mentor can offer introductions to their network — potential investors, other founders, executives, mentors, etc. Related Resource: Seed Funding for Startups 101: A Complete Guide Enables skill development If your startup mentor has expertise in a certain area, chances are they will be able to help hone your skills. For example, if a mentor is a strong leader they will be able to offer the skills and tools you need to level up your leadership skills. Benefits of a Startup Mentor The idea of a startup mentor typically sounds good on paper. Building a relationship with a mentor requires time from you — an expensive investment for a startup founder. To determine if a startup mentor makes sense for you and is worth the investment, check out a few of the benefits below: Network expansion As we previously mentioned, the startup world is a tight-knit community. A great mentor can offer opportunities to network with other founders, investors, executives, and startup leaders. This can pay dividends when it comes to raising capital in the future, hiring top talent, and closing new customers. Risk mitigation A great startup mentor likely has experience building and scaling a business. As most startup founders know, scaling a business is not always up and to the right — there are inevitable down periods and difficulties that arise. A mentor can come in handy when it comes to navigating these troughs and making sure you stay on the right path. Enhanced-problem solving Related to the point above, a mentor can help when it comes to problem-solving. A great mentor will spend more time listening than talking so will have a deep understanding of your issues and help you tackle them with sound advice. Accountability and motivation Being a startup founder can be lonely at times. For most founders, you are taking on multiple roles that you have limited experience doing. A startup mentor can help hold you accountable and motivate you as you face challenges. It will give you a peer to bounce ideas off of and keep you heading in the right direction. How to Find a Mentor for Your Startup Finding the right mentor for you and your business is crucial. Different mentors might come from different backgrounds with different experiences. You’ll want to make sure you have a mentor that matches your values and can offer a lift to you and your overall business. Check out some basic steps for how you can find a mentor below: 1. Identify your needs First things first, you need to identify your needs. Depending on your gaps as a founder will determine what you might want in a founder. We also suggest thinking through people, and attributes, you admire in a person. This will dictate the type of person (or exact person) that you want as a mentor. 2. Seek a mentor who aligns with your needs Once you lay out your needs, it is important to work on identifying the specific person. We suggest creating a list of 3-5 ideal mentors. You can scroll through your own LinkedIn or Twitter connections and slowly build out a list of individuals you admire who would make a good fit as a mentor. 3. Leverage your network If you are not directly connected with your ideal mentor, it typically makes sense to leverage your network to find an introduction. Before asking for an introduction it is important to do your research on the individual and make the case why you would be a good fit as a mentee. As we put in our post on finding a startup mentor, “Ideally, you want to answer the following questions: What is their attitude toward mentorship? What are they currently working on? What makes you think they’ll be a good fit?” 4. Utilize online platforms If your immediate network does not offer any good mentor candidates, you can turn to other social networking tools and websites to find a mentor. You can check out tools like GrowthMentor to be matched with a mentor that fits your needs. 5. Reach out thoughtfully Once you’ve identified your top candidates it is important to reach out thoughtfully to see if they’d be interested. We recommend starting with your #1 choice and moving down your list depending on the outcome. The key is being straightforward and respectful of the other’s time. Check out an example that we previously put together below: Hello Tom— I hope you’re having a great day! It was great running into you at the conference last week. I’m writing because I am currently looking for a mentor who might help me develop into a better leader as I work on scaling Kloud Co. I really admire what you were able to do with BiggerKloud Co, and I’d love to learn some lessons from you if you’re willing. I know mentorship can seem like a big commitment, so maybe we could start by having lunch later this month to see if there might be a good fit? My treat! If you don’t have the time or bandwidth right now, please don’t feel obligated. And if there’s someone else you think I should be speaking with, please let me know that, as well. Thanks, Tom! Let me know what you think. Barb Connect with Investors with Visible Connecting with the right investors is crucial to funding success. In order to better help with your fundraise, we’ve got you covered. Related Resource: A Step-By-Step Guide for Building Your Investor Pipeline Find the right investors for your business with our investor database, Visible Connect. Add them directly to your fundraising pipelines in Visible, share your pitch deck, and send investor Updates along the way. Give Visible a free try for 14 days here.

Building a startup is challenging. Founders are faced with hiring a talented team, building a strong product, financing their business, and more — oftentimes with limited experience in many areas. For many founders, it helps to learn from their peers, investors, and operators that have done it before. A great starting point for many founders is turning to a podcast with experts in different aspects of startup building and venture capital. Check out our list of different venture capital podcasts below: 1. Founders Forward The Founders Forward Podcast is our podcast at Visible. At Visible, our mission is to give founders a better chance of success. In order to help founders do so, we try to pull data, information, stories, tactics, etc. from other founders and investors. With the Founders Forward Podcast, we regularly interview different startup founders and venture capital investors. We try to find guests that are experts in different fields — from anything to building a pitch deck to understanding SEO for first-time founders. Episodes are typically between 30 and 60 minutes. Related Resource: Our 7 Favorite Quotes from the Founders Forward Podcast Why We Like It Our goal with the Founders Forward Podcast is to strap founders with resources and knowledge to help them tackle problems at their own businesses. We might be partial but a few reasons we like the Founders Forward Podcast: Our guests are experts in a dedicated space or field We interview founders or VCs who are just “one step ahead” of where you might be We cover everything from raising venture capital to running a PLG playbook to sleep science Related Resource: 5 Takeaways From Our CEO On The Stride 2 Freedom Podcast 2. The Twenty-Minute VC As put by the team at The Twenty Minute VC, “The Twenty Minute VC (20VC) interviews the world's greatest venture capitalists with prior guests including Sequoia's Doug Leone and Benchmark's Bill Gurley. Once per week, 20VC Host, Harry Stebbings is also joined by one of the great founders of our time with prior founder episodes from Spotify's Daniel Ek, Linkedin's Reid Hoffman, and Snowflake's Frank Slootman.” Why We Like It The Twenty Minute VC is one of the most tenured podcasts in the VC space. This has led to a large following. A few reasons we like it: Guests — Big-name guests that play an integral part in the VC space Digestible Format — Most episodes are between 30 and 60 minutes. While not 20 minutes like the names suggest, they are still approachable in length and format. Topical — As the podcast is published regularly, many episodes and guests cover current events and relevant topics in the space. 3. Venture Unlocked As put by their team, “The Venture Capital community is no longer the monolithic asset category that it once was. Over the last decade, new forms of capital providers have emerged to drive the innovation economy. Venture Unlocked is the newsletter and podcast playbook designed to educate and assist emerging managers and aspiring investors with the information and tools necessary to drive smart, diverse, and informed capital to entrepreneurs.” Why We Like It Venture Unlocked goes beyond a podcast with a newsletter that is regularly sent. A few reasons why we like the Venture Unlocked community: Data & Trends — The Venture Unlocked podcasts and newsletter is full of venture data and trends that can be applied by founders, VCs, and LPs All Aspects of VCs — The Venture Unlocked community not only focuses on VCs <> Founders but LPs as well Regular Cadence — New episodes and newsletters are consistently published so you know things are up-to-date and relevant. 4. Masters of Scale As put by their team, “Since its launch in 2017, Masters of Scale with Reid Hoffman has grown into a vital listen for business leaders, thanks to its groundbreaking format. In each episode, LinkedIn co-founder and Greylock partner Reid Hoffman demonstrates how companies grow from zero to a gazillion, testing his theories with legendary guests.” Why We Like It Check out a few of the reasons why we like the Masters of Scale podcast below: Successful Host — Reid Hoffman is the founder of LinkedIn and offers countless tips from his own experience. High Product Value — The Masters of Scale Podcast offers great production value Storytelling — Reid uses great storytelling strategies and stories from real-world examples to make a point. 5. The Neon Podcast (fka 100x Entrepreneur) As put by the host, “Hi, I am your host Siddhartha! I have been an entrepreneur from 2012-2017 building two products AddoDoc and Babygogo. After selling my company to SHEROES, I and my partner Nansi decided to start up again. But we felt unequipped in our skillset in 2018 to build a large company. We had known 0-1 journey from our startups but lacked the experience of building 1-10 journeys. Hence was born the Neon Show (Earlier 100x Entrepreneur) to learn from founders and investors, the mindset to scale yourself and your company. This quest still keeps us excited even after 5 years and doing 200+ episodes.” Why We Like It Check out a few reasons why people like The Neon Podcast below: Hosts — Siddhartha has experience as a founder and has gone through the journey of starting, scaling, and selling a startup. Guest — The Neon Podcast offers a wide range of different guests offering different perspectives and insights. 6. LA Venture As put by their team, “We talk to Southern California VCs to get to know them, their funds, and their advice for entrepreneurs. Hosted by Minnie Ingersoll from TenOneTen, an LA-based seed fund investing in b2b software.” Why We Like It Check out a few of the reasons why people listen to LA Venture below: Focus — The LA Venture podcast is hyper focused on the VCs and startups in Southern California. Different Stages — The LA Venture podcast hosts VCs that specialize in all startup stages, from accelerators to late stage investors. Hosts — Minnis works at a LA-based seed fund so they know they ins and outs of what to asks their guests. 7. Distilling Venture Capital As put by the team at Distilling Venture Capital, “Host Bill Griesinger brings an informed, unbiased and unique historical perspective to the venture capital and high-tech world. Drawing on over 20 years in venture finance, working with tech companies and venture capitalists, he offers an unfiltered and transparent view of the venture capital & high-tech universe.” Why We Like It Check out a few of the reasons why we like the Distilling Venture Capital Podcast below: Guests — Bill brings on a number of different guest, from angel investors to venture capitalists to startup CTOs and executives. Topics — The Distilling Venture Capital podcast covers everything from cap table management to hiring. 8. Equity As put by their team, “The intersection of technology, startups, and venture capital touches everything now. That’s why Equity unpacks the numbers and nuance behind the headlines for entrepreneurs and enthusiasts alike. Every Monday, Wednesday and Friday, TechCrunch reporters Alex Wilhelm and Mary Ann Azevedo keep you up-to-date on the world of business, technology, and venture capital.” Why We Like It Check out a few reasons why we like the Equity podcast below: Consistent — The Equity podcast has 3 new episodes every week, rain or shine. Data points — As Equity is a TechCrunch podcast they are able to use relevant industry data points. Current events — With their consistent schedule, Equity is able to share current events in the startup world on a regular basis. 9. The Road Untraveled The Road Untraveled is a podcast hosted by Brian Hollins, Founder and Managing Partner at Collide Capital. The podcast is shared sporadically and features prevalent guests in the VC and startup world. Why We Like It Check out a few reasons why we like The Road Untraveled below: Host — Brian is an active VC and offers a unique perspective and take as they are active in the space. Guests — The Road Untraveled offers a wide range of guests and offer insights. Digestible — Most episodes of The Road Untraveled are 30 minutes or less, leaving for an easy and quick listen. 10. The Full Ratchet As put by The Full Ratchet host, “My name is Nick Moran and I launched the first Venture Capital podcast, The Full Ratchet, in May of 2014. I started angel investing in 2013 and found the startup fundraising/investing process to be confusing and opaque. The industry was a black-box with little transparency. Yet, I observed that venture drives significant value across both public and private markets. And the most inspiring, thought-provoking people that I had interacted with were startup entrepreneurs. After a year of coffee chats with VCs and Angels, it became clear that I could learn the most from conversations with the experts. And why not record the conversations to help others in a similar situation?” Why We Like It The Full Ratchet has been around since 2014 and has formed a loyal following. Check out a few of the reasons we like The Full Ratchet below: Engaging Community — Nick allows community members to ask questions and helps them answer questions. Great Guests — Nick hosts a wide variety of guests that offer great insights into the VC world. Relevance — The podcast is regularly published and features topical and relevant subjects. 11. How I Built This As put by the team at How I Built This, “Guy Raz interviews the world’s best-known entrepreneurs to learn how they built their iconic brands. In each episode, founders reveal deep, intimate moments of doubt and failure, and share insights on their eventual success. How I Built This is a master-class on innovation, creativity, leadership and how to navigate challenges of all kinds. New episodes on Mondays and Thursdays for free.” Why We Like It How I Built This is one of the biggest podcasts in the business world. The podcast is well-liked by startup founders and others for a few key reasons: Guests — Guy Raz interviews the biggest names in the business and startup world. Lessons — The guests are great at sharing a few key takeaways and lessons they learned from building their business. Engaging Host — Guy Raz has become one of the most popular podcast hosts due to his engaging and laid back approach to interviewing. Learn More Through Podcasts and Connect with Visible Today Learning from peers, investors, and operators is a great way to strap yourself with basic knowledge to tackle your different duties as a founder. At Visible, we use our own data, founder and investor interviews, and best practices from leaders to help founders improve their odds of success. Stay up to date with our resources by subscribing to our weekly newsletter here. Related resource: The Future is Green: 15 Climate Tech Startups to Watch This Year

About Moxxie Moxxie was founded in 2019 by former Twitter executive Katie Stanton. Prior to starting Moxxie Katie worked at Google, in the Obama administration as a Special Advisor to the Office of Innovation, and co-founded the angel group #Angels. In 2021, Katie brought on Alex Roetter, whom she had worked with before at both Twitter and Google, as an equal partner in Moxxie’s second fund of $85M. Alex joined Moxxie with a wealth of operational and engineering experience from previously serving as the Senior VP of engineering at Twitter for 6 years as well as working as a software engineer at Google and various other early-stage startups. Today, Moxxie has invested in over 60+ seed-stage companies in the consumer, enterprise, fintech, health tech, and climate sectors. The team at Moxxie is differentiated by their operational experience and focus on underrepresented founders. According to an article published in Forbes, out of the 27 investments from Moxxie’s first fund, 36% were founded by women, 40% by people of color, 8% by Black founders and 43% by immigrant founders. Learn more about Moxxie. This Case Study was put together in collaboration with Alex Roetter, Managing Director and General Partner at Moxxie. What Moxxie was doing prior to using Visible In the early days at Moxxie, the team used a combination of check-in calls at varying frequencies, ad-hoc meetings, and texts to gather updates from their companies. Later on, they created a Google Group email alias where founders sent their updates so the communications were all stored in one inbox. The Moxxie team kept a summary of each company in a combined Google Document that was updated irregularly. The portfolio monitoring challenges Moxxie was facing The main issue with Moxxie’s ad-hoc method was that “...it was just all very manual. It was a mish-mash of documents and hard to maintain. We were inconsistent in how up-to-date we were on different companies,” shared Alex, Moxxie’s Managing Director. The manual effort required to stay on top of portfolio companies meant portfolio monitoring was “...falling to the wayside and we were not doing as good of a job [monitoring our companies] as we needed to be.” “...it was just all very manual. It was a mish-mash of documents and hard to maintain. We were inconsistent in how up-to-date we were on different companies." It’s common for investors to feel overwhelmed as they attempt to manually keep up to date on a growing number of portfolio companies despite recognizing the benefits of doing so. Alex emphasized that the main reason Moxxie wanted to improve their portfolio monitoring was to ensure they were spending their time most effectively at their firm. It was hard to identify which companies needed their support and where Moxxie's time would be most valuably spent “...without having a regular heartbeat from [their] portfolio companies.” The reasons Moxxie chose Visible Moxxie’s founder Katie Stanton was told to check out Visible’s KPI tracking capabilities at the end of 2022 while she was attending the Equity Summit, an invitation-only gathering that brings together thought-leading LPs and GPs that drive industry change. Alex from Moxxie reached out to Visible soon after the initial referral to schedule a demo. The demo confirmed that the Visible platform had exactly what Alex was looking for in a portfolio KPI tracking tool. Moxxie's portfolio monitoring criteria included: An automated way to send structured data requests to portfolio companies A solution that wasn’t taxing on their founders Allowed founders to share their data within seconds Ability to see all their portfolio data in one clear place Ability to easily build Tear Sheets for each company Moxxie's onboarding experience with Visible Moxxie’s onboarding took approximately 9 days to complete. When asked to share feedback on Visible’s onboarding process Alex shared “Everything was great. Whenever we had bulk data in a CSV that needed to be uploaded we shared it with Visible and it was uploaded within 24 hours.” Check out additional Visible reviews on G2. How Moxxie is leveraging Visible to streamline portfolio monitoring and reporting processes today Today Moxxie doesn’t have to remember to check in with their companies or make guesses about their companies’ recent progress updates. Instead, Visible has enabled Moxxie to send automatic, recurring, structured data requests to their companies that can be completed without their founders ever having to log in or create an account. The Moxxie team is immediately notified when companies complete data Requests. From there, they are able to easily identify which companies need more support. This streamlined, founder-friendly process ensures the Moxxie team can continue to spend time on high-value fund operations, such as deal flow, while also efficiently monitoring and supporting current portfolio companies. Taking a closer look at Moxxie’s use of the Visible platform, the team primarily uses four main features on Visible: Requests, Tear Sheets, Reports, and Updates. Requests: Streamlining Moxxie’s portfolio KPI data collection process Moxxie uses Visible’s Request feature to collect 5 metrics from companies on a regular basis. The firm collects data from early-stage companies on a monthly basis and on a quarterly basis for more mature companies in their portfolio. The five metrics Moxxie collects include: Revenue Runway Cash Spend Cash Balance Headcount Moxxie also includes a qualitative text block in their Request that provides companies with an opportunity to add additional context to their metrics, share any additional updates, or ask Moxxie for support on specific items. Alex shared that likes that the Visible platform sends him a notification each time a company submits a Request. He uses this as an opportunity to quickly identify any changes to the company’s performance. Alex shared “...anytime there’s something unexpected it’s a reminder to check in with the company.” Reports: Building a custom investment data report before an annual meeting Another key feature that Moxxie is utilizing is Visible’s report feature which allows Moxxie to pull together select metrics and investment data into a single table view. Moxxie has a fund summary for both Fund I and Fund II that includes: initial ownership %, total invested, total invested from a specific fund, and the initial valuation for each company. Moxxie initially created this report to prepare for an annual meeting with LPs. They wanted to see the numbers across all their portfolio companies, be able to download the figures, and then compute averages. Tear Sheets: Creating a clear overview of individual company performance Moxxie utilizes Visible’s dashboard templates to create custom Tear Sheets for each of their companies. Moxxie’s Tear Sheets incorporate elements of their original investment memo coupled with dynamic metrics and qualitative updates that change over time. Integrating company properties into Tear Sheets The static information in Moxxie's Tear Sheets is pulled directly from companies' profiles in Visible. The information that Moxxie includes in their Tear Sheets are: Company website url Latest valuation Co-investors Founders Company summary Why we invested Status Deal source Initial ownership Initial valuation Investment date Total invested Sector HQ location Year founded Integrated dynamic charts into Tear Sheets Moxxie also incorporates data visualizations into their Tear Sheets which are automatically updated as companies submit new information to Visible. The dynamic information Moxxie includes in Tear sheets is: Monthly KPI’s in a bar chart Runway vs Headcount in a bar chart Monthly spend vs cash balance in a bar chart Revenue forecast vs actual in a bar chart Update/progress since investment in a text widget Key metrics in a text widget Company-specific metrics in a text widget View Tear Sheet examples from Visible. Updates: Communicating portfolio performance with LPs on a quarterly basis Moxxie also leverages Visible’s Updates feature to send outbound communication to their LPs and the wider Moxxie community on a quarterly basis. The firm uses Visible’s Update feature instead of its previous Google Group as a way to consolidate its tech stack. Alex shares that he finds the open rates and viewing analytics helpful so he can understand how LPs are engaging with their regular communications. Conclusion Moxxie chose to move forward with Visible’s founder-friendly portfolio monitoring solution after hearing about Visible’s KPI tracking capabilities through a credible referral. By adopting Visible, Moxxie’s ad-hoc, manual portfolio monitoring processes have been transformed into a streamlined cadence for collecting structured updates from their companies. The firm previously stored outdated company summaries in Google Documents and now the Moxxie team leverages neatly organized Tear Sheets that auto-update when companies share new information. Over 400+ VC firms are using Visible to streamline their portfolio monitoring and reporting process.

Visible recently released Segment Metrics, a premium portfolio insights tool for VCs. The solution empowers investors to answer key questions about their portfolio performance in seconds instead of hours. How investors can unlock portfolio insights faster with Segment Metrics With Segment Metrics investors can find insights related to the sum, average, minimum, and maximum for any custom segment of their portfolio metric data and investment values. Example Segment Insights Examples of insights that can be uncovered with Segment Metrics include: The amount invested in female founders vs non-female founders The breakdown of investments based on sector, geography, and stage A comparison of revenue across seed-stage investments Investors can keep track of these insights by embedding the data visualizations on flexible, shareable dashboards in Visible as shown in the example below. Learn more about setting up Segment metrics in our Knowledge Base. Learn More About Visible Visible has a suite of tools to help with portfolio data analysis including Robust, flexible dashboards that can be used for Internal Portfolio Review meetings Portfolio metric dashboards to help with cross-portfolio insights Learn more about how 400+ Venture Capital investors use Visible to streamline their portfolio monitoring and reporting.

On October 8, 2023, California Governor Gavin Newsom signed into law Senate Bill 54. This law mandates that venture capital firms report the diversity of the founding teams in their portfolio to California’s Department of Civil Rights (DCR) annually. Why is Senate Bill 54 important? This law is the first piece of U.S. legislation aimed at increasing diversity within the venture capital industry which historically has allocated only 5% of capital to startups led by women, Black founders, or Latinx founders in any given year (source). When does Senate Bill 54 go into effect? The first report is due March 1, 2025. This means firms will be required to report accurate diversity data on investments they made during the 2024 calendar year by the start of March. Firms who do not comply may face a penalty as decided by the courts. Combine your firm’s diversity and portfolio KPI reporting processes with Visible. Which VC firms does Senate Bill 54 apply to? Senate Bill 54 applies to any VC that: Is headquartered in California. Has a significant presence or operational office in California. Makes venture capital investments in businesses that are located, or have significant operations, in California. Solicits or receives investments from a person who is a resident of California. Related Resource: California Adopts New Law Requiring VC Companies to Collect Diversity Data From Portfolio Company Founders What diversity information will be required? VC firms will be required to ask portfolio company founding teams to report their race, ethnicity, disabilty status, and sexual orientation. (Read the full requirements outlined in Senate Bill 54) Firms are required to make founders aware that this information is voluntary and founding teams will not be penalized for not reporting this formation. The information must also be collected in an anonymous fashion so that responses cannot be traced back to a founding team member. This information will be aggregated and reported to California’s Civil Rights Department (CDR) on an annual basis. Related Resource: 5 Actionable Steps to Improve Diversity at Your VC Fund Getting a head start on portfolio diversity reporting It’s important to make sure your firm has the internal capabilities to collect the required information from your portfolio companies before Senate Bill 54 goes into effect. Visible’s Request feature streamlines the way investors collect custom KPI’s and diversity information from their portfolio companies.

Did you know that 60% of investors don't hear from their portfolio companies on a regular basis? This means that the startups sending regular communications to their investors stand out the most. In fact, startups that provide regular investor updates are 3x more likely to receive follow-on funding. Making the time to write a compelling investor update regularly can be challenging for startup founders. This is where Visible AI Updates comes in. What is Visible AI Updates Visible AI Updates automatically turns Visible Request responses that portfolio companies submit to Visible into a narrative Update that startups can use to share with other investors and stakeholders. This equips founders to send regular, professional communications to all their greatest supporters (and sources of follow-on capital), with ease. Learn more about Visible AI updates and how you can leverage it with your Visible account below. How it Works Visible AI Updates is available to founders who are completing Visible data Requests from their investors. Using the metrics and qualitative answers from a data Request, Visible AI Updates adds context and builds charts to turn the information into a Visible Update that can be shared with other investors and stakeholders. Visible AI Update Example Using the qualitative answers and data included in your Request, we’ll help you turn the response into an Update using the following logic: “{Company Name} Investor Update” — For example, “Acme Co Investor Update” In order to create the content of the update we built a prompt for OpenAI that contains questions and answers from the request. We will create charts and tables for any metrics using the following logic: If a metrics question contains >3 metrics we will create a single table with all these metrics within the update Otherwise, we create bar charts for each metric in the question. Note: if a metric only has a single data point we will create a number chart instead. As always, we recommend reviewing your Update and making sure all of the content is correct and fits your voice. You can check out the full example of the Update here. Visible AI Updates Takeaways Providing investor updates regularly increases your likelihood of success and your ability to fundraise Visible AI transforms your Requests responses into a professional narrative update that you can share with all your stakeholders The Future of Visible AI This is our first introduction of AI into the Visible platform. In the months ahead we plan on exploring AI models to help with fundraising email copy, identifying potential investors for your business, and more. We are always looking for feedback. Feel free to share your AI-related ideas to support at visible dot vc.

Sending investor updates is a surefire way to tap into your current (or potential) investors' knowledge, capital, and experience. Investor updates keep your company top of mind and improve your odds of getting help with fundraising, hiring, strategy, and other issues that arise as a founder. However, sitting down and writing an update can be challenging for many founders. By leveraging AI, you can get over the cold start problem and get a head start on your next update with just a few data points. Integrating ChatGPT can further enhance the reporting process by adding depth, analysis, and narrative context to the raw metrics. Here’s how founders can do it. Related Resource: AI Meets Your Investor Updates Data Preparation Begin by exporting the key metrics and data points you want to share from Visible. This could include charts, graphs, or tables related to sales, customer growth, churn rate, financials, etc. Ensure your data is well-organized and accurate so you can share the results with your generative AI model of choice. Have specific numbers on hand for quick reference, such as revenue growth, churn rates, user acquisition costs, etc. Prompt Tips Review & Personalize Take the insights and analysis from ChatGPT and integrate them into your investor update. Adjust the language or depth of analysis to match the preferences and knowledge levels of your investors. Incorporate Visuals Visible already offers compelling visual data representation. Ensure that the written context provided by ChatGPT complements these visuals. For instance, a chart showing revenue growth coupled with a ChatGPT-derived narrative can provide a comprehensive view of financial health. Fact-Check & Verify Always double-check AI-generated content for accuracy. Ensure that the insights and interpretations align with your understanding and are factually consistent with the data from Visible. Feedback Loop After sending out the investor update, gather feedback. This will help you adjust the depth, tone, and content for future communications. By integrating ChatGPT's narrative capabilities with Visible's data representation, founders can create rich, insightful, and highly contextual investor updates that not only inform but also engage stakeholders in meaningful ways. Related resource: How AI Tools are Reshaping Venture Capital: Tools to Know Benefits of Using ChatGPT for Investor Updates Utilizing ChatGPT or other advanced AI language models can significantly enhance the process of crafting investor updates in several ways: Data Interpretation Insightful Analysis: AI can quickly process and analyze large datasets, highlighting important trends, anomalies, and patterns that might be missed with manual analysis. Contextual Comparison: By comparing your metrics with known industry benchmarks or historical data, AI can provide contextual insights into the company's performance. Narrative Creation Cohesive Storytelling: ChatGPT can help craft a narrative around raw data, turning numbers into a compelling story that communicates the company's journey, challenges, and triumphs. Consistent Tone: AI ensures that the tone of the update remains consistent throughout, whether it's formal, friendly, or somewhere in between. Time Efficiency Quick Turnaround: Drafting updates can be time-consuming. ChatGPT can rapidly generate well-structured drafts based on provided data, which founders can then review and adjust as necessary. Multi-version Generation: AI can generate multiple versions of an update, tailored to different investor personalities or preferences. Content Suggestions Comprehensive Reporting: AI can suggest relevant content to include, ensuring that critical aspects are not overlooked. This might include operational updates, financial highlights, or market trends. Personalized Updates: ChatGPT can generate updates tailored to specific investor groups or individual stakeholders based on their interests or investment focuses. Error Reduction Grammar & Syntax: ChatGPT ensures that the language used is grammatically correct and professionally composed. Fact-Checking: While AI isn't a replacement for manual fact-checking, it can help identify inconsistencies or potential errors in data presentation. Feedback Analysis Interpret Responses: If founders receive feedback or questions from investors, ChatGPT can help interpret and suggest appropriate responses or clarifications. Iterative Improvement: By analyzing feedback over time, the AI can refine the style and content of updates to better meet investor expectations. Scalability Handling Volume: For founders managing multiple ventures or reporting to a large number of stakeholders, ChatGPT can scale the update creation process without sacrificing quality. Template Generation Standardized Reporting: ChatGPT can help create templates for regular updates, ensuring consistent reporting structures while still allowing for customization based on the period's specifics. While ChatGPT and similar AI models offer numerous advantages in crafting investor updates, it's crucial for founders to remain actively involved in the process. The authenticity of the founder's voice, combined with the analytical power of AI, can create powerful and impactful communications. Prompts for Crafting an Investor Update with ChatGPT There are a few ways to approach ChatGPT as a source to help with your investor updates. Individual Section Prompts On one hand, you can enter each individual update section into ChatGPT and use a prompt for each section. For example, let’s say you have the following highlights from the last month: Hired 2 new sales reps — Brett & Amanda Grew 50% quarter over quarter to hit $1M in ARR Launched Big Product X You can enter the above into a prompt like this example "Briefly recap our company's highlights..." and carry on with this approach for each individual section of your update. Check out the most common content sections in Visible Updates below: One Prompt On the other hand, you can take any individual data points, qualitative or quantitative, from the previous period and enter them into ChatGPT with a prompt like the following: "Turn the following into an investor update with additional context around the month-over-month KPI data and an intro of 40 words or less [Copied in Update Contents]" Before ChatGPT Using the prompt above, we took the follow update points and turned it into an Update Highlights Hired 2 new sales reps — Brett & Amanda Grew 50% quarter over quarter to hit $1M in ARR Launched Big Product X Lowlights Blake, our lead developer, has quit KPIs Product Launches Big Product X has been a success. We have signed up 1,000 users in the first week and $10,000 in revenue Asks We are looking for users for Big Product X. Ideally they are a marketing professional with a team of 5 or more Looking for a lead developer that is based in Chicago with 8+ years experience Fundraising Efforts We are kicking off our seed round. Need intros to SaaS, Seed stage investors in midwest. Thank Yous Thanks to Kelley from Venture Fund X for making introductions to Big Company Y, our biggest customer yet. After ChatGPT In October, our journey marked significant achievements amid a few challenges. Let's delve into the details: Highlights Team Expansion: Welcomed Brett & Amanda to our sales team, enhancing our capabilities. Impressive Growth: Achieved a 50% QoQ growth, hitting $1 million in Annual Recurring Revenue. Product Success: The launch of Big Product X was a triumph, securing 1,000 users and $10,000 in revenue within a week. Lowlights Talent Loss: Unfortunately, our lead developer, Blake, departed. KPIs - A Closer Look September 2023: Revenue: $100,000 Cash Balance: $1,000,000 Gross Profit: -$10,000 Headcount: 12 October 2023: Revenue: $150,000 Cash Balance: $1,100,000 Gross Profit: $100,000 Headcount: 14 Asks User Acquisition: Seeking users for Big Product X, particularly marketing professionals with a team of 5 or more. Talent Search: In pursuit of a lead developer based in Chicago with 8+ years of experience. Fundraising Efforts We are launching our seed round and would greatly appreciate introductions to SaaS and seed-stage investors in the Midwest. Thank Yous Our heartfelt thanks to Kelley from Venture Fund X for the introductions that led to Big Company Y becoming our largest customer to date. Your continued support is invaluable, and we look forward to sharing more accomplishments in the months ahead. Sincerely, [Your Name] [Your Title] [Your Contact Information] Learn More About Visible Updates With Visible you can find investors, send monthly Updates, share your pitch deck, and manage relationships with our CRM. Give Visible a free try for 14 days here.

For those aspiring to venture into the dynamic world of SaaS, we’ve created this guide with a step-by-step roadmap bridging the gap between vision and execution. From the initial stages of ideation, emphasizing the significance of addressing genuine challenges, to the detailed processes of devising your business plan and selecting an appropriate structure, each step is crucial. We’ll also cover the importance of a user-first approach, effective pricing methodologies, and strategic brand positioning, along with KPI’s and important metrics to track. What Makes a SaaS Company Successful Every enterprise, regardless of its niche, thrives on certain foundational pillars. When it comes to SaaS, these pillars not only determine its initial breakthrough but also its long-term viability. So, what makes a SaaS venture stand out? Prioritizes Customer Success For SaaS companies, customer success isn’t merely about meeting expectations—it’s about exceeding them. Given the subscription-based model of SaaS businesses, retaining customers is paramount. By ensuring that users derive continuous value from the software, successful SaaS companies bolster loyalty, reduce churn rates, and increase lifetime customer value. They invest in excellent onboarding processes, ongoing customer support, and regular feedback loops to adapt and improve. The SaaS Company Understands Their Market A deep understanding of the market is the bedrock of any successful enterprise. For SaaS companies, this translates into recognizing not only who their ideal customers are but also their pain points, desires, and how the product fits into the larger industry ecosystem. By consistently aligning product development with market demand, these businesses ensure that they remain relevant and competitive. Grows at a Steady Pace While rapid growth might seem attractive, it can sometimes lead to unsustainable practices or missed opportunities to solidify the product-market fit. The most successful SaaS companies focus on steady, scalable growth. This approach ensures that as the company expands, it remains adaptable, maintains high service quality, and continues to meet its users’ evolving needs. Is Starting a SaaS Company Without Technical Skills Possible? Venturing into the realm of SaaS might seem intimidating, especially if you’re not armed with coding skills or a tech background. However, the truth is that while technical know-how is undeniably advantageous, it’s not an absolute requirement. Many successful SaaS founders started with a vision, a clear understanding of their market, and the drive to solve a pressing problem. Partnering with technical experts, outsourcing development, or leveraging no-code platforms are just a few routes one can take. Remember, at the heart of every great SaaS product is a solution to a genuine problem; if you can identify and address that, the technicalities can always be managed. 12 Steps for Building a Succesful SaaS Company While understanding the core principles behind a successful SaaS venture is vital, actionable steps are what transform that understanding into a thriving business. Here is a 12-step roadmap to establish your very own SaaS company. 1) Build a Product That is a Solution to a Common Problem The most successful SaaS products are not just software; they are solutions to pervasive problems that users face. Starting with a problem-first approach ensures that there’s a genuine demand for your product. Instead of convincing users to adapt to your software, you’re providing a tool they’ve been actively seeking. This positions your product as essential rather than optional. Real-Life SaaS Example For instance, imagine if workplaces had to juggle multiple platforms for every communication need. It would be chaotic and inefficient. This is precisely the problem Slack aimed to solve. Before its introduction, many teams relied on a patchwork of emails, texts, and various apps for communication. Slack provided a centralized platform where teams could seamlessly chat, share files, and integrate other tools, making team communication coherent and streamlined. Their problem-first approach is a significant reason for their widespread adoption and success. 2) Decide on a Name for Your Company The name of your SaaS company is not just a label; it’s the first impression, the identifier, and often, the first interaction a potential user has with your brand. A well-chosen name can set the tone for what customers can expect, reflect the essence of your software, and play a role in your brand’s memorability. Conversely, a hastily picked or misaligned name can create confusion or even deter potential users. Given its significance, naming your company is a decision that warrants careful consideration. Tips for Choosing a Company Name: Simplicity is Key: Choose a name that’s easy to spell, pronounce, and remember. Complex names can make it difficult for potential users to search or pronounce when talking about your product. Relevance: Ensure the name resonates with the solution your product provides or the problem it addresses. It doesn’t have to be overly descriptive, but some level of relevance helps. Check Domain Availability: In the digital age, your online presence is paramount. Before settling on a name, make sure the domain is available. A .com or .io is often seen as the most professional, but with the possibility of other domain extensions, you can also get creative. Visible has chosen .vc and AI companies often use .ai. Avoid Copying Competitors: Your company name should stand out and not be easily confused with existing SaaS products. A distinct name can help avoid legal issues and distinguish your brand in the market.- Scalability: Think long-term. Choose a name that won’t pigeonhole your company if you decide to expand or pivot your product offerings in the future. Solicit Feedback: Once you have a shortlist of potential names, seek opinions from colleagues, potential customers, or mentors. Their perspectives can provide insights you might have overlooked. Remember, while a name is significant, it’s the value and utility of your software that will ultimately define its success. The name is the hook, but the product is the substance. 3) Create a Business Plan or Write a Lean Plan Every successful venture starts with a blueprint—a comprehensive strategy that outlines the company’s objectives, methods to achieve those objectives, potential pitfalls, and ways to mitigate them. This blueprint is known as a business plan. However, in the fast-paced world of SaaS, sometimes a traditional business plan can be overly detailed. In such cases, a Lean Plan, which is a distilled version of a business plan, might be more appropriate. Both provide clarity, focus, and a roadmap, but they differ in depth and detail. How to Write a Business Plan: A business plan is a detailed document that provides an in-depth analysis and strategy for your SaaS venture. Here’s what it typically includes: Executive Summary: A brief overview of your company, including the mission statement, product description, and basic information about your company’s leadership team, employees, and location. Market Analysis: Detailed research on the industry, market size, and your competitors. This should outline who your target customers are, what they need, and how your product addresses those needs. Organization & Management: A breakdown of your company’s organizational structure, details about the ownership, profiles of your management team, and the qualifications of your board of directors. Product Line: Detailed descriptions of your product or service, including information on the product’s lifecycle and intellectual property rights. Marketing & Sales: Your strategy to attract and retain customers—this could be through online marketing, partnerships, or traditional advertising. Financial Projections: Forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets for the next five years. Appendix: Any additional information, graphics, or charts that supplement your business plan. How to Write a Lean Plan: A Lean Plan is a concise, dynamic document (typically one page) that highlights the essential components of your business without going into minute details. It’s particularly useful for startups looking to iterate rapidly. Here’s what it covers: Value Proposition: A clear statement describing the problem you’re solving, the solution, and the target customers. Key Partnerships and Resources: Who will you be working with, and what are the essential tools and resources for your business? Channels: How will you deliver your product to your customers? Customer Segments and Relationships: Who are your primary customers, and how will you interact with them? Revenue Streams: How will you make money? This can include subscription models, licensing, or affiliate partnerships. Cost Structure: A breakdown of the major expenses and where resources will be allocated. The choice between a business plan and a lean plan will depend on your specific needs, the nature of your SaaS product, and the stage of your startup. Both are invaluable tools, but the lean plan’s flexibility makes it more suitable for businesses that anticipate frequent changes and rapid iterations. Related resource: The SaaS Business Model: How and Why it Works 4) Choose Your Business Structure Selecting the appropriate business structure is pivotal. This choice influences your day-to-day operations, how much you pay in taxes, your ability to raise funds, the paperwork you need to file, and your personal liability. Each business structure comes with its own advantages and disadvantages, and the ideal choice will depend on your company’s unique needs, your business goals, and your personal preferences. Should You Form an LLC? An LLC (Limited Liability Company) is a hybrid business entity that blends elements of partnerships and corporations. Here’s what you should know: Liability: One of the primary benefits of an LLC is that it offers limited liability protection to its members. This means personal assets, like your home or car, typically aren’t at risk if the LLC faces debts or lawsuits. Flexibility: LLCs offer flexibility in management and don’t require a board of directors or annual meetings. Taxes: Profits and losses pass through the business to the members, who report this information on their personal tax returns. This avoids the “double taxation” faced by corporations. Decision: If you’re looking for liability protection, taxation flexibility, and less rigid formalities, an LLC might be right for you. It’s especially favored by smaller SaaS startups. Related resource: Fobes: Best LLC Services Of 2023 Should You Form a Sole Proprietorship? A Sole Proprietorship is the most straightforward business structure, best suited for solo founders. Control: As the sole owner, you have complete control over the business decisions. Taxes: Income from the business is treated as personal income, and you’ll be responsible for all the taxes. There’s no distinction between the owner and the business. Liability: The major downside is unlimited personal liability. If the company incurs debts or is sued, your personal assets can be at risk. Decision: If you’re starting a small SaaS business on your own and are comfortable with the risks, a sole proprietorship might be a good fit. However, due to the liability concerns, many solo founders eventually transition to an LLC or corporation as the business grows. Related resource: Sole Proprietorship: What It Is, Pros & Cons, Examples, Differences From an LLC Should You Form a Corporation? A Corporation is a more complex business structure that treats the business as a distinct entity separate from its owners. Liability: Shareholders (the owners) have limited liability. This means their personal assets are protected from company debts or legal actions. Taxes: Corporations face “double taxation.” The corporation itself pays taxes on profits, and shareholders also pay taxes on the dividends they receive. Raising Capital: Corporations can raise capital more easily by issuing stocks. This is often necessary for large-scale SaaS ventures that require significant investments. Formalities: There are more rigid requirements, like having a board of directors, annual general meetings, and more extensive record-keeping. Decision: If you plan to scale your SaaS company significantly or anticipate raising a lot of capital through investors, a corporation might be the best choice. It’s a common structure for larger startups aiming for significant growth or an eventual IPO. The choice of business structure will significantly impact your SaaS company’s operations and growth potential. It’s essential to consult with legal and financial professionals to determine the best fit for your specific situation. 5) Test Your SaaS Idea: Will this Product Disrupt the Market? Before diving headfirst into development and scaling, it’s imperative to validate your SaaS idea. The last thing you want is to invest time, resources, and money into a product only to realize there isn’t a sizable market demand for it. Engaging potential customers in conversations and conducting a competitive analysis will help you ascertain the potential of your idea and identify any gaps in the market or areas for improvement. Chatting with Customers: This is your direct channel to understanding the needs, pains, and preferences of your target audience. By engaging with potential customers, you can get feedback on: Features they deem essential. The price they’re willing to pay. The challenges they face with current solutions. These conversations can guide product development, pricing strategies, and marketing approaches. Competitive Analysis: This helps you gauge the current market landscape. Who are the major players? What do they offer? Where do they fall short? How can your product fill the gaps or provide a better solution? Understanding your competition can give you a strategic edge and help refine your unique value proposition. How to Conduct a Competitive Analysis Study: List Down Competitors: Start by identifying your direct competitors (those offering a similar solution) and indirect competitors (those solving the same problem but through a different method). Analyze Product Features: Break down the features of each competitor. Identify where they excel and where they lack. Customer Reviews: Dive into customer reviews on platforms like Capterra or G2 Crowd. These can provide insights into what users love and what frustrates them about existing solutions. Pricing Structures: Understand the pricing models of competitors. Are they subscription-based? One-time purchase? Freemium? This can help you position your product competitively. Brand Perception: How do competitors market themselves? What’s their messaging? Understanding their brand perception can help you differentiate and position your product. SWOT Analysis: Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each competitor to have a holistic view of the competitive landscape. Pro Tip: Use tools like SEMrush or Ahrefs to analyze competitors’ online strategies. These tools can reveal keywords they rank for, their content strategy, backlink profiles, and more. Leveraging this information can give you a competitive edge, especially in your digital marketing efforts. By taking the time to validate your idea and understand the competitive landscape, you set the stage for a product that not only meets market needs but has the potential to disrupt and innovate within its space. 6) Create a Pricing Model for Your Service The pricing model for your SaaS product isn’t just about determining a number; it’s a strategic decision that can influence your brand’s positioning, perceived value, and revenue streams. Too low, and you might be undervaluing your service or not covering costs, leading to financial strain. Too high, and you might deter potential customers. A well-considered pricing strategy ensures that you’re offering value to your customers while also achieving profitability. How to Determine Price for Your Service: Cost-Based Pricing: At the most fundamental level, you need to cover your costs. Calculate the total cost of delivering your service, including development, hosting, support, marketing, and any other overhead. Ensure that the price you set covers these costs and leaves room for a healthy margin. Value-Based Pricing: Understand the value your service provides to your customers. If your software can save a company $50,000 a year in operational costs, they might be more than willing to pay $10,000 a year for it. Competitor Analysis: As discussed earlier, knowing what your competitors charge can provide a ballpark figure. If your software offers more features or better support, you might be able to charge a premium. Conversely, if you’re entering a crowded market and want to penetrate quickly, undercutting might be a viable strategy. Tiered Pricing: Offer multiple packages with different feature sets. This can cater to a broader range of customers, from small businesses to large enterprises. For instance, a basic package might offer core features, while a premium package might include advanced analytics or priority support. Freemium Model: Provide a basic version of your service for free and charge for advanced features or more extensive usage. This can be a way to get users in the door and upsell them later. Pilot Testing: Before finalizing your price, consider doing a soft launch or pilot test. Offer your service to a select group at a discounted rate in exchange for feedback. This can provide real-world insights into what customers are willing to pay. Feedback and Adjustments: Pricing isn’t static. Periodically gather feedback, monitor how your pricing affects sales, and adjust accordingly. Markets, competitors, and costs change, and your pricing strategy should be flexible enough to evolve. Your pricing model is more than just a figure—it’s a reflection of the value you provide, the market you operate in, and the strategy you adopt. Approach it thoughtfully, and be prepared to iterate as you gather more data and insights. 7) Gather Customer Feedback & Focus on User Experience The road to a successful SaaS company is not paved solely by a great product idea. It’s continuously refined by listening to your users and iterating based on their feedback. In the realm of software, a small usability hiccup can be the difference between a delighted customer and a frustrated one who churns. Emphasizing customer feedback and a stellar user experience (UX) is paramount in ensuring that your SaaS product isn’t just functional, but also enjoyable and intuitive. Why User Experience is Important: First Impressions Matter: A user’s initial experience with your software can set the tone for their entire relationship with your product—and by extension, your brand. A well-designed, intuitive user interface can make users feel empowered, while a clunky, confusing one can lead to frustration. Reduction in Support Costs: A software that’s easy to use and navigate can significantly reduce the volume of support queries and tickets. This not only reduces operational costs but also leads to happier customers. Increased Retention Rates: Retaining customers is often more cost-effective than acquiring new ones. A great UX can lead to increased user satisfaction, resulting in higher retention rates. Enhanced Credibility and Trust: A polished, professional user interface can enhance your product’s credibility. Users are more likely to trust and continue using a product that appears well-designed and user-centric. Boost in Referrals: Delighted users are more likely to recommend your software to peers. Word-of-mouth referrals, often spurred by an exceptional user experience, can be a potent channel for organic growth. Feedback Loop: By actively seeking and implementing user feedback, you demonstrate that you value and listen to your customers. This not only helps improve your product but also fosters a deeper connection between users and your brand. Market Differentiation: In a crowded SaaS market, a superior user experience can set you apart from competitors. While features and pricing play a role, the ease and pleasure of using a software can be a significant differentiator. User experience is the backbone of user satisfaction. By focusing on UX and actively seeking customer feedback, you position your SaaS product to not just meet user needs but to exceed their expectations. This proactive approach can lead to higher loyalty, increased referrals, and a strong market position. 8) Establish Your Brand & Make it Stand Out In the vast sea of SaaS products, establishing a strong brand identity is crucial for recognition, recall, and emotional connection with your target audience. Your brand is more than just a logo or a catchy tagline; it’s the cumulative experience that customers have with your company, your product, and even your content. A well-crafted brand evokes trust, differentiates you from competitors, and gives potential users a clear sense of what you stand for and what they can expect. Ways to Differentiate Your Brand from Your Competitors: Unique Value Proposition (UVP): Clearly define what sets your SaaS product apart. Is it unmatched customer support? Groundbreaking features? Exceptional affordability? Your UVP should be front and center in your branding and marketing efforts. Visual Identity: Consistent use of colors, fonts, and design elements can make your brand instantly recognizable. This consistency should extend across your website, product interface, marketing materials, and social media platforms. Brand Voice and Personality: Whether it’s professional, playful, or somewhere in between, the tone and style of your content can give your brand a distinct voice. This includes everything from website copy and blog posts to email campaigns and social media updates. Content Leadership: Sharing valuable content that addresses user pain points or industry trends can position your brand as a thought leader. This not only attracts potential users but also establishes trust and credibility. Community Engagement: Engaging with your user community through forums, social media, or user groups can help foster loyalty and give users a sense of belonging. This engagement can also provide valuable insights and feedback. Customer Success Stories: Showcase testimonials, case studies, and success stories. Real-world examples of how your product has benefitted users can resonate deeply with potential customers. Ethical Practices and Values: In an age where consumers are more conscientious about the brands they support, showcasing your company’s commitment to ethical practices, sustainability, or community involvement can make you stand out. Exceptional Customer Service: Often, the post-purchase experience is what users remember most. Offering stellar customer service can turn users into brand advocates. Continuous Innovation: Regularly updating your software with new features, improvements, or addressing pain points can show users that you’re committed to offering the best product possible. Interactive Branding Elements: Tools like quizzes, interactive infographics, or branded games can make your brand memorable and provide value at the same time. While the SaaS market is crowded, there’s always room for brands that resonate, provide value, and stand out. Differentiating your brand is not about being different for the sake of being different; it’s about genuinely understanding your target audience, what they value, and delivering that in a way that’s uniquely you. 9) Start Your Fundraising Journey Launching and scaling a SaaS company often requires capital – for product development, hiring talent, marketing, infrastructure, and other operational expenses. While some entrepreneurs manage to bootstrap their startups, many look for external funding to fuel their growth. The fundraising route you choose should align with your company’s goals, the stage of your business, and your personal preferences. Here’s a breakdown of popular fundraising options: Should You Pitch an Angel Investor? Angel Investors are affluent individuals who provide capital to startups in exchange for ownership equity or convertible debt. They often invest their own money, unlike venture capitalists who manage pooled funds from many investors, and limited partners (LPs). Pros: Flexibility: Angel investors, being individuals, might offer more flexible terms compared to institutional investors. Mentorship: Many angel investors are former entrepreneurs themselves and can provide valuable advice and connections. Speed: The process can be faster than traditional venture capital fundraising. Cons: Limited Funds: Angel investments are typically smaller than venture capital rounds. Due Diligence: As with all investors, angels will scrutinize your business model, which might extend the fundraising timeline. Should You Pitch Venture Capitalists? Venture Capitalists (VCs) are professional groups that manage pooled funds from many investors and LPs to invest in startups and small businesses. They typically come in when you have a proven business model and are looking to scale. Pros: Larger Investments: VCs can invest significant amounts, often millions, allowing for rapid scaling. Expertise and Network: Established VCs bring industry connections, mentorship, and expertise. Credibility: Securing VC funding can enhance your startup’s credibility in the market. Cons: Equity Sacrifice: VCs often ask for a considerable stake in your company. Loss of Control: With a significant stake, VCs might influence company decisions or direction. Pressure: VCs expect a return on their investment, often pressuring companies for rapid growth. Is Bootstrapping Right for Your Company? Bootstrapping refers to starting and growing a business without external investment or financing. Entrepreneurs rely on personal savings, revenues, or other organic sources to fund their venture. Pros: Full Control: Entrepreneurs retain complete control over their business decisions and direction. Ownership: No dilution of equity since you’re not bringing in external investors. Flexibility: You can pivot or change direction without external pressures. Cons: Limited Resources: Growth might be slower due to resource constraints. Financial Risk: Personal assets might be at risk if the business doesn’t succeed. Missed Opportunities: Lack of funds might mean missed market opportunities or being outpaced by funded competitors. The fundraising path you choose is a strategic decision. It’s essential to weigh the pros and cons of each option, considering both the immediate needs and long-term vision for your SaaS company. Remember, the goal is not just to raise funds but to build a sustainable and successful business. 10) Develop or Start Building Your Service While a solid idea and funding are foundational, they’re just the beginning. The heart of your SaaS venture is the service itself. At this step, you bring your vision to life, transforming concepts and wireframes into functional, user-friendly software. This stage requires meticulous attention to detail, continuous collaboration between teams, and an unwavering commitment to user needs. Best Practices for Building Your Service: Start with MVP (Minimum Viable Product): Begin with a simplified version of your service that incorporates the core features. This allows you to test the market, gather feedback, and iterate before investing more time and resources. Prioritize User-Centered Design: Ensure your service is designed with the end-user in mind. Prioritize intuitive navigation, clear call-to-actions, and an aesthetically pleasing interface. Continuous Testing: Regularly test your software for bugs, performance issues, and usability hiccups. This includes unit testing, integration testing, and user acceptance testing. Adopt Agile Development: Using agile methodologies allows for iterative development, regular feedback loops, and the flexibility to pivot when needed. Invest in Security: Ensure that your software is secure and compliant with relevant regulations. Regularly update and patch your systems, and consider third-party security audits. Cloud Integration: Consider building your service to be cloud-compatible, ensuring scalability, and reducing the need for significant infrastructure investments. Feedback Loop: Keep channels open for user feedback even during development. This ensures that any design or functional misalignments are caught early. Documentation: Maintain thorough documentation for your service, both for internal use (for developers and support teams) and external use (for users). This aids in training, troubleshooting, and user onboarding. Stay Updated with Tech Trends: The tech landscape is ever-evolving. Be open to adopting new tools, technologies, or methodologies that can improve your service’s functionality or user experience. Collaborative Approach: Foster a collaborative environment where designers, developers, marketers, and other stakeholders frequently communicate and align on objectives. Building your SaaS service is an exciting, dynamic process. It’s where vision meets reality. By following best practices and maintaining a user-centric focus, you can ensure that your service not only meets but exceeds market expectations. As you roll out your service, remember that continuous improvement, based on real-world feedback and technological advancements, will be key to long-term success. 11) Create a Go-To-Market Strategy The culmination of your ideation, development, and preparation efforts rests heavily on the effectiveness of your go-to-market (GTM) strategy. This is the blueprint that will guide how you introduce your SaaS service to the market, acquire customers, and scale your business. Without a well-thought-out GTM strategy, even the most innovative product might struggle to gain traction or achieve its potential. What is a Go-To-Market Strategy? A go-to-market strategy is a comprehensive action plan that outlines how a business will sell its products or services to customers. It defines the target audience, details the value proposition, and lays out the sales and marketing tactics the company will employ to achieve its goals. In the SaaS realm, a GTM strategy is especially vital given the competitive nature of the market and the unique challenges and opportunities presented by software subscription models. How to Create a Go-To-Market Strategy: Define Your Target Audience: Understand who your ideal customers are. Create detailed buyer personas based on demographics, job roles, pain points, and purchasing behavior. Clearly Articulate Your Value Proposition: Clearly define what sets your SaaS product apart from competitors. What problem does it solve? Why should customers choose your product? Choose Your Distribution Channels: Decide where and how you’ll sell your product. This could be through a direct sales team, digital channels, partnerships, or a combination of multiple channels. Pricing Strategy: Based on market research, competitors, and perceived value, decide on a pricing model. Will you offer tiered pricing, freemium models, or one-time licensing? Promotion and Marketing: Outline your marketing campaigns. This includes content marketing, PPC advertising, social media marketing, email campaigns, and more. Sales Strategy: If you’re using a direct sales approach, how will you structure your sales team? What will be their pitch? Will you use inbound or outbound sales strategies, or both? Customer Onboarding: Consider how you’ll introduce new users to your product. This could involve tutorials, webinars, documentation, or in-app guides. Feedback Mechanism: Ensure there’s a system for collecting feedback from early users. This will help in iterating and improving your product. Scale Strategy: Plan for growth. How will you handle increased demand? What’s the strategy for entering new markets or segments? Regular Reviews: Continuously review and refine your GTM strategy based on performance metrics, feedback, and market changes. Creating a compelling go-to-market strategy is a mix of art and science. It demands a deep understanding of your market, a clear vision for your product, and the agility to adapt as you learn from real-world execution. Remember, the landscape is dynamic, and while a GTM provides direction, it should never be set in stone. Flexibility and responsiveness to change are paramount to long-term success. 12) Determine KPIs to Measure Growth & Success While your SaaS product might be top-notch and your go-to-market strategy well-defined, without the right metrics to track progress, you’re navigating the expansive seas of business without a compass. Key Performance Indicators (KPIs) act as this compass, allowing businesses to measure, analyze, and assess the success of their operations and strategies. KPIs enable businesses to make informed decisions, rectify shortcomings, and capitalize on strengths. Related resource: Our Ultimate Guide to SaaS Metrics How To Calculate and Interpret Your SaaS Magic Number KPIs That Measure Success: Monthly Recurring Revenue (MRR): This is the total revenue your SaaS business can expect to receive every month. It’s a pivotal metric for any subscription-based service. Annual Recurring Revenue (ARR): A projection of your MRR over a year, providing insight into your yearly revenue from subscriptions. Customer Acquisition Cost (CAC): The average amount spent to acquire a new customer, encompassing marketing, sales expenses, and any other related costs. Lifetime Value (LTV): An estimate of the total revenue a business can expect from a single customer account throughout their subscription. Churn Rate: The percentage of subscribers who stop their subscriptions within a certain time frame. A lower churn rate is indicative of customer satisfaction and product viability. Net Promoter Score (NPS): A measure of how likely your customers are to recommend your product to others. A high NPS typically signifies high customer satisfaction. Active Users: This can be daily active users (DAU) or monthly active users (MAU). It helps gauge the engagement and stickiness of your product. Customer Retention Rate: The percentage of customers you retain over a specific period, excluding new customers. Sales Conversion Rate: The percentage of leads or potential customers who end up making a purchase or subscribing to your service. Average Revenue Per User (ARPU): The average revenue generated from each active user. It provides insights into how much value each user brings to the business. Feature Usage: A metric to identify which features of your SaaS product are most and least used. It’s invaluable for future development and iterations. Support Tickets & Resolution Time: The number of support tickets raised by users and the average time taken to resolve them, indicative of product stability and customer service efficiency. Establishing, tracking, and analyzing these KPIs provide a granular view of your SaaS company’s health, growth, and customer satisfaction. They act as early warning systems for potential problems and as validation of successful strategies. Ultimately, while there are many KPIs to consider, it’s crucial to focus on those most aligned with your business goals and objectives, ensuring that you’re always moving in the right direction. Start Your SaaS Fundraising Journey with Visible From ideation to development, and from market entry to growth measurement, building a successful SaaS company is a journey of many pivotal steps. Every phase holds its unique challenges and rewards. And while our guide has aimed to arm you with the foundational knowledge to navigate this voyage, one of the most crucial aspects is securing the necessary funding. Fundraising can be complex, but with the right partner, it can become considerably more manageable. That’s where Visible steps in. As a platform designed to streamline and optimize the fundraising process, Visible offers tools, insights, and connections that can be invaluable for budding SaaS entrepreneurs. Ready to kickstart your fundraising journey? Discover how Visible can be the partner you need in turning your SaaS vision into a reality. Try Visible for free for 14 days.

OpenView Ventures is back with its annual SaaS Benchmarks Survey & Report. Kyle Poyar of OpenView Ventures joined us to breakdown the report and what it means for founders. Check out the recording below: Webinar Overview Kyle Poyar of OpenView Ventures joined us on November 9th to take a deeper look at the 2023 OpenView Ventures SaaS Benchmark Survey with Kyle Poyar. Kyle is an Operating Partner where he helps portfolio companies fuel growth and become market leaders. He specializes in monetization, product-led growth (PLG), and SaaS metrics. A few topics you can expect us to hit on: SaaS Pricing Models Churn benchmarks AI adoption Financial performance

The volatility of the markets and decline in deal activity makes private valuation adjustments especially challenging this year. Yet even under these circumstances LP’s expect portfolio valuations to be accurate and justifiable. As a VC, you should be prepared for auditors to be even more involved during this year’s audit process as they ensure valuations are as close to reality as possible. Webinar Overview Belle Raab from Visible and Danielle Darley from Weaver discussed how to best prepare for your end-of-year audit. Discussion topics: What, why, who behind the audit process What to anticipate for this year's audit Preparing for the audit process Establishing an audit timeline Recommended do's & don'ts Related Resources: A Simple Breakdown of the VC Audit Process Venture Capital Valuations: Tips for Preparing Valuations for Your Annual Audit Five Simple Steps Key Venture Capital Staff Can Take to Support a Successful Audit Establishing a Valuation Policy

Market penetration can elevate a business to new levels by tapping into existing products in current markets. This article will delve into what market penetration is, how it’s calculated, and the optimal strategies to achieve it. Whether you’re a startup or an established enterprise, understanding market penetration can help enhance market share and drive success. What is Market Penetration? Market penetration is a business growth strategy where companies aim to increase their market share of existing products or services in existing markets. Market penetration is crucial for businesses looking to solidify their presence in an industry and build a robust customer base. This is done by selling more products or services to current customers or by finding new customers within existing markets. It can be achieved through various tactics like pricing strategies, advertising, sales promotions, and product improvements or innovations. The primary goal of this strategy is to increase market share, revenue, and customer loyalty within a market where the products or services are already available. The degree of market penetration can be an indicator of the brand’s popularity, business growth, and the level of risk involved. It’s crucial for evaluating the success of products and services in the market and is also a critical factor in developing effective marketing strategies and plans. Images source How is Market Penetration Calculated? Market Penetration is calculated to understand the existing sales or market share of a company in comparison to the total market potential. It provides insights into how much of the potential market a company has been able to capture. Formula for Market Penetration Rate Actual Market Size is the current market share or sales volume of the company. Total Addressable Market (TAM) represents the total sales revenue opportunity available for all companies in a particular market. Example: Let’s say a company sells 500 units annually in a market where 10,000 units are sold in total by all competitors. The Market Penetration Rate would be: This calculation implies that the company has captured 5% of the total market. Additional resources: Total Addressable Market Template– In order to help calculate your market share and your potential to build a large business, it helps to calculate and understand the total addressable market and sensitivity analysis. Check out our free total addressable market template below When & How to Calculate Market Share (With Formulas) Suggest Market Penetration Rate for Startups Once you’ve calculated the market penetration rate, it’s essential to analyze it in context. A high rate may indicate a strong market presence but may also suggest market saturation, limiting growth. A lower rate can point to significant growth opportunities, but it could also reflect poor market fit or strong competition. Companies often use market penetration metrics alongside other market analysis tools and industry benchmarks to develop effective market strategies and identify growth opportunities. For startups, achieving a market penetration rate of 2-3% is often considered commendable, and it can serve as a strong foundation for further expansion and growth. 8 Best Market Penetration Strategies To achieve greater market penetration, various strategies can be implemented. The selection depends on the business model, industry, and target audience. Below are eight effective market penetration strategies: 1) Dynamic Pricing Dynamic Pricing can be a powerful tool for companies looking to penetrate existing markets more deeply. It is a strategy where companies adjust the prices of their products or services in real-time, or near real-time, in response to market demands, competitor prices, and other external factors. This strategy can be pivotal in achieving higher market share in existing markets as it allows businesses to quickly adapt to market conditions and customer behaviors. By adjusting prices to meet market conditions and consumer expectations, businesses can optimize their sales and profits, attract more customers, and enhance their market share. However, it’s crucial to manage this strategy carefully to maintain customer trust and satisfaction. How It Works: Dynamic Pricing leverages advanced technologies and algorithms to analyze multiple factors that influence demand, including seasonality, competitor prices, inventory levels, and consumer behavior. Based on this analysis, prices are adjusted to optimize sales, revenue, or margins. Pros Maximizes Revenue: Enables businesses to adjust prices to meet demand, maximizing revenue during high demand and possibly stimulating sales during low demand. Competitive Advantage: Allows for real-time response to competitors’ pricing strategies, helping companies stay competitive in the market. Optimizes Inventory: Helps in managing inventory more effectively by increasing prices when stock is low or decreasing prices to move surplus inventory. Customer Segmentation: Offers the possibility to segment customers and offer different prices based on customer willingness to pay, optimizing revenue and customer satisfaction. Market Responsiveness: Provides the flexibility to quickly respond to market conditions like changes in demand or supply, ensuring optimal pricing at all times. Cons Customer Dissatisfaction: Customers may perceive dynamic pricing as unfair, especially if they find out they paid more for the same product or service than others, potentially leading to loss of trust and customer churn. Complex Implementation: Requires sophisticated software, algorithms, and expertise to analyze data and adjust prices accurately and effectively, which can be resource-intensive. Brand Image Risk: Frequent price changes, especially upward revisions, can lead to a negative brand image and accusations of price gouging. Price Wars: Can lead to destructive price wars with competitors, resulting in decreased profit margins for all market players. Legal and Ethical Considerations: In some industries and jurisdictions, there may be legal restrictions and ethical considerations around dynamic pricing, and violating these can lead to fines and reputational damage. 2) Adding Distribution Channels Adding distribution channels refers to the strategy of increasing the number of ways or locations through which customers can access and purchase a company’s products or services. By making products or services available through a variety of channels, companies can reach a broader audience, adapt to customer purchasing preferences, and ultimately increase sales and market share within existing markets. This strategy requires careful planning and management to ensure consistency in brand image and customer experience across all channels. Pros Increased Sales: Access to more customers through varied channels can lead to higher sales and subsequently, increased market share. Enhanced Market Coverage: More channels mean broader market coverage, enabling the business to reach different customer segments and geographic locations within the existing market. Customer Convenience: Providing multiple purchasing options caters to diverse customer preferences, potentially improving customer satisfaction and loyalty. Risk Diversification: Distributing through various channels reduces dependency on one, mitigating risks associated with the underperformance of a single channel. Brand Visibility: Presence across multiple channels enhances brand visibility and awareness, contributing to brand equity. Cons Complex Management: Managing multiple channels can be logistically complex and administratively challenging, requiring additional resources and efforts. Inconsistent Brand Image: Maintaining a consistent brand image and customer experience across varied channels can be challenging, potentially affecting brand perception. Channel Conflict: Different channels might compete against each other for the same customers, leading to potential conflicts and affecting relationships with channel partners. Reduced Profit Margins: Some channels might require price reductions or additional expenditures, such as commissions for third-party sellers, impacting profit margins. Customer Confusion: Offering products through too many channels, especially with varied pricing or promotional offers, can confuse customers and dilute the brand value. When adding distribution channels, companies need to strategically assess the potential impact on the brand, customer experience, and overall business operations. Proper integration, management, and consistent monitoring of all channels are crucial to addressing the challenges and reaping the benefits of this strategy. Balancing the added complexity with the potential advantages is key to successful implementation and sustainable growth in market penetration. 3) Geo-Targeting Specific Locations Geo-targeting specific locations involves tailoring your marketing and sales efforts to target customers in a specific geographical area or region. This technique is often utilized by businesses to focus resources on areas where they are likely to gain the most traction, allowing them to reach and serve customers more effectively and efficiently. Geo-targeting can be implemented using various tools and platforms like online advertising services, SEO, and social media, which allow businesses to specify the geographic locations they want to target. Additionally, analytics and data analysis can help in identifying the most lucrative regions to focus on. Pros Enhanced Personalization: Allows for more personalized and locally relevant marketing campaigns, improving engagement and conversion rates. Resource Optimization: Focuses resources and efforts on high-potential or high-performing regions, ensuring better utilization and improved ROI. Improved Customer Experience: Offering localized content, deals, and products caters to regional preferences and needs, leading to higher customer satisfaction and loyalty. Market Insight: Provides valuable insights into regional market trends, consumer behavior, and preferences, aiding in better decision-making and strategy formulation. Competitive Edge: Establishing a strong presence in specific locations can provide a competitive advantage, especially in areas with less competition. Cons Limited Reach: Focusing on specific locations might limit the overall reach of the business, potentially missing out on opportunities in other regions. Resource Intensity: Developing localized strategies and content can be resource-intensive and might require significant investment in research and adaptation. Market Variability: Different regions may exhibit varying demand patterns, requiring constant adjustments and refinements to the targeting strategy. Cultural Sensitivity: There’s a risk of misunderstanding local cultures and preferences, which might lead to ineffective or even offensive campaigns. Data Privacy Concerns: The use of location data can raise privacy concerns and regulatory issues, potentially leading to legal challenges and reputational damage. 4) Continuous Improvements of Products Continuous improvements of products refer to the ongoing effort to refine and enhance products based on customer feedback, market demands, technological advancements, or competitive dynamics. This strategy is crucial in market penetration as it helps in maintaining and enhancing the appeal of the products, addressing evolving customer needs, and staying competitive in the market. Pros Increased Customer Satisfaction: Addressing customer needs and resolving issues lead to higher satisfaction and loyalty. Enhanced Market Position: Ongoing improvements help in maintaining a competitive edge and solidifying market presence. Revenue Growth: Enhanced features and quality can justify higher pricing, leading to increased revenue. Brand Strengthening: Demonstrating commitment to excellence and innovation enhances brand reputation and equity. Cons High Costs: Constant refinement and development can be resource-intensive and costly. Overcomplication: Adding too many features or making too many changes can complicate the product, potentially alienating users. Customer Overwhelm: Frequent changes and updates can overwhelm and frustrate customers, especially if they are not well-communicated. Market Misalignment: Without proper market research, improvements may not align with actual customer needs, leading to wasted resources and missed opportunities. 5) Launch a New Product or Rebrand Launching a new product or rebranding refers to the introduction of a novel product or a significant transformation of existing brand elements, respectively, to appeal to the current market. This can be a pivotal market penetration strategy, aiming to renew consumer interest and address evolving market demands, preferences, and competition. Pros Increased Market Share: New or revitalized offerings can attract a wider audience and capture additional market segments. Enhanced Brand Image: A successful rebrand can modernize and elevate the brand’s image, improving perceptions and attractiveness. Revenue Growth: New products and improved brand image can drive sales and potentially allow for premium pricing. Adaptation to Market Changes: Enables the business to stay relevant and responsive to evolving market trends, demands, and consumer expectations. Cons High Risk and Uncertainty: The success of a new product or a rebrand is not guaranteed and may not resonate with consumers, leading to financial losses. Substantial Investment: Development, launch, and rebranding processes can be costly, involving substantial investment in research, marketing, and implementation. Potential Customer Alienation: Existing customers may react negatively to significant changes in products or brand identity, potentially leading to loss of loyalty. Implementation Challenges: Executing a rebrand or launching a new product involves logistical, operational, and strategic challenges, requiring meticulous planning and coordination. 6) Build Relationships With Business Partners Building relationships with business partners involves creating and nurturing mutually beneficial connections with other businesses, suppliers, distributors, or stakeholders in your industry. This strategy is crucial in market penetration as it can open up new avenues for growth, co-development, and expansion, allowing businesses to leverage collective resources, networks, and expertise to enhance market presence. Pros Expanded Reach: Access to partners’ networks and resources can significantly extend market reach and presence. Increased Innovation: Collaborative efforts can lead to innovative solutions and offerings, enhancing competitive advantage. Cost Efficiency: Sharing resources and responsibilities can lead to reduced operational costs and increased efficiency. Enhanced Learning: Exposure to partners’ expertise and insights can lead to valuable learning and growth opportunities. Cons Potential Conflicts: Divergent goals, values, or management styles can lead to conflicts and strains in partnerships. Dependence Risks: Reliance on partners can pose risks in case of disagreements, underperformance, or termination of partnerships. Loss of Control: Collaborations may require concessions and shared decision-making, potentially leading to loss of control over certain aspects of the business. Resource Diversion: Managing partnerships can be resource-intensive and might divert focus and resources from core activities. 7) Buy a Smaller Competitor in Your Industry Buying a smaller competitor, also known as acquisition, refers to purchasing another company to control its assets and operations. This market penetration strategy can be powerful, as it allows a company to quickly increase its market share, expand its product or service offerings, and eliminate competition. When considering acquiring a smaller competitor, thorough due diligence is paramount to assess the compatibility, valuation, and potential synergies accurately. A well-planned integration strategy, clear communication, and cultural alignment are crucial for realizing the full benefits of the acquisition and ensuring smooth transition and consolidation, thus enhancing market penetration and long-term success. Pros Rapid Market Expansion: Provides immediate access to new market segments, geographic areas, and customer groups. Enhanced Resources and Technologies: Acquisition brings in additional resources, technologies, and intellectual properties, enhancing overall capabilities. Cost and Revenue Synergies: Merging operations can lead to cost savings and additional revenue opportunities, increasing profitability. Strategic Positioning: Reducing competition and leveraging combined strengths can strengthen market positioning and dominance. Cons Integration Challenges: Merging different corporate cultures, systems, and operations can be complex and challenging. High Costs and Risks: Acquisition involves significant financial investment and carries risks of overvaluation and unanticipated complications. Potential Culture Clash: Differences in organizational cultures and management styles can lead to conflicts and employee dissatisfaction. Regulatory Hurdles: Acquisitions may be subject to stringent regulatory scrutiny and approval, potentially impacting the feasibility and timelines. 8) Provide a Rewards Program or Promotional Program Providing a Rewards or Promotional Program refers to offering incentives like discounts, points, or special offers to customers to encourage loyalty, repeat business, and attract new customers. These programs are instrumental in market penetration as they help in increasing product or service usage among existing customers and drawing in new clientele. When implementing rewards or promotional programs, it is important to balance the incentives with the overall business strategy and ensure that the programs are sustainable, beneficial, and aligned with brand values. A well-crafted and managed rewards program can be a powerful tool for market penetration, building long-lasting relationships with customers, and creating a competitive advantage in the market. Pros Increased Sales: By incentivizing purchases, such programs can drive up sales volumes and revenues. Customer Data Collection: These programs often involve collecting customer data, which can be analyzed to gain insights into consumer behavior and preferences. Enhanced Customer Satisfaction: Customers receiving rewards or benefits are likely to be more satisfied and have a positive perception of the brand. Effective Word-of-Mouth Marketing: Satisfied customers, especially those benefiting from rewards, are more likely to recommend the brand to others. Cons Cost Implications: Implementing and maintaining rewards programs can be costly, impacting profit margins. Customer Expectation Management: Customers may come to expect regular promotions, potentially impacting perceived value and full-price sales. Complexity in Management: Designing, managing, and optimizing rewards or promotional programs can be complex and resource-intensive. Risk of Decreased Perceived Value: Regular and extensive promotions can lead to a devaluation of the product or service in the eyes of consumers. Raise Funds and Penetrate Your Market With Visible Market penetration is a pivotal strategy for businesses aiming to enhance their market share in existing markets with existing or innovative products. Whether it’s through employing dynamic pricing, adding distribution channels, geo-targeting, continually improving products, launching new products or rebranding, forging business partnerships, acquiring smaller competitors, or providing compelling rewards or promotional programs, each strategy carries its unique set of advantages and challenges. The key is to meticulously analyze and integrate these strategies, aligning them with the overarching business objectives, customer needs, and market dynamics, to drive sustainable growth and success. Leveraging such multifaceted approaches can aid in navigating the competitive landscape, fostering customer loyalty, and achieving a robust market presence, propelling your business to new heights. And, to successfully penetrate the market, raising funds effectively is crucial—discover how Visible can assist in making your fundraising journey seamless and successful. Related resource: What is Internal Rate of Return (IRR) in Venture Capital

How to Start a Successful Tech Company Starting a Successful tech company can be an exciting journey filled with new learnings, discovery, and, of course, a few challenges along the way. In this article, we’ll explore some foundational elements that drive success and resilience within the tech industry. We will cover why a user-focused approach, starting small, prioritizing growth over immediate profit, and leading with innovation are critical steps in building a tech empire. As well, we’ll walk you through 11 pivotal steps, including assembling a dedicated team, creating a robust business plan, and establishing clear KPIs that will help in navigating the complex yet exciting landscape of the tech world. So, whether you are a rising entrepreneur or an established professional looking to make your mark in the tech industry, you’ll gain valuable insights and actionable strategies to ensure your tech venture not only survives but thrives in today’s competitive market. What Makes a Tech Company Successful? To build a thriving tech company, understanding the key components that drive success is crucial. These elements are the foundation upon which resilient and innovative tech companies are built. Successful Tech Companies Focus on the Users User-centric companies are more likely to succeed. By understanding and addressing the needs and preferences of the users, companies can build products and services that resonate with the target audience, fostering loyalty and encouraging word-of-mouth referrals. A relentless focus on delivering value to users can be the differentiator in a competitive market. This approach mandates companies to meticulously understand and address the needs, preferences, pain points, and expectations of their users, leading to the development of products and services that are highly resonant with their target audience. Here’s how a user-centric focus becomes a catalyst for success: Enhanced Customer Satisfaction: By creating solutions tailored to users’ needs and solving their problems, tech companies ensure high customer satisfaction, which can translate to loyalty, positive word-of-mouth, and repeat business. Product Relevance: Understanding users’ needs helps in developing products and features that are relevant and valuable to them. Iterative Improvement: A focus on users encourages companies to continually seek feedback and make iterative improvements to their products or services, ensuring that they evolve based on users’ changing needs and preferences. Competitive Differentiation: Companies that prioritize users can differentiate themselves in a saturated market, offering unique value propositions and user experiences that competitors might not offer. Market Expansion: Delighted users become advocates for the company, leading to organic growth and expansion through referrals and recommendations, allowing companies to penetrate new markets and customer segments with lower acquisition costs. Revenue Growth: Addressing the genuine needs and wants of users generally translates to higher adoption and usage rates, directly impacting a company’s bottom line and paving the way for sustainable revenue growth. Brand Equity: Providing value and consistent positive experiences will enhance brand image and reputation, which are invaluable assets for tech companies in establishing industry authority and attracting partnerships and investments. Informed Decision-Making: User feedback and insights lead to more informed business decisions, helping in aligning business strategies, resource allocation, and development efforts with user needs and market demands. Innovation Drivers: The constant quest to meet and exceed user expectations pushes companies to innovate continuously, exploring new technologies, methodologies, and solutions that can deliver enhanced value to users. Risk Mitigation: Understanding user preferences and expectations helps in identifying potential issues and addressing them proactively, reducing the risk of product failure and negative customer experiences. Most Successful Tech Companies Start Small Starting small allows companies to be agile, adapting quickly to market needs and changes. It also facilitates a deeper understanding of the target market, enabling more personalized and effective solutions. Small beginnings often lead to refined, scalable models that are more attuned to the market’s pulse. Related resource: The Do’s and Don’ts of Rapid Scaling for Startups Successful Tech Companies Lead and Don’t Follow Innovation is the heartbeat of successful tech companies. Leading tech companies distinguish themselves by breaking conventions and setting trends, shaping industries and consumer behaviors. Their commitment to innovation, willingness to embrace risk, and focus on proactive problem-solving allows them to chart new territories and redefine possibilities. By fostering a culture of innovation, establishing thought leadership, and driving industry evolution, these companies not only achieve unparalleled success but also contribute to the broader advancement of technology and society. Foster a Culture of Innovation: Leading tech companies nurture an environment that encourages creative thinking, exploration, and experimentation. This culture of innovation is pivotal in developing groundbreaking solutions and staying ahead of the curve. Employees are motivated to think outside the box, challenge the status quo, and seek transformative solutions, thereby contributing to the company’s visionary endeavors. Embrace Risk and Learn from Failures: The journey of innovation is fraught with uncertainties and risks. Successful tech companies are not afraid to take calculated risks and venture into the unknown. They view failures as learning opportunities, refining their approaches, and gaining insights that fuel further innovation. This resilience and learning mindset are crucial for navigating the volatile tech landscape and discovering untapped potential. Proactive Problem Solving: By proactively identifying and addressing problems, innovative tech companies create value and fulfill unmet needs. They employ foresight, research, and intuition to anticipate challenges and develop solutions that not only resolve issues but also enhance user experiences and quality of life. Establish Thought Leadership: Successful tech companies establish themselves as authorities in their respective fields by sharing knowledge, insights, and expertise. They engage with communities, participate in dialogues, and contribute to the industry’s intellectual capital. This thought leadership enhances their credibility, influence, and impact, paving the way for shaping industry trends and consumer behaviors. Drive Industry Evolution: Leading tech companies play a pivotal role in steering the direction of industry evolution. They introduce disruptive technologies, redefine business models, and influence industry standards and practices. By pushing boundaries and challenging conventions, they drive progress and transformation across sectors, fostering a more dynamic and inclusive tech ecosystem. Customer-Centric Innovation: Leading tech companies prioritize their customers in the innovation process. They actively engage with users to understand their needs, preferences, and challenges. By aligning innovation with customer insights, they ensure that their solutions are user-centric, relevant, and value-driven. 11 Steps for Building a Successful Tech Company Incorporating these critical success factors, the following steps provide a roadmap to launch a successful tech company. 1) Start With a Unique and Strong Idea An innovative idea is the cornerstone of a successful tech company. It should address a genuine need or problem, offering a unique solution that stands out in the market. Validate your idea through research and feedback to ensure it has potential. 2) Build an Efficient Team Starting With Technical Experts Assemble a dedicated team of skilled individuals who share your vision. Technical experts are crucial for developing a robust product, while diverse talents in marketing, sales, and operations contribute to a well-rounded business strategy. Related resource: How to Build A Startup Culture That Everybody Wants 3) Create a Business Plan A comprehensive business plan outlines the company’s vision, mission, target market, competitive landscape, financial projections, and operational plan. It serves as a blueprint for your tech startup, guiding you through each stage of development. What Should Be Included In the Business Plan Executive Summary Company Description Market Analysis Organization and Management Structure Service or Product Line Marketing and Sales Strategy Funding Requirements Financial Projections Related Resource: The Business Model Canvas “The Business Model Canvas is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model. This method from the bestselling management book Business Model Generation is applied in leading organizations and start-ups worldwide.” 4) Choose a Name for Your Startup Selecting a suitable name is crucial as it represents your brand and leaves a lasting impression on your audience. It should be memorable, easy to spell, and reflective of your company’s essence. How to Choose a Name for Your Tech Startup Brainstorm a list of potential names that align with your company’s vision and values. Use online tools to check availability and consider the relevance, pronounceability, and uniqueness of the name before making a final decision. Related resources & tools: Shopify’s Business Name Generator & Guide Namelix name generator The 8 Best Startup Naming Tools 5) Choose a Business Structure The right business structure impacts liability, taxation, and regulation compliance. Consider your business needs, goals, and the level of control you wish to maintain when deciding on the structure. Should You Form an LLC? An LLC (Limited Liability Company) combines the liability protection of a corporation with the tax benefits of a partnership. It’s suitable for those seeking flexibility and protection from personal liability. Should You Form a Sole Proprietorship? A sole proprietorship is the simplest structure, ideal for single-owner businesses. However, the owner is personally responsible for all debts and liabilities. Should You Form a Corporation? A corporation is a separate legal entity that offers the most protection against personal liability but involves more regulations and tax requirements. 6) Conduct Extensive Market Research Thorough market research informs product development, marketing strategies, and business decisions. It provides insights into market trends, competition, and customer preferences, enabling you to tailor your offerings and identify opportunities. Related resources: Hubspot: 20 Tools & Resources for Conducting Market Research Neil Patel:19 Market Research Tools To Uncover Actionable Insights 7) Build a Go-to-Market Strategy Building a meticulously crafted go-to-market strategy is paramount for tech startups aspiring to carve a niche in the competitive landscape. It serves as a strategic roadmap, guiding startups to position their innovations effectively, communicate compelling values, and reach the right audience with precision. A well-executed GTM strategy paves the way for sustained growth, market penetration, and lasting success in the dynamic tech ecosystem. Define Clear Objectives: Establish specific, measurable, achievable, realistic, and time-bound (SMART) objectives for your GTM strategy. These objectives could range from acquiring new customers, expanding market share, to increasing brand awareness. Clear objectives serve as a guiding light, providing direction and focus for all GTM activities. Identify Your Target Audience: Deeply understand who your ideal customers are. Consider demographics, psychographics, behavior, and needs. The more nuanced your understanding, the better you can tailor your approach, messaging, and solutions to meet their specific needs and expectations. Understand the Competitive Landscape: Analyze your competitors, their offerings, strengths, weaknesses, market position, and strategies. Understanding the competitive landscape enables you to identify your unique value proposition and differentiate your solutions effectively. Develop Value Proposition: Articulate the unique benefits and values your product offers to the customers. A compelling value proposition addresses customer pain points, provides solutions, and clearly communicates the unique advantages of choosing your product over others. Price It Right: Your pricing strategy should reflect the value you’re providing, the market demand, and what the market can bear. It’s crucial to consider various pricing models, evaluate competitors’ pricing, and understand your cost structure to set a price that’s attractive to customers yet profitable for you. Create Persuasive Messaging: Develop powerful, concise, and clear messaging that resonates with your target audience. Your messaging should address the needs and aspirations of your audience, highlighting how your product is the solution they’ve been looking for. Select Appropriate Channels: Determine the most effective channels to reach your target audience, whether they are online or offline. These could include social media platforms, email marketing, content marketing, trade shows, or direct sales. The choice of channels should align with where your audience spends their time and how they consume information. Design a Comprehensive Marketing Mix: Leverage a mix of promotional strategies, including advertising, public relations, content marketing, SEO, and social media marketing, to create awareness and generate interest in your product. A balanced and well-executed marketing mix optimizes reach and impact. Optimize Sales and Distribution: Define your sales approach, whether it’s direct sales, inbound marketing, channel sales, or a combination, and establish effective distribution channels to ensure your product is accessible to your customers. Align your sales and distribution strategies with customer preferences and behaviors. Implement, Monitor, and Adjust: Once your GTM strategy is in place, implement it meticulously, monitor its performance against the set objectives, and gather feedback. Use data-driven insights to adjust and optimize your strategy, ensuring it remains aligned with market dynamics and continues to drive desired outcomes. 8) Figure Out How to Scale Successful Efforts Scaling is not merely about growing bigger; it’s about growing smarter. By refining and fortifying successful strategies, optimizing resource allocation, and embracing innovation and flexibility, tech companies can scale their efforts efficiently, creating a ripple effect of sustained growth and market leadership. The intersection of diligent evaluation, strategic adaptation, and relentless pursuit of excellence is where tech companies find the momentum to rise above and reshape the technological frontier. Develop Scalable Systems and Processes: Building scalable systems and processes is crucial. Invest in technology and automation to streamline operations, reduce manual workload, and enhance efficiency. Establishing systems that can handle increased load and complexity ensures consistent service delivery as the company grows. Regular Analysis and Evaluation: Continuously assess your business strategies, marketing campaigns, and operational processes. Use analytics and performance metrics to determine what’s working and what’s not. Regular evaluations pinpoint successful efforts that can be amplified and optimized for better results. Resource Allocation and Management: Effective scaling requires meticulous resource management. Allocate your resources—time, personnel, and capital—where they yield the most impact. Prioritizing high-return activities and reallocating resources from less productive areas are essential for sustained growth. Diversify Product or Service Offerings: Identify new markets or segments where your products or services can have a significant impact. Diversification reduces dependency on a single revenue stream and opens up new opportunities for growth. Customer Retention and Expansion: Focus on retaining existing customers while acquiring new ones. Develop strategies to upsell and cross-sell to your current customer base. Satisfied customers often become advocates, facilitating organic growth through word-of-mouth referrals. Talent Acquisition and Development: Hiring and nurturing the right talent are vital for scaling. Bring in individuals with the skills, experience, and mindset that align with your company’s culture and growth objectives. Investing in employee development enhances capabilities and fosters a culture of continuous learning and innovation. Foster Partnerships and Collaborations: Build strategic alliances and partnerships with other organizations. Collaborations can provide access to new markets, technologies, and resources, enabling mutual growth and expanding your company’s reach and influence. Related resource: The 16 Best Startup Newsletters 9) Create a Fundraising Plan Fundraising is vital for fueling growth. Explore various options, considering the suitability, terms, and implications of each. Related resource: The Understandable Guide to Startup Funding Stages Should You Pitch an Angel Investor? Angel investors are affluent individuals who provide capital for startups in exchange for ownership equity or convertible debt. Angel investors, often heralded as the saviors of early-stage startups, inject not only much-needed capital but also bring valuable insights, expertise, and networks to the table, propelling nascent ideas into actionable, scalable ventures. They are suitable for startups that may be too risky for venture capitalists and too small for traditional lenders. Typically, angel investors are individuals with a keen sense of market dynamics and a willingness to take risks. They tend to invest in companies in their early stages when the venture is shaping its core idea, refining its product or service, and establishing market fit. The investments from angel investors are generally more flexible and personal, allowing room for negotiation and alignment with the startup’s unique needs and goals. Should You Pitch a Venture Capitalist? Venture capitalists manage pooled funds from many investors to invest in high-potential startups, fueling innovative startups with the substantial financial injections they often need to scale and expand. They are most suitable for companies that have moved past the ideation and product development stages and have proven business models showcasing significant growth potential and a path to profitability. Venture capitalists typically focus on high-growth markets and industries, seeking companies that can deliver exceptional returns on investment. Their involvement usually goes beyond mere financial investment; they also bring a wealth of experience, industry connections, and mentorship to help startups navigate the complexities of market expansion, talent acquisition, and corporate governance. The collaborative approach of VCs can help in refining business strategies, identifying new market opportunities, and establishing partnerships that can be pivotal for sustained growth and success. Is Bootstrapping Right for Your Company? Bootstrapping involves building your business using your resources, allowing you to retain control but requiring cautious financial management. While bootstrapping requires meticulous financial management and may present a slower growth trajectory initially, it can yield a robust, customer-centric business model marked by sustainable growth and resilience. For founders who value autonomy and are willing to navigate the initial challenges, bootstrapping can be a rewarding journey. 10) Market Your Company In today’s increasingly digital landscape, the significance of a multifaceted and dynamic marketing strategy cannot be overstated. Effective marketing goes beyond mere visibility—it is about creating meaningful engagements, building relationships, and fostering trust with your audience. It necessitates a holistic approach that combines various elements harmoniously, tailored to resonate with your target demographic. Developing a comprehensive marketing plan involves a meticulous understanding of your audience’s needs, preferences, and behaviors. It requires identifying the most effective channels and platforms to reach them, leveraging the potency of social media, email marketing, influencer collaborations, and online advertising to create impactful touchpoints. The integration of content marketing, enriched with value-driven articles, blogs, and multimedia content, can bolster your brand’s authority and drive organic traffic, aiding in building a strong brand presence. Search Engine Optimization (SEO) remains a crucial component of any marketing strategy. Optimizing your digital content for search engines can significantly enhance your visibility, driving sustained organic traffic to your platform. By focusing on relevant keywords, meta tags, and backlink strategies, you can improve your ranking on search engine result pages, increasing the likelihood of attracting potential customers. Partnerships, both strategic and collaborative, can be an invaluable asset in expanding your reach. By aligning with other brands, influencers, or platforms sharing a synergistic vision, you can tap into new audience segments, enhance brand credibility, and drive mutual growth. Joint ventures, affiliate marketing, and co-branding initiatives can create win-win scenarios, propelling brand awareness and user acquisition. Performance analytics and data-driven insights should guide your marketing endeavors, enabling a deeper understanding of your audience’s interactions and preferences. Regularly analyzing the effectiveness of your campaigns, engagement rates, and conversion metrics allows for continuous refinement of your strategies, ensuring that your marketing efforts remain aligned with your business objectives and are responsive to evolving market dynamics. User-generated content and customer testimonials can be leveraged to enhance authenticity and build trust. Encouraging your user base to share their experiences, reviews, and content can create a community around your brand, strengthening customer relationships and augmenting your brand’s image. Incorporating a blend of inbound and outbound marketing strategies can optimize reach and engagement. While inbound strategies focus on attracting customers through value-driven content, outbound strategies like targeted ads and email campaigns can proactively reach potential customers, enhancing brand recall and conversions. 11) Decide Which Metrics To Monitor Success Deciding which metrics to monitor is integral for steering the company in the right direction and making informed decisions. Established Key Performance Indicators (KPIs) act as a compass, indicating whether the business is on the path to achieving its goals. Besides the listed metrics, several other nuanced and contextual KPIs might be critical depending on the unique nature and needs of your business. KPIs That Measure Success Monthly Active Users (MAUs) Customer Acquisition Cost (CAC) Lifetime Value (LTV) Conversion Rate Retention Rate Revenue Growth Rate Each KPI serves a specific purpose. For instance, Monthly Active Users (MAUs) gauge the level of user engagement and the overall health of the product, while Customer Acquisition Cost (CAC) helps in assessing the efficiency and effectiveness of your marketing strategies. Monitoring Lifetime Value (LTV) aids in understanding the long-term value of a customer relative to the acquisition cost, guiding resource allocation, and retention strategies. The Conversion Rate is pivotal as it quantifies the percentage of users who take a desired action, offering insights into the effectiveness of your user interface and call-to-actions. The Retention Rate evaluates the ability of your company to retain customers over a specific period, highlighting the sustainability and appeal of your product or service. The Revenue Growth Rate is fundamental for assessing the financial trajectory of the company, allowing you to measure the pace at which your revenue is increasing, which is essential for evaluating the scalability and long-term viability of the business model. In addition, focusing on user satisfaction metrics, Net Promoter Score (NPS), and churn rate can also provide valuable insights. User satisfaction metrics reveal the overall contentment levels of your customers, allowing for enhanced user experience and product improvement. The NPS measures the willingness of customers to recommend your product or service, serving as a reliable indicator of customer perceptions and loyalty. A lower churn rate indicates higher customer satisfaction and better product-market fit. Get Fundraising Assistance for Your Tech Startup With Visible Just as a sales and marketing team has dedicated tools, shouldn’t a founder that is managing their investors and fundraising efforts? Use Visible to manage every part of your fundraising funnel with investor updates, fundraising pipelines, pitch deck sharing, and data rooms. Let Visible help guide you in your Fundraising journey! Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related resource: Top 18 Revolutionary EdTech Startups Redefining Education

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. Startup founders are responsible for many duties. — from hiring top talent, building and selling a product, fundraising, communicating with stakeholders, and everything in between. Founders often get pulled in many directions so overlooking certain roles or duties can be easy. When done right, an investor relations strategy can take up little time every month and pay off with added help with hiring, fundraising, strategy, and more. Related Resource: Investor Relationship Management 101 Learn how to get started with an investor relations strategy below: What is an investor relations strategy? As put by the team at Investopedia, “The investor relations (IR) department is a division of a business whose job it is to provide investors with an accurate account of company affairs.” Investor relations are typically associated with publicly traded companies to help investors make a decision to invest in a company. As you’ll notice in the definition above, they use a “division or department” whereas at a startup this is typically a department of 1 — the founder or CEO. However, an investor relations strategy can be a lever for success for startups and privately held companies. An investor relations strategy will help founders tap into their current investors’ capital, time, network, and experience to help scale their business. Challenges in investor relations Building relationships with investors is easier said than done. Building a startup is full of ups and downs so approaching the individuals and firms that are invested in your business can be intimidating. Like all things related to building a business, there are some challenges when it comes to investor relations: Sticking to a schedule Sharing bad news Finding the right information and data to share Learn more about overcoming these challenges in our post, The Complete Guide to Investor Reporting and Updates. Why an investor relations strategy is crucial for startups As we previously mentioned, keeping up with all of the roles and responsibilities can be difficult. Having an investor relations strategy is a good way to tap into your existing stakeholders to unlock help when it comes to hiring, fundraising, strategy, and more. Builds trust and credibility First things first, investors need to trust you and your business so you can lean into them for help with your business. Investors are a well-networked community so word will get around quickly how you communicate with investors. Something as quick as a monthly update to existing investors, will put you ahead of the majority of startup founders and help you stand out from the pack. Attracts and retains investors As put by Laurel Hess, the Founder of Hampr, “Taking the time to review your business with your stakeholders is actually a really great opportunity for growth – if you view it that way, there is a ton of potential to unlock. I have gained the following from my regular updates: Intros to potential investors Additional capital for a round I’m working on Intros to new verticals for expansion Advice on strategy for a problem we are working on Intros to new mentors/advisors to unlock the next phase of growth All this for just 1 hour of my time each month? That is the definition of “no brainer.” This 1 hour of monthly work can pay dividends when it helps to raise a new round of capital from existing investors or asking for introductions to potential investors down the road. Helps with hiring, fundraising, and strategy Startup investors are likely investors in 10s or 100s of other businesses and have a professional background of their own. Because of this, they are typically well-networked in the “startup world” and are able to help when it comes to hiring, fundraising, company strategy, and more. In order to tap into their network, they need to trust you and be willing to put their reputation with their network on the line. As put by Elizabeth Yin of Hustle Fund, “If you don’t write regular updates, your investors won’t want to help you. It’s hard to help a company and put your own social capital on the line with your network when you have no idea what is happening in your own portfolio company.” Essential components of an investor relations strategy An investor relations strategy will look different for every business. However, there are a few key components that most founders will benefit from including in their investor relations strategy. Communication plan Communication is at the core of any relationship. By sticking to a regular communication plan you’ll be able to strengthen relationships and build trust. For many early-stage founders a communication plan might look something like: Regular monthly updates at the start of the month Quarterly board meetings (in person or over Zoom) One-off communication and phone calls as needed Your mission, story, and vision Investors need to buy into your company’s mission, vision, story, and values. This is typically done during the fundraising process but it is important to continually hit on your mission and vision. Financial reporting and disclosures Of course, investors need to know how your business is performing. At the end of the day, if investors are not aware of your financial position and core metrics, they will not be able to help where needed. Check out the most common metrics that VCs expect from their portfolio companies below (read more here): Investor relationship management As we previously mentioned, investor relationship management will look different depending on the founder or investor. However, when it comes to communicating and sharing information it typically helps to include some or all of the following: Wins and mosses Key metrics Make specific asks Stay consistent Respond promptly Learn more about the importance of investor relationship management in our blog, Investor Relationship Management 101: How to Manage Your Startups Interactions with Investors. Crisis management and contingency planning A core part of an investor relations strategy is crisis management and contingency planning. For many startups, this will come to life during board meetings. However, having a plan for how to deal with a crisis is important. For some founders, this could be a one-off phone call to board members or the most engaged investors. It could come in the form of email, in-person meeting, etc. At the end of the day, having a plan in place for when emergencies hit is important. Investor feedback and engagement For an investor relations strategy to truly work, your investor needs to be engaged. An investor relationship requires work from both the founder and the investor. Sticking to a plan and regular communication schedule will lend its way to investors engaging and offering feedback. Being pointed about where you need help and how you can help investors is a great way to spur engagement. Another pro tip is to publicly call out the investors who are going above and beyond to help your business – this will help gamify your investor relations and encourage other investors to speak up. Related Resource: Investor Outreach Strategy: 9 Step Guide Maximize your investor relations strategy with Visible Visible is the home of investor relations for thousands of startup founders. Use our Updates tool to reguarly share your key qualitative and quantitative data with investors. Build relationships with potential investors using our pitch deck sharing and data room tools and ultimately keep tabs on interactions with every investor using our investor CRM. Give Visible a free try for 14 days here.

Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. The digital age has ushered in the rise of marketplace startups, changing the way we buy, sell, and interact. A marketplace now can take many forms but always connects buyers and sellers, facilitating transactions. These platforms can be vertical (specific to one industry), horizontal (across multiple industries), global, or localized. From Airbnb and Uber to niche platforms that cater to specific audiences, marketplaces have transformed industries. However, beyond creating a functioning platform, it’s essential for founders to build startups that resonate with investors. The Current Marketplace Investment Landscape According to the a16z Marketplace 100: 2023 report, the marketplace economy is growing rapidly, with the top 100 marketplaces generating over $2 trillion in GMV in 2022. Key Takeaways for Marketplace Founders Focus on solving a real problem. The best marketplaces address a real need that people have. They don’t just create a new way to do something that already exists. Build a strong network. The success of a marketplace depends on having a large and active network of buyers and sellers. Make sure you have a plan to attract and retain users. Be data-driven. Use data to make decisions about your business, such as which features to develop, how to price your products or services, and how to target your marketing campaigns. Trends Marketplace Founders Should Be Aware Of The growth of embedded finance, where financial services are embedded into non-financial products and services. This trend is creating new opportunities for marketplaces to offer lending, payments, and other financial services to their users. The increasing importance of data and analytics for marketplace businesses. Marketplaces generate a lot of data, which can be used to improve the user experience, optimize operations, and make better decisions. The rise of sustainability-focused marketplaces. Consumers are increasingly looking for sustainable options, and this trend is creating new opportunities for marketplaces to offer products and services that are better for the environment. The continued growth of cross-border marketplaces. The global marketplace is growing rapidly, and this trend is creating new opportunities for marketplaces to connect buyers and sellers from different countries. What Do Marketplace VCs Look for in Their Investments Traction & Momentum While this involves numbers, VCs also look at the qualitative aspects, like the pace of growth or the startup’s momentum in acquiring users or partnerships. Cultural and Social Impact Especially relevant for modern VCs, does the marketplace have a positive impact on society or the environment? Is there an alignment with broader societal values, like sustainability or inclusivity? Exit Potential VCs want to know the potential exit strategies, whether it’s an acquisition, merger, or going public. Strategic Partnerships & Alliances Does the startup have key partnerships that can accelerate growth or provide a competitive advantage? Feedback from Users Testimonials, case studies, or direct feedback that showcase the value and satisfaction of users. Market Trends & External Factors VCs assess external trends, economic factors, or global events that might impact the marketplace. Additional Resources: Kickstarting a Marketplace with Trey Closson, CEO of Amplio 25 Marketplace Metrics to Track By tracking these metrics, founders can gain insights into their marketplace’s health, growth potential, and areas of improvement. It’s crucial not just to monitor these numbers but also to understand their implications and how they interrelate. Adjustments and strategic decisions can then be based on data-driven insights. Positive unit economics are attractive to investors so make sure to highlight this in your updates. For instance, founders should understand the relationship between Customer Acquisition Cost (CAC) and the Lifetime Value (LTV) of customers. Related CAC Resources: Customer Acquisition Cost: A Critical Metrics for Founders Video: Formula Builder (Customer Acquisition Cost) Here are 25 metrics marketplace founders should be tracking: Gross Merchandise Value (GMV): Represents the total value of transactions on the platform. It gives a broad view of the marketplace’s activity. Net Revenue: This is the revenue the marketplace retains after direct costs (like refunds). For most marketplaces, this would be the fees they charge for facilitating a transaction. Monthly Active Users (MAU): Measures the number of unique users who have interacted with the marketplace within a given month. Customer Acquisition Cost (CAC): The average expense of acquiring a new customer, including marketing and sales expenses. Lifetime Value (LTV): An estimate of the total revenue a business can reasonably expect from a single customer account. LTV: CAC Ratio: A metric that compares the value of a customer over their lifetime to the cost of acquiring them. A ratio above 1 indicates a profitable customer acquisition. Take Rate: The percentage of GMV that the marketplace retains as revenue. Liquidity: A measure of how easy it is for users to make transactions on the platform. User Growth Rate: The speed at which new users are joining the platform. Churn Rate: The percentage of users (buyers or sellers) who stop using the platform over a specific period. Repeat Transaction Rate: The percentage of users who make more than one purchase or sale on the platform. Average Transaction Value (ATV): The average value of a transaction on your marketplace. Buyer-to-Seller Ratio: Represents the balance between the supply (sellers) and demand (buyers) sides of the marketplace. Time to First Transaction: The average time it takes for a new user to complete their first transaction after signing up. Conversion Rate: The percentage of users who take a desired action, like signing up after visiting the platform or making a purchase after browsing listings. Customer Satisfaction (CSAT): A measure of how satisfied users are with the marketplace. Net Promoter Score (NPS): Gauges user loyalty by asking how likely they are to recommend the marketplace to others. Average Resolution Time: Measures the time taken to resolve disputes or complaints on the platform. Supply/Demand Fill Rate: The percentage of demand/supply that gets successfully matched on the marketplace. Inventory Turnover Rate: Especially for product-based marketplaces, this metric measures how often inventory is sold and replaced over a specific period. Operational Efficiency Metrics: These can include the average time to onboard a new seller, average response time for customer queries, and so on. Engagement Metrics: Metrics like session duration, page views per visit, and actions per visit can provide insights into how users are interacting with the platform. Retention Rate: The percentage of users who continue to use the marketplace over time. Referral Rate: Measures how many new users are acquired through existing user referrals. Cost of Goods Sold (COGS): For product-based marketplaces, COGS represents the direct costs involved in producing the goods that were sold. How Founders Can Model Their Marketplace Startup for Success Modeling a marketplace startup for success involves a strategic approach to planning, execution, and scaling. Here are steps and considerations founders can undertake to increase the likelihood of their marketplace’s success: Clear Value Proposition Understand the core problem your marketplace solves. Ensure that your solution offers clear value to both sides (buyers and sellers) of the marketplace. Product-Market Fit: Conduct thorough market research to ensure there’s demand for your platform. Launch a minimum viable product (MVP) to gather feedback and iterate. Focus on Building Trust: Create a secure and transparent environment for transactions. Implement a robust review and rating system. Consider offering guarantees or refund policies for additional assurance. Achieve Liquidity: Ensure there’s a balance between supply (sellers) and demand (buyers). Consider strategies to stimulate one side if it’s lagging. Leverage Network Effects: Design the platform so that the more people use it, the more valuable and attractive it becomes to new users. Invest in Technology: Ensure your platform is scalable, secure, and user-friendly. Leverage AI and data analytics for personalized user experiences and to derive actionable insights. Adopt a Data-Driven Approach: Continuously monitor key metrics to understand user behavior, traction, and areas of improvement. Test and iterate features based on feedback and data. Effective Monetization Strategy: Determine the best revenue model: commission, subscription, freemium, advertising, or a combination. Ensure pricing is competitive and offers value to users. Community Building: Foster a sense of community among users through forums, events, or social media. Engage with your user base and encourage them to be brand advocates. Strong Marketing and Branding: Invest in building a recognizable and trustworthy brand. Employ a mix of content marketing, social media, partnerships, and paid advertising. Resources Finding the Balance While Building a Marketplace with the Founders of ChefPrep 13 Metrics for Marketplace Companies a16’s Required Reading for Marketplace Entrepreneurs All of a16’s Featured Marketplace Content VCs Investing in Marketplace Startups 1. VentureFriends About: VC fund based in Athens but investing across Europe, LatAm & the Middle East. We focus on FinTech, PropTech, B2C, Marketplaces & B2B SaaS. We are entrepreneurial investors, with strong experience, network and track record. We have been entrepreneurs, founders, worked at startups or angel investors in early stages and have a founder first & value driven approach. Stage: Pre-Seed, Seed, Series A Check size: $ 500K – $ 2.50M Check out their Connect Investor profile here. 2. Starting Line About: Starting Line invests in founders who are willing to take on substantial personal risks, out of fear of living a life of regret. That fear of wondering what life might have looked like if you’d just gone for it. Stage: Pre-Seed, Seed Check size: Around $ 1M Check out their Connect Investor profile here. 3. Version One Ventures About: Version One Ventures is an early-stage fund investing in outstanding consumer internet, SaaS, and mobile entrepreneurs. Thesis: Backing the next generation of mission-driven technology founders. Stage: Seed, Series A, Series B Check size: $ 500K – $ 750K Check out their Connect Investor profile here. 4. Benchmark VC About: Benchmark Capital is focused on one, and only one, mission: to help talented entrepreneurs build great technology companies. That’s what drives them and everything they do – from how they organize their firm to their investment strategy. Their investments range in size from as little as $100,000 to as much as $10 or $15 million. Typically, they invest $3 to $5 million initially and expect to invest $5 to $15 million over the life of a company. Stage: Seed, Series A, Series B, Growth Check size: $ 5M – $ 25M Check out their Connect Investor profile here. 5. Frog Capital About: Frog is a specialist European software scale-up investor. Our strategy is based on selecting the best scale-up phase investments and empowering technology CEOs to grow fast, by deploying our capital, our network and our support. At Frog we focus on ensuring long term commercial success for each and every business we invest in. A frog investment: – Headquartered in Europe – High-growth software businesses – Making a positive social impact – Generating over €3m ARR – Transactions of up to €20m Stage: Growth Check size: $ 5M – $ 30M Check out their Connect Investor profile here. 6. Global Founder Capital About: Global Founders Capital is a globally oriented, stage-agnostic venture capital firm that empowers gifted entrepreneurs worldwide. 01 // Global. We support founders in all geographies. 02 // Stage agnostic. We back companies across all stages and throughout the lifecycle. 03 // Operational. Our platform offers founders all the support they need to scale. Stage: Agnostic Check size: $ 50K – $ 10M Check out their Connect Investor profile here. 7. Market One Capital About: Market One Capital invests with a long term view in European startups across pre-seed and seed stages. European heart. Global mind. Thesis: Seed fund empowering network effects platforms across Europe Stage: Pre-Seed, Seed Check size: $ 2M Check out their Connect Investor profile here. 8. Peak Capital About: SaaS / Platforms / Marketplaces opportunities with multiple co-founders Thesis: Peak Capital is an Amsterdam-based venture capital firm. Stage: Pre-Seed, Seed Recent fund size: $ 71.70M Check out their Connect Investor profile here. 9. Piton Capital About: Founded in 2010, Piton Capital is a venture capital and growth equity firm headquartered in London and investing in businesses with network effects. We make investments ranging from €200k to €20m and since inception have invested in over 50 businesses, primarily in Europe. Piton focuses exclusively on network effects businesses as this provide one of the few moats or forms of defensibility to achieve dominance. Thesis: Investing in companies with network effects. Stage: Series A, Series B, Early Stage Recent fund size: $ 71.70M Check out their Connect Investor profile here. 10. White Star Capital About: White Star Capital is a global multi-stage investment platform built by a team of founders, investors and operators with a track record of entering new markets, expanding teams and exiting companies. Our approach to venture is characterized by a unique combination of international presence, perspective and people. With feet on the ground in New York, London, Montreal, Paris, Tokyo, Hong Kong, and Singapore, we partner closely with our portfolio to help them scale internationally from Series A onwards. Stage: Series A, Series B Check out their Connect Investor profile here. 11. Spark Capital About: Recognized as a 2022 Emerging 50 VC, Spark Growth Ventures is a community oriented, early & mid stage, vertical-agnostic, technology venture capital firm. Our mission is to support gritty and exceptional founders in their missions by bringing forth the combined value of our strong community. We are fortunate to have a global network of entrepreneurs, C-level relationships, subject matter experts, world-class talent, institutional investors, high net worth individuals and family offices, many of who are investors in our platform. Thesis: Spark Capital is an early and growth stage venture capital firm that partners with exceptional founders and the products they design. Stage: Seed, Series A, Series B Check out their Connect Investor profile here. 12. NextGen Venture Partners About: NextGen Venture Partners invests $1-2M in seed stage companies with the participation of 1,000+ Venture Partners. Stage: Pre-Seed, Seed, Series A Check out their Connect Investor profile here. 13. Right Click Capital About: Right Click Capital is a venture capital firm backing ambitious tech startups in Australia, New Zealand, and South East Asia. Thesis: We invest in and champion bold tech. Stage: Pre-Seed, Seed, Series A, Series B Check out their Connect Investor profile here. 14. LDR Ventures About: LDR is a VC firm based in Los Angeles investing In Female & Minority Founders, Consumer Product, Food, E-Comm, Marketplaces & Legal Tech Thesis: Female led and Los Angeles based, we consult to and invest primarily in female entrepreneurs at the Seed & Series A Stages. Stage: Seed, Series A Check out their Connect Investor profile here. 15. Strive VC About: STRIVE invests in early stage (Seed to Series A) internet and mobile companies in Asia. Thesis: We help fulfill each entrepreneur’s amibitions through continuous and proactive hands-on support understanding their true needs. Stage: Seed, Series A Check out their Connect Investor profile here. 16. Upfront Ventures About: We invest primary in the US but have a 20-year history of funding companies in Europe. Our managing partners (Yves Sisteron & Mark Suster) are both dual citizens of France & UK respectively. Kevin Zhang funds games companies and looks in Sweden, Finland, UK and beyond. And locally Julien Etaix is based in Paris and open to talking with anybody on the continent. Thesis: Early investors. Long-term partners. Stage: Seed, Series A, Series B, Growth Check out their Connect Investor profile here. 17. No Brand About: No Brand is a private investment company focussed on opportunities empowered by technology. Our focus is on backing mission driven leaders, who are building for a long term horizon and benefit from online platforms, community or network effects. Stage: Pre-Seed, Seed, Series A, Series B Check out their Connect Investor profile here. 18. Everywhere Ventures About: Global pre-seed fund backed by 500 founders and operators. Thesis: We invest $50-250k into pre-seed companies looking to raise between $500-$2M. We are happy to lead or partner with other investors. We are generalists at heart, but lean into three core areas: money, health, and work. We embrace first-time founders, and founders who may lack traction but have a distinct vision for a world that may not exist…yet. Stage: Pre-Seed Check out their Connect Investor profile here. 19. LAUNCHub Ventures About: LAUNCHub Ventures is a leading early-stage venture capital fund, investing in technology startups in the Seed and Series A funding stages. We invest in Central and Southeastern Europe (SEE & CEE), and in companies built by ambitious founders from that region who are based in the leading startup hubs such as London, San Francisco, and beyond. Our initial investment is between €500K and €2M, with capacity to continue supporting the funding needs of our portfolio companies in future rounds. We are looking for scalable businesses with initial traction and passionate founders, originating from South-Eastern Europe and the broader CEE region. Thesis: When evaluating potential deals, we place a strong emphasis on the team, market, and vision. Specifically, we look for: * an ambitious and talented team proven to execute, founder competitive advantage and path to a clear moat, a big market or one with the potential to grow or emerge. Stage: Series A, Seed, Pre-Seed Check out their Connect Investor profile here. Partner With VCs Investing In The Future of Marketplaces with Visible Venture capital has emerged as a powerful catalyst for progress in the Marketplace space. By bridging the funding gap, providing expertise, and fostering innovation, VCs enable Marketplace startups to thrive and create transformative solutions. Check out Visible’s investor database, Connect, to find VCs investing specifically within the Marketplace space. Also here two more of our list articles, 10+ VCs Investing in E-commerce and Consumer Products 15 Direct to Consumer (D2C) VC Investors You Need to Know Companies should leverage VCs expertise and resources to accelerate their growth, navigate regulatory challenges, and scale their impact. Also get access to Visible for free for 14 days: https://app.visible.vc/create-account

This year’s fundraising environment has been undoubtedly challenging for startups of all stages. Understanding today’s complex fundraising dynamics is critical to distinguish yourself from the competition. Join Visible and two fundraising experts from Antler for a recorded discussion on how to stand out to investors for the rest of this year and beyond. Webinar Overview You can check out a few of the topics we hit on below: Breakdown of current fundraising dynamics Standing out to early-stage investors Standing out with storytelling Standing out with investor communications Antler’s recommended Investor Update Template Watch the Recording Give the recorded webinar a watch below: