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In the high-stakes world of startup funding, side letters often play a pivotal role in shaping deals between founders and investors. These agreements extend beyond the main contract to provide individual investors specific rights, privileges, or obligations. While they offer flexibility, they also introduce complexities that can impact your company’s future. This article breaks down what side letters are, how they differ from main contracts, and what key provisions they often include. We’ll also explore critical considerations for founders negotiating side letters, from balancing stakeholder needs to ensuring transparency and legal compliance. By the end, you’ll have the tools to navigate side letters and build strong investor relationships confidently. What Is a Side Letter? A side letter is a supplementary agreement attached to the main investment contract in startup funding. It provides specific terms, rights, or obligations tailored to an individual investor without altering the main agreement for all parties. These agreements offer flexibility to address unique needs, such as regulatory compliance, strategic partnerships, or additional voting rights. Side letters allow tailored provisions, helping startups attract investments while accommodating diverse stakeholder interests. However, founders must carefully draft and manage these agreements to ensure they remain fair, transparent, and aligned with the company’s long-term goals. How Does a Side Letter Differ From the Main Contract? Side letters differ from the main investment contract in their scope, applicability, and confidentiality. While the main contract outlines standardized terms applicable to all investors, side letters focus on specific provisions tailored to an individual investor’s needs. These agreements address unique requests that may not fit within the broader framework of the main contract. Key distinctions include: Applicability: The main agreement applies universally to all investors, whereas side letters are specific to the signatory investor. Scope: Side letters are designed to handle nuanced or investor-specific terms irrelevant to the larger investor group. Confidentiality: The main contract is typically shared among all investors, but side letters may remain private, depending on their terms. Related resource: Portfolio Data Collection Tips for VCs What Is Included in a Side Letter? Side letters are a flexible tool to address unique investor needs and concerns, often covering terms that don’t fit into the main investment agreement. While the content of a side letter can vary based on the specifics of the deal, there are several common components that these agreements typically include. From granting special rights to ensuring regulatory compliance, side letters are tailored to align with the interests of the investor and the startup. Key elements often found in a side letter: Special Rights and Privileges One of the most common components of a side letter is granting special rights and privileges to certain investors. These provisions often strengthen investor relationships and provide additional incentives for strategic or institutional backers. Voting RightsSide letters can grant enhanced voting rights to key investors, allowing them a more significant say in critical company decisions. Investors who bring substantial capital or strategic value to the table often negotiate these rights. Information AccessInvestors may request detailed financial updates, operational metrics, or performance reports to monitor their investments. Side letters formalize these requests, ensuring the investor can access the agreed-upon information without disrupting the startup’s operations. Board Observer PrivilegesSome investors negotiate the right to attend board meetings as observers, giving them insight into the company’s direction without full voting power. This can foster collaboration and keep investors engaged while maintaining the board’s balance. Exit Preferences Exit preferences are a critical component of many side letters, designed to protect investor interests during liquidity events, acquisitions, or significant changes in ownership. These clauses provide clarity and security, outlining how and when investors can realize a return on their investment. By clearly defining exit preferences in a side letter, founders and investors can minimize uncertainty and potential conflicts. Careful negotiation is essential to balance investor expectations with the company’s long-term goals while avoiding terms that might set unfavorable precedents for future funding rounds. Why Are Exit Preferences Important? Startups operate in a high-risk environment, and exit clauses act as a safety net for investors. Common scenarios where exit preferences play a role include: Liquidity Events: Clauses may specify an investor’s right to receive a predefined return or distribution during an IPO or company sale. Change-of-Control Provisions: These define how investor rights are impacted during mergers or acquisitions. Redemption Rights: Some side letters allow investors to sell their shares back to the company after a certain period, providing an alternative to waiting for a full exit. Key Considerations for Founders: Founders should approach exit preferences thoughtfully, ensuring they balance investor protections with the company’s operational and strategic goals. Poorly negotiated terms can hinder future fundraising efforts or create conflicts during exit scenarios. Working with experienced legal counsel is critical to drafting clear, fair clauses that support both the investors’ and the company’s long-term success. Non-Disclosure and Confidentiality Confidentiality clauses are a cornerstone of side letters, ensuring that sensitive information shared between startups and investors remains protected. These clauses build trust between parties, safeguard competitive advantages, and prevent unintended disclosures that could harm the company’s operations or valuation. Why Are Confidentiality Clauses Important? Protecting Sensitive Information: Startups often share proprietary data, financial metrics, or strategic plans with investors. Confidentiality clauses prevent this information from being disclosed to competitors or unauthorized parties. Maintaining Competitive Advantage: In fast-paced industries, safeguarding intellectual property and trade secrets is essential to maintaining a competitive edge. Investor Confidence: Confidentiality agreements reassure investors that their involvement, special terms, or discussions won’t be disclosed without their consent. Key Considerations for Founders: When drafting confidentiality clauses, founders should ensure they are comprehensive yet fair, covering all critical information while allowing flexibility for required disclosures, such as regulatory compliance. Mismanaged confidentiality terms can strain relationships or lead to legal complications, so working with legal counsel to craft clear, enforceable terms is essential. Compliance and Regulatory Provisions Side letters often include compliance and regulatory provisions to address specific legal or geographic requirements tied to an investor’s location or type. These provisions ensure that the startup remains compliant with applicable laws while accommodating the investor's unique needs. Why Are Compliance Provisions Necessary? Geographic Restrictions: Investors from different countries may be subject to varying regulations, such as tax reporting requirements, foreign ownership rules, or currency controls. Side letters can include tailored clauses to meet these obligations without modifying the main agreement for all investors. Regulatory Compliance: Institutional investors, such as venture funds or pension funds, may require adherence to specific laws or guidelines, including reporting, anti-money laundering (AML), or know-your-customer (KYC) standards. Ethical or Sectoral Restrictions: Some investors may have ethical guidelines or sectoral restrictions (e.g., avoiding industries like tobacco or gambling) that need to be formalized in the agreement. How Founders Should Approach Compliance Clauses: When including compliance and regulatory provisions, founders must ensure they align with the company’s operational capabilities. Overly restrictive or unclear terms can create bottlenecks or unintended liabilities. Consulting legal and financial advisors with expertise in cross-border investments and regulatory frameworks can help mitigate these risks. Key Considerations for Startup Founders While side letters can be powerful tools for securing investment and accommodating unique investor needs, they also introduce complexities that founders must navigate carefully. Mismanaged side letters can lead to stakeholder conflicts, hinder future fundraising efforts, or even create unintended liabilities. To maximize their benefits and minimize potential pitfalls, founders should approach side letters strategically, balancing the needs of investors with the company’s long-term goals. Let’s explore the critical factors every founder should consider when negotiating and managing side letters. Related resource: Portfolio Monitoring Tips for Venture Capital Investors Balance the Needs of All Stakeholders When negotiating side letters, founders must consider the broader implications of these agreements on all stakeholders- not just the investor requesting specific terms. While granting special rights or privileges can help secure key funding, if not managed carefully, these decisions can create friction with existing shareholders, employees, and future investors. Key Considerations: Existing Investors: Favoring one investor with additional rights, such as veto powers or preferential returns, can upset existing investors who may feel their stakes are diluted or undervalued. Maintaining transparency and fairness is critical to preserving trust. Employees: Special terms in a side letter, such as liquidation preferences or exit clauses, can indirectly impact the equity held by employees, especially in liquidity events. Founders must ensure employee interests are protected to maintain morale and motivation. Future Investors: Overly generous side letter terms can set precedents, making future funding rounds more complex. New investors may demand similar privileges, complicating negotiations or reducing your company’s appeal. Balancing the needs of all stakeholders requires a holistic approach. Founders should evaluate how side letter terms align with the company’s long-term goals and ensure they don’t undermine overall equity or governance structures. By considering the bigger picture, founders can foster harmony among stakeholders and build a stronger foundation for growth. Negotiate Strategically Negotiating side letter terms is a delicate process that requires careful preparation and a clear understanding of your company’s goals. Founders must strike a balance between accommodating investor requests and safeguarding the company’s long-term interests. A strategic approach ensures that side letters serve as a tool for growth rather than a source of future complications. Key Strategies for Effective Negotiation: Understand Investor Motivations: Research why the investor is requesting specific terms before entering negotiations. Understanding their priorities—whether it’s risk mitigation, regulatory compliance, or increased involvement—helps you address their concerns effectively while maintaining leverage. Set Non-Negotiables: Identify the terms you cannot compromise on, such as clauses that could harm existing stakeholders or limit future fundraising flexibility. Communicate these boundaries clearly during discussions. Prioritize Proportionality: Ensure that any special rights or privileges granted are proportional to the investor’s contribution. For instance, granting a board observer seat might be appropriate for a major backer but excessive for a smaller investor. Anticipate Future Impact: Evaluate how the proposed terms could influence future funding rounds, employee equity, or governance structures. Negotiate clauses that align with your company’s growth trajectory and avoid setting unfavorable precedents. Engage Experts: Review the proposed terms with experienced legal and financial advisors. Their insights can help identify risks, suggest alternatives, and ensure the side letter aligns with industry norms. Seek Legal Counsel Engaging experienced legal counsel is essential when drafting and negotiating side letters. These agreements often contain nuanced terms that can significantly affect your company’s governance, stakeholder dynamics, and future fundraising efforts. Professional guidance ensures that the side letter is legally sound and aligned with your long-term goals. Why Legal Counsel Is Important: Ensuring Compliance: Lawyers with expertise in startup funding can ensure the side letter adheres to applicable laws and regulations, particularly when dealing with international or institutional investors. Identifying Risks: Legal experts can identify potentially harmful clauses, such as overly restrictive veto rights, disproportionate exit preferences, or terms that could deter future investors. Drafting Precise Language: Ambiguities in legal agreements can lead to disputes. Legal counsel ensures the side letter’s terms are clearly and precisely written to avoid misinterpretation. Balancing Investor Interests: An experienced lawyer can help founders negotiate terms that satisfy investors while protecting the company from undue obligations or liabilities. Protecting Stakeholder Equity: Side letters often affect equity distribution or governance rights. Legal advice ensures that the interests of existing stakeholders, including employees and future investors, are preserved. Best Practices for Founders: Founders should involve legal counsel early in the negotiation process rather than waiting until terms are finalized. Look for advisors with experience in venture capital agreements and startup-specific issues to ensure you receive tailored advice. By prioritizing expert guidance, founders can confidently navigate side letter complexities while safeguarding the company’s interests. Transparency Transparency is vital when dealing with side letters to maintain trust and goodwill among all investors. While side letters often involve private agreements with specific investors, founders should aim to communicate their existence and purpose in a way that avoids perceptions of preferential treatment or hidden arrangements. Failing to address this can harm relationships, discourage future investment, and create unnecessary conflicts. Why Transparency Matters: Preserving Investor Confidence: Sharing the rationale behind any side letter demonstrates fairness and reassures investors that special terms are not granted arbitrarily. Avoiding Conflict: Hidden side letters can create tension among stakeholders if uncovered later, especially if other investors feel disadvantaged. Fostering Long-Term Relationships: Transparent communication builds trust, paving the way for stronger partnerships and collaboration with current and future investors. Best Practices for Transparency: Proactively Communicate: Inform your investors about the existence of side letters and explain why certain terms were necessary for a specific investor. This can be done during shareholder meetings or updates. Ensure Fairness: Avoid granting overly generous terms that could alienate other stakeholders. If special rights are essential, consider how they align with the interests of the broader investor base. Establish a Policy: Develop a policy for handling side letters, outlining what terms are negotiable and how they will be disclosed to other investors. Document Clearly: Ensure that the terms of side letters are well-documented and filed alongside other investment agreements for internal record-keeping. Long-Term Impact When negotiating side letters, founders must consider how the terms agreed upon today may influence the company’s future, particularly in fundraising rounds and exit scenarios. While side letters can help secure critical investments in the short term, poorly structured agreements may create obstacles that hinder long-term growth, complicate governance, or deter future investors. Key Long-Term Implications to Consider: Future Fundraising Rounds: Investors in future rounds may demand similar or better terms than those outlined in existing side letters, creating a "ratcheting" effect that complicates negotiations. Overly generous provisions, such as preferential liquidation rights or veto powers, can deter new investors who perceive the deal as inequitable. Governance Challenges: Special rights granted in a side letter, such as board observer seats or enhanced voting power, may create governance bottlenecks or stakeholder conflicts. Complex or overlapping rights from multiple side letters can make decision-making inefficient as the company grows. Impact on Exits: Exit preferences outlined in side letters could lead to disputes during liquidity events, particularly if different investors have conflicting priorities. Terms that favor one investor too heavily may reduce overall returns for other stakeholders, including employees, potentially damaging morale or trust. How Founders Can Mitigate Long-Term Risks: Think Beyond the Immediate Deal: Evaluate how side letter terms might affect future investor negotiations, company governance, and exit scenarios. Ensure Proportionality: Keep special terms aligned with the level of the investor’s contribution to avoid setting precedents that strain future rounds. Consult Advisors: Work with legal and financial experts to assess the long-term implications of side letter terms before finalizing agreements. Maintain Flexibility: Avoid overly rigid terms that could limit your ability to pivot strategies or negotiate with new stakeholders. Maintain Strong Relationships With Investors With Visible Side letters are powerful tools for tailoring agreements with investors, but they require careful consideration to balance stakeholder interests, ensure transparency, and avoid long-term complications. By negotiating strategically, consulting legal counsel, and prioritizing fairness, founders can use side letters to secure vital funding while maintaining trust and alignment with their investors. Building and nurturing strong investor relationships is crucial for your startup’s success. With Visible, you can streamline your investor updates, manage fundraising, and maintain clear communication with your stakeholders—all in one place. Give it a free try for 14 days here. Related resource: What Response Rates Should I Expect From My Companies if I Use Visible?

In today’s rapidly evolving world, supply chain and logistics have come into the spotlight as industries face immense challenges and innovation opportunities. With recent disruptions and increasing demands on global logistics networks, there is a heightened need for tech-driven solutions that improve resilience, transparency, and efficiency across the supply chain. This dynamic has caught the attention of venture capitalists (VCs) eager to fund startups that can solve these pressing issues, making supply chain and logistics a high-potential area for investment. For founders, the support of a knowledgeable, strategic investor can provide the resources needed to tackle complex logistical problems and accelerate growth. This article will highlight the top 10 VC investors actively funding supply chain and logistics startups and offer insights into what these investors prioritize and practical advice for approaching them successfully. Top 10 VC Investors Funding Supply Chain and Logistics Startups In the rapidly evolving supply chain and logistics sector, securing investment from venture capital firms that offer more than just capital can be pivotal for a startup's success. The following is a curated list of top 10 venture capital firms with a specific focus on supply chain and logistics, each providing unique strategic value to founders: 1. Bluestein Ventures About: Bluestein is a family-backed VC that invests in the future of food. The firm focuses across high-growth CPG, food tech, commerce, & digital. Sweetspot check size: $ 750K Thesis: We invest in early-stage food ventures across the supply chain - both B2C & B2B - including high-growth consumer brands, next-gen commerce, digital technology, and proprietary foodtech. Focus is Seed to Series A. 2. Monozukuri Ventures About: Monozukuri Ventures provides investment, mentorship, prototyping know-how and manufacturing expertise for hardware startups. Sweetspot check size: $ 250K Thesis: Monozukuri Ventures is focused on funding hardware startups in the fastest growing industries: robotics, AI, clean energy, wearables, space tech, IoT, healthcare, smart home and more. We invest in 10-15 hardware startups per year, with a typical check ranging from USD 150K to 300K at first, with a chance to follow investment up to USD 1M accumulate. 3. Dynamo Ventures About: Dynamo Ventures specializes in early-stage investments within supply chain and mobility sectors. They focus on pre-seed and seed-stage startups, aiming to drive innovation in logistics and transportation. Traction metrics requirements: We look at startups pre-Series A from inception. Thesis: Dynamo Ventures invests in B2B Supply Chain and Mobility. Strategic Value: Deep industry expertise in supply chain and mobility. Extensive network with logistics corporations and industry leaders. 4. 8VC About: 8VC invests in early-stage companies across various sectors, with a significant focus on logistics and supply chain technologies. They aim to support transformative solutions that enhance operational efficiencies. Traction metrics requirements: Pre-seed - Serial entrepreneur(s) team Seed - Need customers/prospects who would talk to us on the company Series A - Post revenue Thesis: Investing in disruptive technologies in enterprise, healthcare and automation in various industries. Strategic Value: Strong track record in scaling AI and automation within logistics operations. Access to a broad network of industry experts and corporate partners. 5. Schematic Ventures About: Schematic Ventures is an early-stage venture capital firm dedicated to investing in supply chain, manufacturing, and commerce technology startups. Strategic Value: Specialized focus on supply chain and manufacturing sectors. Hands-on approach with deep operational support. 6. Prologis Ventures About: “We take logistics further, powering a global supply chain that's stronger, smarter and more resilient than ever before.” Strategic Value: Direct access to Prologis' extensive real estate and customer base. Expertise in logistics real estate and infrastructure. 7. Eclipse Ventures About: We help entrepreneurs build companies that will boldly transform the industries that define and propel economies. Thesis: Eclipse Ventures helps entrepreneurs build companies to boldly transform the industries that define and propel economies. Strategic Value: Emphasis on regional startups, providing unique market insights. Strong connections with policymakers and regional business leaders. 8. Xplorer Capital About: Xplorer Capital invests in early to growth-stage technology companies, with a focus on those transforming industries like logistics and supply chain through advanced technologies. Strategic Value: Expertise in scaling companies leveraging AI and automation. Global network facilitating international expansion. 9. Outlierz Ventures About: Outlierz Ventures is a pioneer African Seed-focused VC firm backing outstanding founders solving Africa's most pressing challenges and re-inventing the continent's future. We invest at Pre-Seed, Seed, and Pre-Series A stages in companies using Technology to transform key traditional industries across Africa's main tech hubs. Thesis: We believe Technology creates tremendous opportunities for talented entrepreneurs to change the status quo. Our mission is to channel capital, knowledge, and networks to Outlierz founders solving Africa’s pivotal problems. Thus, generating outsized returns while creating long-lasting socio-economic impact. 10. Poligono Capital About: We invest in early-stage startups to develop possibilities for success through technology. Non-bank financial organization that believes in exponential capital growth through portfolio diversification and innovative vision. Sweetspot check size: $ 100K Traction metrics requirements: CAGR, ARR, GMV, CHURN RATE, BURN RATE, RUNWAY 11. SpringTime Ventures About: Seed stage fund focused on technology investments in the Rockies. Sweetspot check size: $ 500K Thesis: We look for founders with domain expertise, forging a path with a truly transformative technology. What Supply Chain and Logistics Founders Should Know Before Approaching VCs Navigating the venture capital landscape requires a keen understanding of current industry trends, awareness of common pitching pitfalls, and strategies for aligning your presentation with investor priorities. Related resource: How to Get Your Startup Ready for Investors’ Operational Due Diligence Current Trends VCs Are Focusing On Supply Chain Resilience: The COVID-19 pandemic exposed vulnerabilities in global supply chains, prompting investors to prioritize startups that enhance flexibility and robustness. Solutions that mitigate disruptions and adapt to changing conditions are highly attractive. Sustainability: Environmental concerns are at the forefront, with VCs seeking startups that offer eco-friendly logistics solutions, such as reducing carbon footprints and promoting sustainable practices. Automation and AI Applications: Technologies like artificial intelligence and automation are revolutionizing logistics by improving efficiency and reducing costs. Investors are keen on startups leveraging AI for demand forecasting, route optimization, and warehouse automation. Digital Transformation: The shift towards digital supply chains, incorporating IoT, blockchain, and cloud-based solutions, is a significant focus area. Startups facilitating this transformation are gaining investor interest. Related resource: Top Trends and Leading VCs Investing in D2C Brands: A Comprehensive Guide for 2024 Common Mistakes Founders Make When Pitching Overcomplicating the Message: Founders often delve too deeply into technical details, making it challenging for investors to grasp the core value proposition. It's crucial to communicate your solution's benefits clearly and concisely.Neglecting Market Understanding: Failing to demonstrate a deep understanding of the market landscape, including competitors and customer needs, can undermine credibility. Investors need assurance that you know the industry well. Lack of a Clear Monetization Strategy: Presenting a solution without a well-defined revenue model can raise concerns about the startup's viability. Ensure you articulate how your business will generate profits. Ignoring Scalability: Investors seek scalable solutions. Overlooking how your startup can grow and adapt to increasing demands may deter investment. Recommendations for Tailoring Pitches to Align with Investor Priorities Highlight Alignment with Current Trends: Demonstrate how your solution addresses key industry trends such as resilience, sustainability, and digital transformation. Use data and case studies to substantiate your claims. Simplify Your Value Proposition: Present your solution in a straightforward manner, focusing on the problem it solves and the benefits it offers. Avoid unnecessary jargon and technicalities. Showcase Market Knowledge: Provide insights into the market size, growth potential, and competitive landscape. Illustrate your understanding of customer pain points and how your solution uniquely addresses them. Detail a Clear Business Model: Outline your revenue streams, pricing strategy, and financial projections. This transparency builds investor confidence in your startup's financial viability. Emphasize Scalability: Explain how your solution can scale to meet growing market demands. Discuss plans for expansion, potential partnerships, and strategies to handle increased operations. Importance of Metrics and KPIs for VCs in Logistics VCs seek startups that can demonstrably enhance efficiency, scalability, and profitability in the supply chain and logistics sector. Founders who present data-driven metrics effectively showcase traction and growth potential, aligning with investor expectations. Utilizing tools like Visible can assist in tracking and presenting these metrics professionally. Operational Efficiency Operational efficiency directly influences costs, service speed, and customer satisfaction. VCs assess this to determine how well a startup's solution streamlines processes and reduces waste. Key Metrics to Highlight: Throughput Time: Duration to complete a task or process. Utilization Rates: Efficiency of equipment and workforce usage. Error Rates: Frequency of mistakes in processes like order picking or packaging. How to Present It: Use before-and-after comparisons to demonstrate efficiency gains your solution delivers. Visible's platform can help create clear visualizations of these improvements. Customer Retention and Satisfaction High customer retention indicates strong product-market fit and satisfaction, reflecting the reliability and relevance of your solution. Key Metrics to Highlight: Net Promoter Score (NPS): Measures customer willingness to recommend your service. Churn Rate: Percentage of customers discontinuing use over a period. Repeat Customer Rate: Proportion of customers making multiple purchases. How to Present It: Highlight trends over time or recent improvements in customer loyalty or satisfaction due to your solution. Visible enables effective tracking and reporting of these metrics. Cost Savings and Return on Investment (ROI) In a cost-sensitive industry, demonstrating that your solution leads to significant cost savings validates its value proposition and sustainability. Key Metrics to Highlight: Cost-per-Order (CPO): Average expense incurred per order processed. Transportation Cost Reduction Percentage: Savings achieved in transportation expenses. Overall ROI: Financial return clients gain from implementing your solution. How to Present It: Provide case studies or testimonials quantifying cost savings from existing customers. Scalability and Growth Metrics VCs prioritize startups with solutions capable of rapid growth without proportional cost increases, ensuring long-term viability. Key Metrics to Highlight: Capacity for Increased Volume: Ability to handle growing demand. Speed of Onboarding New Clients: Efficiency in integrating new customers. Customer Acquisition Cost (CAC): Expense associated with acquiring a new customer. How to Present It: Show projections demonstrating maintained or improved performance metrics as you scale. Route Optimization and Delivery Performance Timely and cost-efficient delivery is crucial in logistics. VCs look for startups that optimize routes, reduce delivery times, and enhance last-mile efficiency. Key Metrics to Highlight: Average Delivery Time: Typical duration for deliveries. On-Time Delivery Rate: Percentage of deliveries made on schedule. Fuel Savings from Optimized Routes: Reduction in fuel consumption due to improved routing. Cost per Mile: Expense incurred per mile traveled. How to Present It: Provide real-world data or case examples illustrating faster deliveries or transportation cost savings achieved through your solution. Related resource: Top 10 VCs Fueling Innovation in Transportation Data-Driven Insights and Predictive Capabilities Solutions offering advanced data analytics or predictive insights provide a competitive edge, enabling proactive decision-making. Key Metrics to Highlight: Forecasting Accuracy: Precision in predicting demand or inventory needs. Percentage of Decisions Automated: Extent to which processes are automated. Customer Adoption Rate of Analytics Features: Level of client engagement with data-driven tools. How to Present It: Highlight machine learning or AI capabilities that allow clients to make informed decisions and address issues proactively. Visible can assist in tracking adoption rates and showcasing the impact of these features. Key Challenges and Opportunities in Supply Chain and Logistics The supply chain and logistics sector is undergoing significant transformation, presenting both challenges and opportunities for startups. Challenges Facing Startups Regulatory Complexities: Navigating the intricate web of international trade regulations, customs procedures, and compliance standards can be daunting. Startups must stay abreast of evolving policies to avoid legal pitfalls and ensure smooth operations.Infrastructure Demands: Establishing a robust logistics network requires substantial investment in warehousing, transportation, and technology. For startups, building or accessing this infrastructure can be capital-intensive and time-consuming. High Research and Development (R&D) Costs: Developing innovative solutions, especially those involving advanced technologies like AI and automation, entails significant R&D expenditure. Securing funding to cover these costs is often a major hurdle for emerging companies. Supply Chain Disruptions: Global events, such as pandemics or geopolitical tensions, can disrupt supply chains, affecting startups' ability to deliver services and maintain customer trust. Building resilience against such disruptions is essential but challenging. Opportunities Attracting Investors E-commerce Growth: The surge in online shopping has heightened the need for efficient logistics solutions. Startups that can enhance last-mile delivery, optimize fulfillment processes, or integrate seamlessly with e-commerce platforms are particularly appealing to investors. Demand for Supply Chain Visibility: Companies increasingly seek transparency in their supply chains to monitor shipments, manage risks, and improve efficiency. Startups offering real-time tracking, data analytics, and predictive insights are well-positioned to meet this demand. Sustainability Initiatives: Environmental concerns are driving the adoption of green logistics practices. Startups that provide eco-friendly solutions, such as carbon footprint reduction technologies or sustainable packaging, are gaining traction among investors focused on ESG (Environmental, Social, and Governance) criteria. Technological Advancements: Integrating AI, machine learning, and automation revolutionizes logistics. Startups leveraging these technologies to enhance operational efficiency, reduce costs, or offer innovative services are attracting significant investment. Secure Venture Capital for Your Supply Chain and Logistics Startup with Visible Raising venture capital in the supply chain and logistics space requires founders to present a clear, scalable solution that meets today’s industry challenges. With investors keen on innovations in resilience, sustainability, and digital transformation, founders have the opportunity to secure support for impactful growth. To further streamline your fundraising Visible offers tools to help Supply Chain and Logistics founders stay connected with investors, track performance, as well as present key metrics like route efficiency and cost savings. Find investors at the top of your funnel with our free investor database, Visible Connect. Here's a prefiltered list of VCs active in the Supply Chain and Logistics sector. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

In recent years, rapid technological advancements and shifting consumer demands have transformed the transportation sector. From electric and autonomous vehicles to last-mile delivery innovations, sustainable transport solutions, and AI-driven logistics, transportation startups are pushing boundaries and redefining how people and goods move across cities and countries. As these startups take on the challenges of this dynamic industry, they often face high capital requirements, regulatory hurdles, and the need to scale complex infrastructure. Finding the right venture capital (VC) partners can make a significant difference for transportation founders. Specialized transportation investors can provide the necessary capital and bring invaluable industry expertise, regulatory insights, and networks within the transportation ecosystem. Working with the right investors can equip transportation startups with the tools to navigate industry-specific challenges and seize growth opportunities effectively. This article will highlight the top 10 investors actively funding transportation startups, along with other helpful information to help founders be well-prepared for their transportation fundraising journey. Why Specialized Transportation Investors Matter When it comes to building a successful transportation startup, securing funding from generalist investors can be valuable- but partnering with venture capitalists specializing in transportation can make an even bigger impact. Transportation-focused VCs bring more than just capital to the table, they offer deep sector knowledge, established connections within the industry, and a deep understanding of the unique hurdles that transportation startups face. These advantages often translate into more strategic guidance, better industry insights, and enhanced growth opportunities. Sector-Specific Expertise Specialized transportation investors have an in-depth understanding of the complexities involved in this industry. They are well-versed in areas like supply chain logistics, vehicle technologies, fleet management, and sustainable transit solutions. This expertise is particularly useful in assessing and supporting new technologies, whether a startup is pioneering advances in electric vehicles or working on cutting-edge AI applications for traffic optimization. With a VC who knows the industry inside and out, founders can receive advice grounded in firsthand experience, accelerating their growth and increasing the likelihood of sustainable success. Related resource: Top VCs Driving Transformation in Supply Chain and Logistics Relevant Connections Transportation-focused VCs typically have a broad network of connections with suppliers, industry leaders, regulatory bodies, and potential partners. These relationships can be instrumental for startups, helping them establish partnerships and scale faster in a sector where collaboration is often key. Whether it’s securing strategic partnerships with major automotive companies or finding dependable logistics providers, having a VC with established contacts can be a major advantage for startups working to break into the market. Understanding of Regulatory and Operational Challenges Navigating regulatory requirements can be one of the toughest parts of launching a transportation startup. Specialized investors understand the regulatory landscape- whether it's federal safety standards for autonomous vehicles, emissions regulations, or logistics compliance protocols. They are more likely to guide founders through the complexities of compliance and introduce them to industry consultants or advisors when needed. Additionally, these investors often anticipate operational challenges unique to transportation, such as high initial capital requirements and complex supply chains, and are equipped to help founders develop realistic, resilient business models. Top 10 VC Investors in Transportation AV8 Ventures About: AV8 Ventures is an early-stage VC firm comprised of industry experts, scientists, operators, and investors that leverage. Thesis: Investing in disruptive technologies in enterprise, healthcare and automation in various industries. BMW i Ventures We find and grow cutting-edge technology companies redefining the automotive industry. Navigate Ventures A venture capital firm that provides seed capital and regulatory support to entrepreneurs shaping the future of cities – helping them grow into tomorrow’s most valued companies. Trucks Venture Capital Trucks Venture Capital funds the entrepreneurs building the future of transportation. Maniv Mobility Maniv Mobility is a global early-stage venture fund based in Tel Aviv and New York. We partner with founders advancing the cleaner, safer, more efficient and more sustainable movement of people and goods. With decades of experience in the mobility, transportation, electrification and policy sectors, Maniv has built a deep global network of industry leaders and experts - allowing us to closely partner with startups and drive better outcomes. Maniv is backed by some of the world's leading automotive, transportation, infrastructure and energy companies. Dynamo Ventures Dynamo invests in extraordinary founders building technology businesses in supply chain and mobility. Fontinalis Partners About: Fontinalis Partners, with offices in Detroit and Boston, is a venture capital firm strategically focused on next-generation mobility. Thesis: Macro trends are driving demand, Mobile & big data are catalyzing growth, Proven technology can be scaled globally, A strategic approach enhances value creation Schematic Ventures Schematic Ventures is an early-stage venture capital fund located in San Francisco. The fund is focused on investments in technology companies within supply chain, manufacturing, commerce infrastructure & digital industrial sectors. AutoTech Ventures About: Autotech Ventures is a venture capital firm focusing on the ground transportation sector. Thesis: We invest globally in seed through series C startups solving ground transport challenges related to connectivity, autonomy, shared-use, electrification, and digitization of enterprise. TA Ventures 1843 is a technology-focused venture capital firm supporting Series A startups with diverse founding teams. Our team brings 40+ years of combined experience in venture investing, hardware, software and operations. We have taken companies from start to exit and have the track record to prove it. We leverage our deep, personal networks as a unique competitive advantage for deal flow and portfolio support. We have an extensive network of committed global advisors including successful founders, leading operators, and co-investors dedicated to supporting the growth of our portfolio companies. Key Investment Trends in Transportation The transportation sector is undergoing significant transformation, driven by technological advancements and evolving consumer preferences. VCs are actively channeling funds into several key areas, reflecting current industry trends and future growth potential. Sustainable Transportation Investors are increasingly prioritizing startups that offer eco-friendly solutions, such as electric vehicles (EVs), hydrogen fuel cells, and alternative energy sources. The European Union, for instance, needs to invest €39 billion annually to meet its 2050 net-zero transport targets, underscoring the emphasis on sustainability. Related resource: Guide to CleanTech and Climate Tech in 2024 + Top VCs Investing AI in Logistics AI is revolutionizing logistics by enhancing route optimization, demand forecasting, and supply chain efficiency. Startups leveraging AI to improve operational efficiency and reduce costs are attracting significant VC interest. For example, Volvo Group Venture Capital invested in aifleet, a U.S.-based company utilizing AI to reshape trucking operations. Related resource: The Role of AI in Startups and Venture Capital + Top VCs Investing in AI Shared Mobility Solutions The rise of ride-sharing, car-sharing, and micro-mobility platforms is reshaping urban transportation. VCs are funding startups that offer innovative shared mobility services, catering to the growing demand for flexible and cost-effective transportation options. Examples are Lime, Miles, and Turo. InDrive, a transportation services startup, launched a venture arm to invest in startups aimed at geographical expansion. Regulatory Technology (RegTech) Navigating complex transportation regulations is a significant challenge. Startups developing RegTech solutions to streamline compliance processes are gaining attention from investors as they help companies adhere to evolving standards efficiently. What Transportation Startups Should Prepare for Fundraising In the transportation sector, attracting venture capital requires more than just a compelling idea. Investors expect startups to clearly understand the industry’s demands and challenges, backed by hard data and strategic planning. Here’s what transportation startups should prioritize to improve their chances of successful fundraising. Data-Driven Impact For transportation startups, showcasing traction and impact with data is essential. Investors want to see measurable progress, such as route efficiency improvements, emissions reductions, or cost savings that prove the startup’s value proposition. Metrics like miles saved per vehicle, percentage reduction in carbon emissions, and cost efficiency can demonstrate a startup’s tangible impact, differentiating it from competitors. Presenting data-driven results establishes credibility and shows that the startup has a scalable, replicable model that could yield a high return on investment. Related resource: Our Favorite Posts for Sharing Documents, Decks, and Data While Fundraising Regulatory Knowledge Understanding and navigating transportation regulations is a significant hurdle that can make or break a startup’s success. Local, state, and international regulations vary widely, covering aspects like vehicle safety, emissions standards, and logistics protocols. Investors need to be confident that the startup is aware of these regulations and has strategies for compliance across different markets. This knowledge mitigates potential risks, ensuring smoother scalability and long-term viability. Demonstrating regulatory understanding shows VCs that the startup is well-prepared for expansion and can avoid costly regulatory setbacks. Capital Requirements Transportation is a capital-intensive sector, especially for startups dealing with hardware or infrastructure-heavy operations like autonomous vehicles or logistics networks. High R&D, manufacturing, and operational scaling costs require a solid financial plan. Founders should prepare detailed financial projections, including capital expenditure, cash flow, and expected funding stages. Investors appreciate founders with a realistic understanding of capital requirements and a roadmap for sustaining growth over time. Secure Venture Capital for Your Transportation Startup with Visible Raising capital for a transportation startup is about more than just innovation - it calls for careful planning, industry know-how, and a supportive network. Visible offers tools to help transportation founders stay connected with investors, track performance, as well as present key metrics like route efficiency and cost savings. Find investors at the top of your funnel with our free investor database, Visible Connect. Here's a prefiltered list of VCs active in the transportation sector. Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

High Alpha, in partnership with OpenView, teamed up to explore pricing models, churn, AI adoption, financial performance, and more in the 2024 SaaS Benchmarks Report. Mike Fitzgerald and Blake Koriath of High Alpha joined us to dive into the report, highlighting key trends, data points, and themes. A couple of key areas we hit on: The makeup of the report Market stabilization and expectations in today's market vs. previous years Vertical vs. Horizontal SaaS performance Why GTM execution is keeping founders up at night How companies are balancing burn and growth And much more Download the full report to uncover other trends and benchmarks below:

Understanding your startup's potential for growth is crucial in determining how to allocate resources, set goals, and attract investors. One of the key metrics to evaluate is your Service Obtainable Market (SOM)—the portion of the market your company can realistically capture. In this article, we will break down what SOM is, how it differs from other market metrics like total addressable market (TAM) and Serviceable Available Market (SAM), and why it is essential for building a focused, sustainable strategy. You'll also learn how to calculate your SOM and how it helps refine your projections and increase investor confidence. Related resource: How to Model Total Addressable Market (Template Included) What is Service Obtainable Market (SOM)? The Service Obtainable Market represents the portion of your total addressable market that your startup can realistically capture based on its current resources, capabilities, and competitive positioning. It is a refined market segment that takes into account the realities of your business—such as sales capacity, distribution channels, and brand recognition. While other metrics like TAM and SAM offer a broader view of market potential, SOM gives a grounded estimate of what’s achievable. For startups, this figure is crucial in shaping strategy, defining target customers, and setting realistic revenue expectations. Factors of Service Obtainable Market Several factors influence your Service Obtainable Market, helping you determine the most realistic portion of the market you can capture. These include: Market Size and Reach The size of the total addressable market (TAM) sets the foundation for calculating Service Obtainable Market. However, your actual reach depends on your geographic footprint, target demographics, and ability to effectively penetrate the market. Related resource: Bottom-Up Market Sizing: What It Is and How to Do It Product The uniqueness and quality of your product will impact how much of the market you can capture. A product that meets specific needs or offers a strong value proposition can help you stand out and gain a larger share of the market. Competition The level of competition in your industry will directly affect your SOM. A highly competitive market may limit your share, while a niche market or one with fewer competitors can increase your potential capture. Historical Performance and Research Your past sales data and market research are valuable in estimating Service Obtainable Market. Trends in customer acquisition, product adoption, and overall performance provide a realistic basis for forecasting future growth within the obtainable market. Understanding SOM, SAM, and TAM To grasp the full scope of your startup’s market opportunity, it’s essential to understand three key metrics: TAM, SAM, and SOM. While TAM represents the total market demand for your product or service, SAM narrows it down to the portion you can serve based on your business model. SOM refines this even further, focusing on the market you can realistically capture given your resources and competitive positioning. Let’s explore these differences in more detail. Related resource: Total Addressable Market: Lessons from Uber’s Initial Estimates Service Available Market (SAM) vs. Service Obtainable Market (SOM) Service Available Market (SAM) refers to the portion of the total market that your business can serve, based on factors such as your product offering, geographic reach, and target audience. It reflects the customers you could potentially access with your current business model. On the other hand, Service Obtainable Market is a smaller, more realistic portion of SAM. It takes into account not only your ability to serve the market but also your competitive landscape, internal resources, and operational constraints. In essence, SOM is the market share you can realistically expect to capture in the short term. Total Addressable Market (TAM) Total Addressable Market (TAM) is the broadest metric of the three. It represents the total market demand for your product or service, assuming no competition or barriers to entry. TAM reflects the largest possible revenue opportunity available, but it often includes customers or segments beyond your reach or interest. While TAM gives you a big-picture view of the entire market, SAM and SOM help you zoom in on the more actionable portions, with SOM being the most precise estimate of what your startup can capture in the near term. Related resources: Total Addressable Market vs Serviceable Addressable Market What Is TAM and How Can You Expand It To Grow Your Business? How to Calculate Your Service Obtainable Market Calculating your Service Obtainable Market (SOM) is essential for setting realistic business goals and crafting an effective market strategy. While TAM and SAM provide a broader view of potential opportunities, SOM focuses on what your startup can actually capture in the market based on your resources and competitive strengths. To calculate Service Obtainable Market, you'll need to break down your market step by step, narrowing from the largest possible market to the portion you can truly serve. Let’s walk through the process of calculating SOM and how each step contributes to a precise understanding of your market opportunity. Step 1: Define Your Total Addressable Market (TAM) The first step in calculating your Service Obtainable Market is to define your Total Addressable Market the largest possible market for your product or service. To identify your TAM, you’ll need to evaluate the full demand for your offering across all potential customer segments, without considering competition or operational limitations. Start by answering these key questions: Who are your potential customers? Identify all possible user groups or industries that would benefit from your product. What is the overall market size? Research the total number of customers or the revenue potential in your market globally or within your target regions. How big is the need or demand for your product? Assess the pain points your product addresses and the number of customers affected by these challenges. By combining industry data, market reports, and demographic insights, you can estimate the maximum revenue potential of your product or service in its ideal conditions—this is your TAM. Step 2: Narrow to Your Serviceable Available Market (SAM) Once you’ve defined your Total Addressable Market (TAM), the next step is to narrow it down to your Serviceable Available Market (SAM)—the portion of the market that you can realistically serve, based on your business model, product offering, and geographic reach. To assess your SAM, consider the following: Business Model: Which customers can you effectively serve with your current sales, distribution, and operational models? Some markets might be out of reach due to logistical or operational constraints. Product Fit: Focus on the customer segments where your product or service directly addresses specific needs or problems. Not every customer in the TAM will find your solution relevant. Geographic Limitations: Evaluate the regions where your business operates or where you plan to expand. Factors like local demand, regulations, and shipping constraints can limit which parts of the TAM are accessible to you. By refining your TAM with these considerations, your SAM represents the subset of customers that you have the capability and infrastructure to reach and serve. Step 3: Identify Your Competitive Edge To determine your Service Obtainable Market (SOM), you need to identify your competitive edge—the unique advantages that set your startup apart from others in the market. This step involves analyzing your differentiators, understanding market barriers, and assessing your competition to pinpoint your realistic market share. Consider the following: Differentiators: What makes your product or service stand out? This could be superior technology, pricing, customer experience, or unique features that competitors lack. Your ability to leverage these differentiators will help capture a larger portion of the market. Market Barriers: Identify any barriers to entry, such as high development costs, regulatory requirements, or brand loyalty to existing competitors. These barriers can limit your market access and must be factored into your SOM calculation. Competitors: Analyze your competitors' market share, customer loyalty, and positioning. Understanding their strengths and weaknesses will help you identify untapped opportunities where your startup can outperform or gain a foothold. By combining these insights, you’ll be able to estimate the portion of the SAM that you can realistically capture, giving you a clear picture of your Service Obtainable Market. Step 4: Calculate SOM Now that you’ve identified your competitive edge and assessed the market, it’s time to calculate your Service Obtainable Market. To do this, you'll need to apply real-world factors such as sales capacity, market penetration, and your ability to reach customers within your Serviceable Available Market. A simple formula to calculate Service Obtainable Market is: SOM = SAM × Market Penetration Rate For example, if your SAM is valued at $10 million and your startup's estimated market penetration rate is 10%, your SOM would be: SOM = $10,000,000 × 0.10 = $1,000,000 This means that, based on your current resources and competitive position, you can realistically expect to capture $1 million of the $10 million available market. The market penetration rate can be influenced by factors like your sales team’s capacity, marketing effectiveness, and brand awareness. By using this formula, you can calculate a more grounded estimate of your startup’s revenue potential within the Serviceable Available Market (SAM). Why Service Obtainable Market Matters for Startups Understanding your Service Obtainable Market is more than just a calculation—it’s a key element in shaping your startup’s strategy and ensuring sustainable growth. For startups, having a clear view of SOM allows for smarter decision-making, from resource allocation to revenue forecasting. By focusing on a realistic portion of the market, founders can set achievable goals, secure investor confidence, and avoid overextending their business too early. In the following sections, we’ll explore the specific ways SOM impacts your startup’s strategy, projections, and long-term success. Focused Strategy Knowing your Service Obtainable Market helps your startup stay focused by clearly defining the portion of the market you can realistically target. Instead of spreading your resources too thin trying to capture an overly broad audience, Service Obtainable Market allows you to concentrate on the most relevant customer segments. This focus ensures that your marketing, sales, and operational efforts are directed toward the right customer base—those who are most likely to convert. By avoiding the trap of overextending into markets where your resources, product fit, or brand presence are lacking, you can optimize your efforts and build sustainable growth more effectively. Realistic Revenue Projections Your Service Obtainable Market provides a solid foundation for creating accurate sales forecasts and revenue models. By focusing on the market you can realistically capture, SOM allows you to project revenues based on achievable goals rather than overly optimistic estimates. This level of precision is critical when presenting your business to potential investors, as they expect realistic financial models backed by data. Accurate revenue projections help ensure that your growth planning is sustainable and aligned with your current resources, making it easier to set clear milestones and secure the funding you need to scale. Resource Allocation Identifying your Service Obtainable Market enables your startup to allocate resources more efficiently across marketing, sales, and operations. By understanding exactly which portion of the market you can realistically capture, you can focus your efforts on the most promising opportunities. This targeted approach ensures that marketing budgets are spent on channels with the highest conversion potential, sales teams can prioritize leads most likely to close, and operational resources are scaled according to actual demand. Instead of spreading your team and resources too thin, SOM helps you streamline efforts to maximize impact and achieve better results with fewer resources. Investor Confidence Having a clear Service Obtainable Market (SOM) is a strong signal to investors that your startup has a realistic and achievable market strategy. Investors are looking for startups that understand their market deeply and have a plan that balances ambition with practicality. By demonstrating that you’ve calculated your SOM based on data-driven insights and realistic assumptions, you show investors that your growth projections are grounded in reality. This boosts their confidence in your ability to execute your business plan, allocate resources wisely, and achieve sustainable growth, making it easier to secure the funding needed to scale your operations. Connect with Investors with Visible Understanding your Service Obtainable Market is essential for shaping your startup’s strategy, creating realistic revenue projections, and efficiently allocating resources. By focusing on the market you can realistically capture, you position your business for sustainable growth and build investor confidence. As you refine your market approach and seek funding, having the right tools to engage with investors is critical. Visible can help you manage your investor relationships and provide the insights you need to stay on top of your fundraising efforts. Track key metrics, send investor Updates, and track the status of your next fundraise with Visible. Give it a free try for 14 days here.

In the fast-paced world of startups, tracking the right metrics is crucial for success. Among these, Lead Velocity Rate (LVR) stands out as a key indicator of business growth. LVR quantifies the increase in qualified leads over time, offering insights into future revenue potential. Unlike metrics that reflect past performance, LVR provides a forward-looking view, helping startups refine their strategies and predict future sales. By consistently monitoring LVR, startups can gauge their market traction, enhance their marketing efforts, and attract investor confidence, making it an indispensable tool for sustained growth and success. What is Lead Velocity Rate (LVR)? LVR is a metric that measures the growth rate of qualified leads over a specific period, typically month-over-month. It calculates the percentage increase in the number of qualified leads, providing startups with a clear picture of their lead generation efforts and potential future sales. LVR is significant because it acts as a predictive indicator of future revenue. While metrics like Monthly Recurring Revenue (MRR) and overall revenue reflect past performance, LVR offers insights into future growth by highlighting trends in lead generation. By tracking LVR, startups can understand their market traction, evaluate the effectiveness of their marketing strategies, and make informed decisions to drive future growth. For example, if a startup had 200 qualified leads last month and 250 this month, the LVR would be calculated as follows: LVR = (250−200) / 200 x 100 = 25% This 25% increase indicates a positive trend in lead generation, suggesting that the startup’s marketing and sales efforts effectively attract more potential customers. LVR helps startups predict future sales growth, assess their current marketing strategies, and make data-driven decisions to optimize their lead-generation processes. Tracking LVR regularly allows founders to stay ahead of the curve, ensuring sustained growth and success. Lead Velocity Rate vs. Customer Lifetime Value (CLV) LVR and Customer Lifetime Value (CLV) are both critical metrics for startups, but they serve different purposes and provide distinct insights. Lead Velocity Rate (LVR) measures the growth rate of qualified leads over a specific period, typically on a month-over-month basis. It calculates the percentage increase in the number of leads that meet predefined criteria for quality, such as those who have shown a strong interest in the product or service. LVR is a forward-looking metric, offering predictive insights into future revenue potential by indicating how effectively a startup is generating new leads. Essentially, it helps startups understand the momentum of their lead generation efforts and anticipate future sales growth. Customer Lifetime Value (CLV), on the other hand, assesses the total revenue a customer is expected to generate over the entire duration of their relationship with a business. It considers the average purchase value, purchase frequency, and customer lifespan to estimate the overall financial contribution of a customer. CLV is a backward-looking metric that focuses on the value derived from existing customers, providing insights into customer retention, satisfaction, and long-term profitability. It helps startups understand the financial impact of their customer base and make strategic decisions regarding customer acquisition and retention efforts. Why Lead Velocity Rate is an Important Metric for Startups LVR is one of the most important metrics for startups to track because it provides a clear and actionable insight into a company’s growth trajectory. Unlike historical metrics such as MRR and overall revenue, LVR is a forward-looking indicator that measures the growth of qualified leads over time. This makes it a crucial tool for predicting future revenue and assessing the effectiveness of marketing strategies. Lead Velocity Rate is not just a metric; it is a vital tool that enables startups to predict growth, optimize marketing efforts, and secure investor interest. By tracking LVR regularly, startups can ensure they are on the right path to sustained growth and success. Measuring Growth Momentum Lead Velocity Rate provides a clear and quantifiable measure of a startup's growth momentum by tracking the increase in qualified leads over time. This metric allows startups to see how well their lead generation efforts are working, offering a tangible indicator of market traction. By regularly monitoring LVR, startups can identify trends in lead growth, adjust their marketing strategies, and ensure they are continually attracting new potential customers. A rising LVR indicates that the startup’s efforts are translating into more qualified leads, which is a strong sign of growing market interest and business momentum. Predictive Power LVR is a powerful leading indicator of future revenue and business performance. Unlike historical metrics, which only show what has already happened, LVR provides a forward-looking perspective by measuring the growth of new leads. This allows startups to predict future sales more accurately, as an increasing LVR suggests a robust pipeline of potential deals. By understanding and leveraging LVR, startups can forecast their revenue more effectively, align their sales and marketing efforts with anticipated growth, and make proactive decisions to sustain or accelerate their upward trajectory. Financial Health Assessing the financial health of a startup is crucial for long-term success, and LVR plays a key role in this evaluation. A high LVR indicates that a startup is successfully generating a growing number of qualified leads, which is essential for sustaining revenue growth. This metric helps startups understand whether their lead generation strategies are effective and whether they have a strong foundation for future financial stability. By tracking LVR, startups can ensure they are building a healthy pipeline that supports continuous revenue generation and overall business health. Investor Confidence LVR serves as a powerful tool for attracting investors by demonstrating that a startup is on an upward growth trajectory. Investors look for startups with strong growth potential, and a consistently increasing LVR is a clear indicator of this. It shows that the startup is effectively generating new leads and has a promising outlook for future revenue. By presenting a high LVR, startups can enhance their credibility and appeal to investors, showcasing their ability to grow and succeed in a competitive market. This metric can significantly boost investor confidence and increase the likelihood of securing funding. Related resource: Why Revenue Per Lead is Really Important to Track How to Calculate Lead Velocity Rate Calculating LVR is straightforward and provides valuable insights into your startup’s growth potential. Understanding how to measure LVR enables startups to track the effectiveness of their lead-generation strategies and predict future sales. The process involves comparing the number of qualified leads from one month to the next, clearly showing how well your marketing and sales efforts are performing. By consistently calculating LVR, startups can make informed decisions to optimize their growth strategies and ensure sustained success. Lead Velocity Rate Formula The formula for calculating Lead Velocity Rate is simple and easy to apply. Here’s the basic formula: LVR = (Number of Qualified Leads This Month − Number of Qualified Leads Last Month) / Number of Qualified Leads Last Month × 100 To illustrate, if a startup had 200 qualified leads last month and 250 this month, the calculation would be: LVR = (250 − 200) / 200 × 100 = 25% This 25% increase in qualified leads indicates a positive trend in lead generation, suggesting that the startup’s efforts to attract potential customers are effective. By regularly calculating and monitoring LVR, startups can track their growth momentum, anticipate future sales, and refine their marketing strategies to maximize lead generation. Related resource: Developing a Successful SaaS Sales Strategy Challenges and Considerations for Tracking LVR While Lead Velocity Rate is an invaluable metric for startups, accurately tracking and utilizing it involves overcoming several challenges and considerations. Ensuring the reliability of LVR requires a focus on data accuracy, timeliness, and a holistic evaluation of metrics. Understanding these factors is essential for leveraging LVR effectively and making informed strategic decisions. Data Accuracy and Consistency LVR relies heavily on the accuracy and consistency of data. Accurate LVR calculations depend on precise and complete data regarding the number of qualified leads. Any inaccuracies or inconsistencies in data collection can skew LVR results, misrepresenting a startup's growth trajectory. Therefore, startups must implement rigorous data collection and validation processes to ensure that the information used for LVR calculations is reliable and consistent over time. Timeliness of Data Timely data collection and reporting are crucial for accurate LVR measurements. LVR calculations require up-to-date data on qualified leads to accurately reflect the current state of lead generation. Data collection and reporting delays can result in outdated or irrelevant LVR calculations, which may not align with real-time decision-making needs. Startups must establish efficient data collection systems and workflows to ensure LVR calculations are based on the most current available data. Holistic Metrics Evaluation While LVR is a powerful metric, it should not be viewed in isolation. LVR should be considered alongside other KPIs such as Customer Acquisition Cost, Customer Lifetime Value, and Monthly Recurring Revenue for a comprehensive understanding of business performance. A holistic evaluation of these metrics provides a more complete picture of a startup's financial health, growth potential, and overall business performance. Balancing LVR with other KPIs allows startups to make more informed and strategic decisions. Related resource: Your Company’s Most Valuable Metric Secure Investor Interest with Visible Lead Velocity Rate is a critical metric for startups, providing valuable insights into growth momentum, future revenue potential, and overall financial health. By accurately calculating and consistently tracking LVR, startups can measure their lead generation effectiveness, predict business performance, and attract investor confidence. Addressing challenges related to data accuracy, timeliness, and holistic metrics evaluation ensures that LVR serves as a reliable and powerful tool for driving strategic decisions. To maximize the benefits of LVR and other key performance indicators, consider using Visible’s all-in-one platform to track and visualize your startup’s metrics - create your account here! We want to hear from you. What is your Most Valuable Metric? Tell us here and we will share the results with the contributors! Want to be alerted of our new blog posts? Subscribe to our email list. Some more great posts about LVR http://saastr.com/2012/12/12/why-lead-velocity-rate-lvr-is-the-most-important-metric-in-saas http://www.revenify.com/important-metric-saas-lead-momentum-description-lead-velocity http://www.referralsaasquatch.com/how-to-calculate-saas-growth

In the fast-paced world of startups, the right leadership structure can make or break a company’s success. While the CEO drives daily decisions and steers the company toward its vision, an advisory board provides external expertise, strategic insights, and valuable industry connections. These two entities create a powerful dynamic that helps founders navigate challenges and seize growth opportunities. In this article, we’ll explore the distinct roles of CEOs and advisory boards, their responsibilities, and how their collaboration can build a leadership framework that accelerates your startup’s growth. Overview of the Advisory Board and CEO What is an Advisory Board? An advisory board is a non-fiduciary group of external experts brought together to provide strategic guidance and specialized insights to a company. Unlike an executive board, which holds governance responsibilities, advisory boards focus solely on advising the CEO and executive team on critical decisions, growth opportunities, and challenges. They act as a sounding board for ideas, offering fresh perspectives without the legal or financial obligations tied to corporate oversight. This flexibility allows advisory boards to focus on high-level strategic planning, networking, and mentoring. What is a CEO? The CEO, or Chief Executive Officer, is the highest-ranking executive responsible for the company's overall management, strategy, and direction. Tasked with setting and achieving the organization’s goals, the CEO oversees daily operations, builds and leads the executive team, and ensures alignment with the company’s vision, mission, and values. Additionally, the CEO serves as the face of the company, representing it to investors, customers, and stakeholders. With fiduciary duties and ultimate accountability for the company's performance, the CEO plays a pivotal role in turning strategic goals into tangible outcomes. How Does the Role of a CEO Differ From That of an Advisory Board? The roles of a CEO and an advisory board differ significantly in scope, responsibilities, and authority. A CEO is an executive leader directly responsible for the company's daily operations, strategic execution, and overall success. They hold fiduciary duties and have the authority to make critical decisions that affect the organization’s trajectory, from hiring key executives to managing financial performance. An advisory board, on the other hand, functions as a non-fiduciary entity, providing guidance and expertise without direct involvement in operational decision-making. While the CEO executes and enforces decisions, the advisory board offers insights, feedback, and external perspectives to aid the CEO and leadership team refine strategies and address challenges. This dynamic allows CEOs to leverage the advisory board’s collective expertise without relinquishing control over the company’s direction. What is the Difference Between an Executive Board and an Advisory Board? An executive board and an advisory board differ primarily in their purpose, authority, and responsibilities within a company. Executive Board An executive board, often called the board of directors, has formal governance responsibilities. Its members hold fiduciary duties to the company and its shareholders, ensuring the organization operates ethically, legally, and in alignment with its strategic goals. The executive board makes key decisions on executive hiring, budget approval, and setting long-term objectives. Its authority allows it to influence or override decisions made by the CEO, holding the power to hire or dismiss employees if necessary. Advisory Board An advisory board, on the other hand, is a non-fiduciary group with no governance authority. It exists solely to provide expert advice, strategic guidance, and industry-specific insights. Unlike an executive board, it does not have the power to enforce decisions or hold the CEO accountable. Its informal structure allows it to operate flexibly, focusing on supporting the CEO and leadership team without the legal obligations tied to corporate governance. Related resource: How To Build a Board of Directors That Actually Helps Key Responsibilities of the Advisory Board An advisory board plays a vital role in shaping a company’s strategy and supporting its leadership team. While it does not have decision-making authority, its members provide valuable insights from their expertise, industry experience, and professional networks. This collaborative group serves as a trusted resource for the CEO and executive team, helping to refine strategies, identify opportunities, and address challenges. In the sections below, we’ll explore the core responsibilities of an advisory board and how they contribute to a company’s success. Strategic Guidance One of the primary responsibilities of an advisory board is to provide high-level strategic guidance to the company’s leadership team. Advisory board members, often seasoned professionals with deep industry knowledge, offer objective advice on market trends, competitive positioning, and long-term growth opportunities. This external perspective can be invaluable for CEOs, who may be too immersed in the day-to-day operations to see the bigger picture. Advisory boards help refine the company’s strategic direction by evaluating existing plans, identifying potential risks, and suggesting adjustments to align with market dynamics. Their input can be particularly beneficial during critical moments, such as entering a new market, launching a product, or pivoting the business model. By leveraging their expertise, advisory boards enable startups to make informed decisions that maximize growth potential and minimize unnecessary risks. Industry Expertise Advisory boards bring specialized knowledge and deep industry expertise that can significantly benefit a company’s leadership team. These experts often have decades of experience in the field, allowing them to provide insights into market dynamics, emerging trends, and competitive landscapes. Their expertise can help startups navigate complex industries, avoid common pitfalls, and seize opportunities that align with their strengths and goals. For example, an advisory board member with a strong background in technology could guide a startup in selecting the right tools for scalability or staying ahead of technological disruptions. Similarly, members with sector-specific experience can offer tailored advice on regulatory requirements, customer behavior, and industry best practices. This targeted knowledge ensures that startups operate effectively within their industry and position themselves for sustainable success. Networking and Connections Advisory boards are crucial in expanding a company’s network by opening doors to valuable connections. These members often bring extensive professional relationships with potential investors, industry leaders, strategic partners, and key clients. Leveraging their networks can accelerate opportunities that would take significant time and resources. For startups, this access can be transformative. Advisory board members might introduce the company to venture capital firms for fundraising, connect them with potential customers to validate products or establish relationships with partners to drive growth. These introductions save time and add credibility, as the advisory board’s endorsement can carry significant weight. By connecting startups to the right people, advisory boards help companies build strategic alliances that strengthen their position in the market. Mentorship and Coaching Advisory boards often serve as mentors and coaches for the CEO and the executive team, helping them grow as leaders and navigate challenges. This support is especially critical for startup founders stepping into leadership roles for the first time. Advisory board members provide guidance on effective decision-making, leadership development, and organizational management, drawing from their own experiences and expertise. Advancing boards can help CEOs enhance their communication, conflict resolution, and team-building skills by offering personalized advice. They also act as sounding boards for ideas, providing constructive feedback and fostering confidence in the leadership team. This mentorship ensures company leaders are better equipped to drive the organization forward while maintaining a clear and cohesive vision. Objective Feedback and Risk Management An advisory board provides a vital external perspective, offering unbiased feedback on a company’s strategies, challenges, and overall performance. Unlike internal stakeholders, advisory board members are not directly involved in the company’s operations, allowing them to evaluate decisions objectively. This detachment enables them to provide constructive criticism, highlight potential blind spots, and suggest alternative approaches that may not be immediately apparent to the leadership team. In addition to feedback, advisory boards play a significant role in identifying and managing risks. They assess the company’s exposure to financial, operational, and strategic risks, drawing on their expertise to recommend proactive measures. For example, an advisory board might point out potential regulatory hurdles, market dynamics shifts, or business model vulnerabilities. By offering insights into these challenges, the advisory board equips the CEO and executive team to make informed decisions and build resilience against uncertainty. Key Responsibilities of the CEO The CEO drives a company’s growth and success, balancing visionary leadership with practical execution. Unlike the advisory board, which offers guidance and support, the CEO is responsible for making critical decisions, overseeing daily operations, and ensuring the organization achieves its goals. The CEO's role is multifaceted and pivotal, from aligning the company’s vision with its strategy to managing relationships with investors and stakeholders. In the sections below, we’ll explore a CEO's key responsibilities and highlight how their leadership impacts every aspect of the business, from operations to culture and performance. Vision and Mission Alignment One of the core responsibilities of a CEO is to define, communicate, and execute the company’s vision, mission, and values. The CEO sets the tone for the organization’s direction, ensuring that all teams and efforts align with a cohesive and inspiring purpose. By articulating a clear vision, the CEO provides a roadmap that guides the company’s strategic goals and motivates employees to work toward a common objective. The CEO also ensures that the company’s mission- its reason for existing- is deeply embedded in its culture and operations. This involves crafting mission statements, and leading by example, making decisions that reflect the organization’s core values. Whether driving product innovation or building partnerships, the CEO’s commitment to the vision and mission ensures consistency and fosters a strong sense of identity across the organization. Operational Management The CEO oversees the company’s daily operations and ensures that all departments work seamlessly toward achieving organizational goals. This involves making executive decisions on resource allocation, setting performance targets, and establishing processes that drive efficiency and productivity. The CEO focuses on operational priorities and ensures the company remains on track to meet its strategic objectives. In addition to managing the company’s current operations, the CEO also anticipates and adapts to changes in the business environment. This requires a hands-on approach to problem-solving and the ability to pivot strategies when necessary. By balancing high-level oversight with attention to detail, the CEO is critical in creating a structured yet flexible operational framework that supports sustainable growth. Team Leadership The CEO is responsible for building and managing the executive team while fostering a collaborative and productive company culture. A successful CEO identifies and recruits top talent, ensuring the leadership team has the skills and experience to achieve the organization’s goals. Beyond hiring, the CEO actively develops this team, empowering leaders to excel in their roles and drive performance across departments. In addition to managing the executive team, the CEO sets the tone for the company culture by embodying its core values. The CEO fosters collaboration, innovation, and employee trust through effective communication, motivation, and example-setting. By cultivating a strong team and a cohesive culture, the CEO ensures the organization operates as a unified and efficient entity, ready to tackle challenges and seize opportunities. Fundraising and Investor Relations One of the CEO’s critical responsibilities is leading the company’s fundraising efforts and managing investor relationships. As the face of the company, the CEO plays a pivotal role in securing the capital needed to fuel growth and achieve strategic objectives. This involves crafting compelling pitches, presenting a clear business case, and demonstrating a deep understanding of the company’s financials and market potential to potential investors. In addition to raising funds, the CEO builds and maintains strong relationships with current investors. This includes regularly updating the company’s progress, addressing concerns, and fostering trust through transparency and accountability. By effectively managing these relationships, the CEO ensures continued investor confidence and positions the company for long-term financial stability and success. Accountability and Performance A CEO is accountable for the company’s success, ensuring it meets its goals and delivers results to stakeholders. This involves setting measurable objectives, monitoring performance across all levels of the organization, and making adjustments as needed to stay on track. The CEO establishes KPIs and benchmarks to evaluate the company’s progress and uses this data to guide strategic decisions. In addition to internal accountability, the CEO reports to the board of directors (if applicable) and other stakeholders. This includes providing updates on financial performance, operational milestones, and long-term plans. By maintaining transparency and taking ownership of outcomes- successes and failures- the CEO fosters trust among employees, investors, and the board, ensuring alignment and support for the company’s vision. How Advisory Boards and CEOs Collaborate The relationship between a CEO and an advisory board is one of mutual benefit and shared purpose. While the CEO focuses on executing the company’s vision and managing operations, the advisory board provides the external insights, expertise, and connections needed to refine strategies and navigate challenges. Together, they form a dynamic partnership that blends hands-on leadership with high-level guidance. In the sections below, we’ll explore how this collaboration unfolds, from strategic planning to problem-solving and offering objective perspectives that strengthen decision-making. Related resource: Advisory Shares Explained: Empowering Entrepreneurs and Investors Strategic Planning Advisory boards are crucial in shaping a company’s long-term strategy by offering insights that complement the CEO’s vision and operational knowledge. CEOs often leverage the expertise of advisory board members to refine strategic goals, assess market opportunities, and identify potential risks. This collaboration ensures that strategic plans are ambitious and grounded in practical, data-driven insights. With their external perspectives and industry experience, advisory board members can highlight trends, competitive threats, or emerging opportunities that might take time to be visible to the CEO. For example, they may suggest entering a new market, adopting innovative technologies, or reevaluating the company’s value proposition to stay ahead of industry shifts. By integrating these insights into strategic planning, CEOs can craft robust, forward-looking strategies that position the company for sustainable growth. Problem-Solving The collaboration between a CEO and an advisory board becomes especially valuable when addressing specific challenges or navigating periods of crisis or pivot. In these situations, the CEO benefits from the advisory board’s diverse perspectives, specialized knowledge, and ability to analyze problems externally. This partnership allows for creative and well-informed solutions that might not emerge from internal discussions alone. The advisory board can provide actionable advice on damage control and recovery strategies during a crisis such as a sudden market downturn, supply chain disruption, or reputational issues. Similarly, when a company needs to pivot its business model or adapt to changing market demands, the advisory board’s expertise can guide the CEO in evaluating options, mitigating risks, and implementing changes effectively. These two entities create a robust problem-solving framework that strengthens the company’s resilience and adaptability by working together. Objective Perspectives An advisory board provides an invaluable outside viewpoint that complements the CEO’s internal role by offering unbiased feedback and fresh perspectives on the company’s strategies and challenges. While the CEO is deeply involved in the day-to-day operations and decision-making, advisory board members remain detached from the company’s internal dynamics, allowing them to evaluate situations with clarity and impartiality. This objectivity helps the CEO avoid potential blind spots or tunnel vision, particularly in high-stakes situations where internal pressures may cloud judgment. Advisory board members can challenge assumptions, propose alternative approaches, and ensure decisions align with long-term goals rather than short-term pressures. Their detached yet invested role enables them to serve as trusted advisors, providing clarity and balance to the CEO’s leadership efforts. Bolster Your Investor Relations with Visible Understanding the distinct roles of a CEO and an advisory board is key to building a strong leadership framework. While the CEO drives operations and strategic execution, the advisory board offers expert insights, industry connections, and objective guidance to refine decisions and navigate challenges. Together, they create a balanced partnership that fosters growth and resilience. For startups looking to strengthen their investor relationships, Visible lets you track key metrics, send investor updates, and track the status of your next fundraise all in one place. Give it a free try for 14 days here. Related resource: How to Effectively Find + Secure Angel Investors for Your Startup

Building a robust support network can be a game-changer in the startup world, and advisory boards are pivotal in making that happen. But as you consider adding advisors, questions around compensation- such as whether to offer cash, equity, or both- often arise. In this article, we’ll explore what an advisory board is, how it differs from a board of directors, and the various compensation structures typically used for advisors. We'll also cover advisory boards' valuable roles, from strategic guidance to networking, helping you make informed decisions on assembling and compensating an advisory board that drives your startup’s growth. What Is an Advisory Board? An advisory board is a group of external experts brought together to provide strategic guidance and specialized knowledge to a startup’s leadership team. Unlike a board of directors, advisory board members don’t have legal responsibilities or decision-making authority within the company. Instead, they serve as mentors and advisors, offering insights on specific challenges, market trends, and growth opportunities. They complement the leadership team’s skills by filling in knowledge gaps, providing an objective perspective, and leveraging their professional networks. An advisory board can be a valuable resource for startups, helping shape the company’s strategic direction, positioning it competitively, and supporting its long-term growth goals. Advisory Board vs. Board of Directors While advisory boards and boards of directors both contribute to a company’s growth, they serve distinct roles and responsibilities. A board of directors has legal obligations and fiduciary duties to the company and its shareholders, with the authority to make binding decisions on critical matters, such as strategic planning, corporate governance, and executive appointments. Shareholders typically elect members of a board of directors and are accountable for overseeing the company’s management. In contrast, an advisory board operates in a more informal, non-binding capacity. Advisory board members are selected for their expertise and industry insights, offering strategic advice without directors' legal responsibilities or decision-making power. This flexibility allows them to focus solely on providing specialized knowledge and recommendations, helping guide the leadership team without the constraints of formal governance. Related resource: How To Build a Board of Directors That Actually Helps Do Advisory Board Members Typically Get Paid? Advisory board compensation varies across industries and depends on several key factors, such as the startup's stage, the advisor's expertise, and the expected time commitment. Early-stage startups with limited budgets may offer advisors equity instead of cash, aligning compensation with the company's growth potential. This approach is common for startups still scaling and may not have the cash flow for direct payments. In contrast, more established startups with stable finances might opt to compensate advisors with cash, equity, or a combination of both. Related resource: Advisory Shares Explained: Empowering Entrepreneurs and Investors Several factors influence whether and how much advisors are paid: Startup Stage: Early-stage startups often rely on equity compensation due to limited cash reserves, while later-stage companies may offer cash as a more immediate form of compensation. Advisor Expertise: Advisors with highly specialized skills or extensive industry experience may command higher compensation, as their insights can significantly impact the company’s success. Time Commitment: Advisors taking on more active roles, such as participating in regular meetings or consulting on key projects, will likely receive more compensation for their involvement. Types of Compensation for Advisory Board Members Compensating advisory board members effectively is crucial for attracting and retaining the right talent. Startups typically consider the following compensation structures: Equity Compensation Offering equity aligns advisors' interests with the company's success, as their financial gain is directly tied to its performance. This approach particularly appeals to startups with limited cash flow, allowing them to conserve funds while providing valuable incentives. Equity compensation often includes vesting schedules to ensure advisors remain committed over time. The percentage of equity granted varies based on the advisor's experience, expected contribution, and the company's stage, commonly ranging between 0.1% to 1%. Cash Compensation Some startups opt for cash payments, especially when immediate expertise is needed and the company has sufficient funds. This approach can attract advisors who prefer immediate remuneration over potential future gains. Cash compensation can be structured hourly or fixed for specific deliverables or projects. Hourly rates are negotiated based on the advisor’s expertise and time commitment, while fixed payments are agreed upon for delivering tangible outcomes or milestones. Combination Packages Blending cash and equity provides flexibility, catering to advisors seeking immediate compensation and a stake in the company's future. This approach can particularly attract advisors who value immediate financial rewards and long-term potential. By offering a combination of cash and equity, startups can tailor compensation packages to meet the preferences of individual advisors, thereby enhancing their ability to attract and retain top talent. The Role and Responsibilities of an Advisory Board Beyond compensation, understanding the pivotal roles and responsibilities of advisory boards is crucial. These boards offer invaluable support across various domains, significantly influencing a startup's strategic direction and success. Let's explore the key functions advisory boards fulfill in a startup environment. Strategic Guidance and Vision An advisory board plays a significant role in shaping a startup's long-term vision and strategic direction. Drawing on their expertise and industry knowledge, advisors help founders refine business models, identify growth opportunities, and address potential challenges. Their objective perspective ensures that strategic plans remain aligned with the company’s overarching goals, supporting sustainable development. Ongoing consultations with advisors enable startups to stay responsive to market dynamics, maintaining a clear and focused path toward achieving their objectives. Industry Expertise and Knowledge Sharing The industry insights brought by advisory board members are invaluable for helping startups build competitive advantages and make informed decisions. Their in-depth knowledge of market trends, emerging technologies, and industry best practices allows startups to anticipate changes and adjust strategies effectively. Advisors share their expertise to identify opportunities, mitigate risks, and maintain agility, creating a foundation for smart strategic planning and fostering a culture of continuous learning and innovation. Mentorship and Coaching An advisory board’s guidance goes beyond traditional support by nurturing the growth of startup leadership teams. Advisors offer diverse insights from their own experiences, helping leaders navigate complex challenges and enhance their decision-making abilities. This mentorship fosters both personal and professional development, equipping leaders with essential skills to drive company success. Advisors can also identify skill gaps and recommend development strategies, ensuring the team is well-prepared for the demands of growth. Networking and Connections The networks that advisors bring can be transformative for startups, facilitating introductions to potential partners, clients, investors, and industry experts. These valuable connections open doors to partnerships, collaborations, and business opportunities that might otherwise be challenging to access. Additionally, advisors provide insights into market trends and competitor strategies, keeping startups informed and agile in an evolving market landscape. Assistance with Fundraising Efforts Advisory boards also play a key role in supporting fundraising. Through their networks, advisors introduce founders to potential investors- such as venture capitalists, angel investors, and strategic partners- that align with the company’s vision. Beyond introductions, they offer insights into crafting compelling pitches, building effective fundraising strategies, and negotiating favorable terms. Advisors’ experience with investment landscapes helps startups understand market expectations, positioning them attractively to potential funders while aligning capital raised with strategic goals for growth. Identifying Market Insights and Trends A well-connected advisory board is invaluable in tracking industry trends and emerging market shifts. With their continuous industry engagement, advisors offer foresight into patterns, technological advancements, and competitive movements. By sharing these insights, advisors enable startups to anticipate changes, adapt strategies, and maintain a competitive edge. This proactive approach helps the company remain agile and responsive in a fast-changing environment. How to Structure Advisory Board Compensation Structuring compensation for advisory board members requires a thoughtful approach that aligns the startup's resources with the value advisors bring. Startups often compensate advisors with equity rather than cash, especially in early stages where cash flow is limited. Typically, companies allocate a total of 1% to 5% of equity for all advisors, divided among key members, each receiving anywhere between 0.25% and 1% of shares, based on their expertise and expected contributions. Key Considerations: Advisor's Expertise and Role: The more specialized and critical the advisor's expertise, the higher the equity percentage they may warrant. Time Commitment: Advisors dedicating more time and effort to the startup's success may receive a larger equity share. Company Stage: Early-stage startups might offer higher equity percentages due to higher risk and limited cash, while later-stage companies may offer less equity but potentially include cash compensation. Vesting Schedules: Implementing a vesting schedule is crucial to ensure advisors remain committed over time. A common approach is a one-year cliff, where no equity vests until after one year of service, followed by monthly or quarterly vesting over the subsequent years. Combination Packages: In some cases, startups may offer a blend of cash and equity to attract advisors seeking immediate compensation and a stake in the company's future success. This approach provides flexibility and can be tailored to meet both the startup's financial capabilities and the advisor's expectations. Boost Your Fundraising Efforts with Visible Advisory boards are instrumental in guiding startups through strategic planning, industry insights, mentorship, networking, and fundraising. Compensation for advisors varies, often involving equity, cash, or a combination, tailored to the startup's stage and the advisor's expertise. Structuring these compensation packages thoughtfully ensures alignment with the company's goals and resources. For startups looking to strengthen their investor relationships, Visible lets you track key metrics, send investor updates, and track the status of your next fundraise all in one place. Give it a free try for 14 days here. Related resource: Understanding the 9 Types of Private Equity Funds

In the fast-paced world of startups, guidance from those who’ve been through it all can be a game-changer. Having a mentor who understands the unique challenges of entrepreneurship can bring fresh insights, help avoid common pitfalls, and offer invaluable support. But is a mentor right for your startup? This article explores the key benefits of mentorship, factors to consider when choosing a mentor, and practical steps to create a strong mentoring relationship. Whether you’re seeking a sounding board or strategic advice, discovering how the right mentor can impact your journey is just a few scrolls away. What Is a Startup Mentor? A startup mentor is an experienced professional who guides, advises, and supports founders as they navigate the complexities of building a business. Unlike advisors or investors, who may have a more formal, stake-based relationship, mentors typically offer their insights out of a genuine interest in helping the founder grow and succeed. Their role can encompass everything from strategic advice and problem-solving to emotional support, often acting as a sounding board for new ideas and challenges. There are various types of startup mentors, each bringing unique strengths to the relationship. Industry-specific mentors offer deep knowledge about the market and competitive landscape, helping founders anticipate trends and avoid pitfalls. Functional mentors specialize in key areas like marketing, finance, or operations, guiding founders through tactical challenges. These are just a few examples of the types of startup mentors, each bringing different strengths and focus areas: Industry Mentors- Experts with deep knowledge in a specific industry or sector, guiding startups on industry trends, market demands, and unique challenges. Technical Mentors- Often with a background in product development, engineering, or technology, they help founders tackle technical challenges, improve product offerings, and navigate tech-related decisions. Business Strategy Mentors- These mentors focus on strategic areas like business model development, scaling, and revenue growth, helping founders shape a sustainable business. Leadership and Personal Development Mentors- Aimed at helping founders grow as leaders, these mentors emphasize personal development, team management, and effective communication. Should Your Startup Have Mentors? Every startup faces a unique set of challenges, and having a mentor can provide the outside perspective and expertise needed to navigate these obstacles effectively. Mentors bring a level of experience that founders may lack, especially in the early stages, helping avoid common mistakes and encouraging strategic thinking. A mentor’s guidance can be especially valuable during critical moments, such as securing initial funding, building a product, or entering new markets. Mentors often also act as sounding boards for ideas, helping founders refine their vision and validate assumptions. This external insight is vital for startups looking to grow thoughtfully and sustainably. While building a business can feel isolating, having a mentor ensures founders don’t have to face challenges alone, making mentorship an invaluable resource for any startup aiming for long-term success. Related resource: Startup Leaders Should Have Mentors. Here’s How to Find One. Benefits of Having a Mentor for Your Startup Mentorship can be a transformative asset for startup founders, offering insights and support beyond day-to-day operations. While building a business requires resilience and resourcefulness, the right mentor can help founders unlock new opportunities, avoid common pitfalls, and achieve their goals faster. Related resource: Startup Mentoring: The Benefits of a Mentor and How to Find One Below, we’ll explore how mentorship can provide unique advantages: Access to Knowledge and Experience One of the most significant benefits a mentor offers is access to a wealth of knowledge and experience that can help founders make informed decisions and avoid costly mistakes. Mentors have typically faced similar career challenges, allowing them to provide insights that can guide founders through complex or unfamiliar situations. Whether navigating the intricacies of scaling a team, developing a product strategy, or understanding market dynamics, mentors offer firsthand knowledge that books or courses can’t always provide. By sharing their past successes and failures, mentors empower founders to see beyond immediate obstacles and think strategically about long-term goals. This transfer of experience can save startups time and resources, allowing founders to focus their energy on high-impact decisions and proactive problem-solving. With a mentor’s guidance, founders are better equipped to tackle challenges with confidence and insight. Expanding Network and Connections A mentor’s network can be one of the most valuable resources a founder gains access to. Many mentors have built strong connections throughout their careers, spanning various industries, fields, and expertise. By introducing founders to relevant contacts, mentors can open doors to partnerships, investors, and potential clients that might otherwise be out of reach. This expanded network can accelerate a startup’s growth by connecting founders with key players who can help them achieve their goals. These introductions often carry a level of trust that wouldn’t exist with cold outreach. A mentor’s endorsement can provide credibility, especially for early-stage startups seeking funding or high-profile partnerships. Through these connections, founders gain business opportunities and access to new perspectives and ideas that enrich their approach to growth and innovation. Accountability and Objective Feedback A mentor's most impactful role is that of a trusted advisor who provides accountability and objective feedback. Unlike friends or family, who may hesitate to offer critical insights, a mentor’s goal is to push founders toward growth- even if it means delivering tough feedback. This objectivity helps founders stay grounded, focused, and aligned with their goals, especially when it’s easy to get distracted by day-to-day tasks or minor setbacks. Mentors help keep founders accountable by encouraging them to set measurable goals and track their progress. This accountability can motivate founders to stay on course, push past challenges, and continuously improve. With honest, unbiased feedback from someone with a vested interest in their success, founders can make more balanced decisions, identify areas for improvement, and sharpen their strategies, ultimately driving their startup closer to success. Increased Confidence and Personal Growth Mentors play a critical role in boosting founders’ confidence and supporting their journey of personal growth. For many founders, the entrepreneurial path can be filled with self-doubt and uncertainty, particularly when facing major challenges or making high-stakes decisions. Mentors help build confidence by offering encouragement, reinforcing a founder’s strengths, and providing reassurance from a place of experience. Knowing that someone who has been through similar challenges believes in their abilities can be incredibly empowering. Beyond boosting confidence, mentors foster personal growth, helping founders become more effective leaders. They can provide insights into communication, decision-making, and team management, equipping founders with skills essential for leading a startup. Through this guidance, founders often gain a deeper understanding of themselves and their leadership style, allowing them to lead their teams with greater empathy, resilience, and strategic vision. Key Considerations When Choosing a Mentor While having a mentor can be incredibly beneficial, not every mentor fits every founder. Choosing the right mentor requires careful consideration, as the relationship can profoundly impact both the founder’s personal development and the startup’s success. From aligning values to understanding a mentor’s availability and potential conflicts of interest, there are several factors to weigh when selecting someone to guide your journey. By evaluating these considerations, founders can find a mentor who truly complements their vision and offers the support they need to thrive. Alignment of Values and Vision Choosing a mentor whose values and vision align with the founder’s goals is crucial for creating a productive and harmonious mentoring relationship. A mentor with similar beliefs and long-term aspirations will more likely provide advice that resonates with the founder’s approach to building their startup. This alignment promotes a shared understanding of success and ensures that the mentor's guidance will support, rather than conflict with, the founder’s goals. When values and vision are aligned, founders and mentors can work toward growth with a unified approach, avoiding misunderstandings and conflicting advice. For instance, if a founder prioritizes sustainable growth while the mentor advocates for rapid scaling, the misalignment may create tension or lead to misguided decisions. By selecting a mentor who shares their outlook, founders can foster a supportive relationship where advice feels relevant, actionable, and in tune with their vision. Level of Involvement Assessing a mentor’s level of involvement is essential to ensure they can provide the time and support needed to make a meaningful impact. Every mentor has varying commitments and may be able to offer different levels of engagement, from occasional check-ins to more hands-on guidance. Founders should clarify upfront how frequently the mentor is available for meetings, whether they can provide regular feedback, and how involved they are willing to be in day-to-day challenges or major decisions. A mentor’s involvement should align with the startup’s needs and growth stage. Early-stage startups may benefit from frequent, in-depth mentoring to tackle foundational issues, while more established businesses may only require periodic guidance. Understanding these expectations early on helps founders build a realistic and sustainable mentoring relationship where both parties are committed to a level of engagement that drives real progress. Potential Conflicts of Interest When selecting a mentor, it’s essential to consider potential conflicts of interest that could impact the mentor’s objectivity or commitment to the startup. A conflict of interest may arise if the mentor has ties to competitors, is an advisor to other startups in the same space, or has financial interests that could influence their advice. Such conflicts can hinder a mentor’s ability to provide impartial guidance, potentially leading to biased or compromised decisions. To ensure the relationship remains transparent and mutually beneficial, founders should discuss potential conflicts openly before beginning the mentorship. Addressing these concerns upfront helps establish trust and allows both parties to assess whether the mentorship can be productive and objective. With a clear understanding of each other’s commitments, founders can feel confident that the mentor’s advice is in the best interest of their startup. Time and Financial Commitments Discussing time and financial commitments upfront is crucial for setting clear expectations in a mentor-mentee relationship. Mentorship often requires significant time, from regular meetings to hands-on support during critical phases of the startup’s growth. Founders should work with their mentor to define how much time both parties are willing and able to commit, ensuring that the mentor’s involvement aligns with the startup’s needs. In some cases, financial commitments may also come into play, especially if the mentor is expected to provide more intensive support or if there are costs associated with travel or resources. Establishing these expectations early on helps avoid misunderstandings and ensures that both parties are on the same page regarding any financial contributions or compensation. By proactively addressing time and financial commitments, founders can foster a strong, transparent relationship that supports both the mentor’s and the startup’s goals. How to Build a Successful Mentoring Relationship Establishing a successful mentoring relationship goes beyond simply finding the right mentor- it requires effort, structure, and clear communication from both sides. Once a mentor has been chosen, laying a solid foundation for the relationship is essential to ensure it remains productive and mutually beneficial. By setting clear goals, maintaining regular communication, and creating a feedback loop, founders can make the most of their mentor’s guidance and build a partnership that supports their growth and success. Below are some key steps to help founders cultivate a lasting, impactful mentorship. 1. Set Clear Goals Defining clear objectives for the mentorship relationship is essential for making the partnership effective and focused. When founders set specific goals, they and their mentor have a roadmap to follow, ensuring their efforts are aligned and measurable. These objectives might include achieving a certain business milestone, gaining specific skills, or navigating particular challenges within the startup’s growth journey. Having well-defined goals helps to keep each mentorship session productive, as both parties know what they’re working toward. It also allows the mentor to tailor their advice and resources to meet these goals, making their guidance more relevant and impactful. Setting goals at the start of the mentorship and periodically reviewing progress ensures that both the founder and mentor remain engaged and can celebrate achievements along the way. 2. Establish Regular Communication Regular communication is the backbone of a successful mentoring relationship. By setting a consistent schedule for check-ins and updates, founders ensure that the mentorship remains active and focused on their evolving needs. These scheduled meetings provide dedicated time to discuss challenges, review progress, and adjust goals, helping both mentor and mentee stay aligned and engaged. Establishing a communication rhythm- whether it’s weekly, bi-weekly, or monthly- also fosters accountability, as both parties commit to preparing for and participating in each session. This structured approach prevents the relationship from becoming sporadic or one-sided and ensures that the mentor can provide timely, relevant advice. Clear communication routines help make the most of the mentor’s support, creating a steady flow of insights that keep the founder moving forward. 3. Feedback Mechanism Creating channels for constructive feedback is essential for a mentorship to thrive. A strong feedback mechanism allows both mentor and mentee to share their perspectives openly, ensuring that the relationship remains productive and mutually beneficial. By establishing a process for feedback, founders can receive actionable insights on their progress, while mentors can offer honest advice on areas for improvement. Encouraging two-way feedback also helps mentors adjust their guidance to better meet the founder’s needs. For instance, if a particular approach isn’t resonating, the founder can communicate this, allowing the mentor to adapt their style or focus. Regular, constructive feedback builds trust and respect, fostering a safe space for growth where both parties feel comfortable addressing successes, challenges, and new ideas openly. Strengthen Your Investor Relationships with Visible Mentorship can be a powerful asset for startup founders, offering guidance, expanding networks, and fostering personal growth. Founders can build a mentoring relationship that truly supports their journey by choosing the right mentor, setting clear goals, and maintaining open communication. However, mentorship is only one part of a founder’s success toolkit. For startups looking to strengthen their investor relationships, Visible lets you track key metrics, send investor updates, and track the status of your next fundraise all in one place. Give it a free try for 14 days here. Related resource: A Founder’s Guide to Accelerators Funding Startups in 2024

Why the Chief of Staff is Important for a Startup Startup founders and practitioners are often debating the best actions to take and decisions to make in their early-stage companies. Determining the right hires has been a major part of this conversation. The hot topic on the table lately has been around hiring the role of Chief of Staff. There is a growing conversation about whether startup leaders and founders should hire a Chief of Staff (COS), and here at Visible, we believe it is one of the most important hires you can make. A Chief of Staff is essential for your startup because their role is designed to be an extension of the c-suite’s leadership and strategy. Their role allows companies to scale faster and more strategically. Between the Board of Directors, Executive Board, stakeholders, and employees, startups have a lot of moving parts, and a Chief of Staff can be the cog in the machine that makes all those pieces work smoothly together. A Chief of Staff is the right-hand person to an executive team member, typically the CEO or COO. The COS is tasked with managing the executive’s goals, priorities, internal and external operational tasks, and special strategic projects as needed. The typical responsibilities included in a Chief of Staff role may include: Managing Executive Goals and Priorities A Chief of Staff helps determine what optimized time really looks like. For CEOs and COOs, there is plenty of work that could easily fill the day. But what work is most important for business development and moving the business forward? A Chief of Staff helps direct the decision-making and serves as a sounding board for the CEO, owning the task of keeping the executive aligned to the goals he or she set forth to push the business forward. A COS considers these executive goals and even formalizes them in a framework such as the OKR (Objective Key Results) framework. With these executive OKRs formalized, a COS helps guide the CEO/COO’s priorities day over day. Related resource: Should I Consider a Part-time Executive for My Startup? Operational Tasks With specific areas of work, including board meetings and other critical decision-making sessions or meetings on the agenda, the Chief of Staff helps manage these priorities by handling operations tasks like agenda setting and distribution, communications with teams across the startup to gather insight and updates on various company-wide priorities and progression. Not only will a Chief of Staff work on internal operational tasks like meeting prep, gathering updates, and tracking company progress towards goals, but they also tend to handle external operational tasks as well. These external operational tasks might include sending investor updates to stakeholders, serving as the point of contact to the Board of Directors representing the CEO’s office, or even working on communications and PR. Special Strategic Projects Startups move fast, and different priorities and special obligations come up for leadership out of the blue. Additionally, as your startup goes through strategic growth periods like fundraising or even acquiring smaller startups down the line, the priorities of a CEO’s time will greatly change. These strategic times are the perfect way to utilize a COS. If fundraising is going to take up a significant chunk of a CEO’s time, a Chief of Staff can step in and manage aspects of that strategic task such as deck assembly, overview materials for the potential investors, and communication with parts of the business that need to deliver information for said fundraising presentation. Chief of Staffs are typically very versatile in their skill set, with communication, strategic thinking, and analytical skill sets. This background makes them the perfect person to take on roles that require strategic thought and concise summaries but are potentially too time-constraining for a CEO to dedicate all of their energy to. With their unique mix of hard and soft skills, executive insight, and strategic position in the company, a COS is a major value-add to any startup. Our team at Visible has identified seven primary ways that a Chief of Staff can strengthen your startup. When is it Time to Hire a Chief of Staff? Determining the right moment to bring a COS into your startup is crucial for maximizing their impact. By recognizing the following indicators and acting promptly, startups can leverage the unique skills and perspectives that a Chief of Staff brings to the table, ensuring sustained growth and success. Related resource: How to Hire Your First 10 Startup Employees Here are some key indicators that it might be the right time to hire a COS: Leadership Bandwidth is Strained As your startup grows, the demands on the leadership team increase exponentially. This strain manifests as longer work hours, difficulty in prioritizing tasks, and a constant feeling of being overwhelmed. Executives may find themselves bogged down with operational details rather than focusing on strategic initiatives. A Chief of Staff can help alleviate this burden by managing critical tasks, streamlining decision-making processes, and allowing leaders to focus on high-level strategic goals. They act as a force multiplier, extending the reach and effectiveness of the leadership team. A Need for Cross-Departmental Collaboration Effective cross-departmental collaboration is essential for startups to innovate and scale. However, as the organization grows, silos can form, and communication breakdowns can occur. This can lead to inefficiencies, duplicated efforts, and missed opportunities. A Chief of Staff ensures seamless collaboration by facilitating communication between departments, aligning goals, and overseeing cross-functional projects. They help to break down silos and ensure that all parts of the organization are working towards the same objectives. Related resource: How to Build Organizational Alignment Easily Mergers, Acquisitions, or Product Launches Significant events like mergers, acquisitions, or major product launches require focused attention and meticulous coordination. These initiatives bring unique challenges such as integrating new teams, managing extensive paperwork, and aligning strategies. A Chief of Staff can manage these complex processes, ensuring that all aspects are covered and that the executive team can concentrate on high-level strategic decisions. They provide the necessary oversight and coordination to make these critical events successful. Leadership Succession Planning Succession planning is vital for maintaining continuity and stability within the leadership team. It involves identifying and developing future leaders within the organization. However, amidst the daily hustle of running a startup, this can often be neglected. A Chief of Staff plays a crucial role in leadership succession planning by mentoring potential leaders, overseeing development programs, and ensuring there is a clear plan for leadership transitions. This not only secures the future of the company but also helps in retaining top talent by providing clear career progression paths. Typical Responsibilities for a Chief of Staff A Chief of Staff in a startup wears many hats, acting as a strategic partner to the CEO or COO. Their role involves a wide range of responsibilities that help streamline operations, drive strategic initiatives, and ensure that the leadership team can focus on high-priority tasks. Below are some of the key responsibilities that a Chief of Staff typically handles, each of which will be covered in more detail in their respective sections. Managing Executive Goals and Priorities A Chief of Staff helps determine what optimized time looks like for the executive team. For CEOs and COOs, there is plenty of work that could easily fill the day. But what work is most important for business development and moving the business forward? A Chief of Staff directs the decision-making process, ensuring that the executive's time is spent on tasks that are crucial for growth. They serve as a sounding board for the CEO, aligning the executive with the company’s strategic goals and formalizing them using frameworks such as OKRs (Objectives and Key Results). This helps guide the CEO/COO’s priorities day by day. Operational Leadership The Chief of Staff manages both internal and external operational tasks, ensuring smooth day-to-day operations. This includes setting agendas for board meetings, gathering updates from various teams, and tracking progress towards company goals. They handle communications across the startup to ensure everyone is aligned with the company’s priorities. Externally, they might send investor updates, serve as a point of contact for the Board of Directors, and manage public relations tasks. By overseeing these operational details, the Chief of Staff allows the executive team to focus on more strategic issues. Strategic Projects Startups often encounter special strategic projects that require focused attention. Whether it’s fundraising, a product launch, or an acquisition, a Chief of Staff manages these projects, ensuring they align with the company’s strategic goals. They take on roles that require strategic thinking and concise summaries, handling aspects such as preparing decks for investors, assembling materials for presentations, and coordinating communication across the company. This enables the CEO to concentrate on core business functions without getting bogged down by the intricacies of these special projects. Important Skills for a Chief of Staff to Have When making the strategic hire of a Chief of Staff, startup founders need to look for specific skills that will ensure the candidate can effectively support the leadership team and drive the company forward. These skills serve as crucial filters and green flags in the interview process, guiding founders on how to frame their questions and identify the best candidate for their organization. Strategic Thinking Strategic thinking is vital for navigating the complexities of a growing startup. A Chief of Staff must be able to anticipate future challenges, identify opportunities, and develop long-term plans that align with the company's vision. By outsourcing strategic thinking to a Chief of Staff, the executive team can ensure that someone is always focused on the bigger picture, allowing them to concentrate on immediate operational needs. This skill is essential for maintaining a clear direction and ensuring the startup's long-term success. Project Management Effective project management is crucial for keeping various initiatives on track and within budget. A Chief of Staff must be adept at coordinating multiple projects, setting deadlines, and ensuring that resources are allocated efficiently. In a growing startup, where rapid execution is key, outsourcing project management to a Chief of Staff ensures that projects are completed on time and meet the company's strategic objectives. This allows the executive team to focus on higher-level strategic decisions without getting bogged down in the details of project execution. Analytical Skills Analytical skills enable a Chief of Staff to interpret data, identify trends, and make informed decisions. In a data-driven startup environment, these skills are critical for providing valuable insights that inform strategic direction and operational improvements. By outsourcing analytical tasks to a Chief of Staff, the executive team can ensure that decisions are based on solid data and analysis, reducing the risk of errors and improving overall efficiency. Communication Skills Strong communication skills are necessary for a Chief of Staff to act as a liaison between the executive team and other departments. They must be able to convey complex ideas clearly, facilitate effective meetings, and ensure that all stakeholders are on the same page. Good communication helps maintain transparency, fosters a collaborative work environment, and ensures that everyone in the organization is aligned with the company's goals. By outsourcing communication management to a Chief of Staff, the executive team can ensure that information flows smoothly and efficiently throughout the organization. Ways a Chief of Staff Can Strengthen Your Startup A Chief of Staff can significantly enhance the effectiveness and efficiency of a startup. By taking on critical tasks and responsibilities, they enable the executive team to focus on strategic goals and high-priority items. Here are some of the ways a Chief of Staff can strengthen your startup: Focus on Priority Items The day-to-day life of a CEO or COO can be extremely hectic, with numerous decisions and tasks competing for their attention. A Chief of Staff helps manage these priorities by filtering out less critical tasks and directing the executive’s time towards the most strategic decisions that align with the company's OKRs (Objectives and Key Results). This ensures that the leadership focuses on what truly drives the business forward while the Chief of Staff handles smaller issues and routine decision-making. Facilitate Smooth Information Sharing Effective communication is crucial for the smooth operation of a startup. A Chief of Staff acts as a central point for gathering and disseminating information across the organization. They collect updates from various departments, distill the most important points, and present a contextualized executive summary to the CEO. This process ensures that the CEO receives all the necessary information without being overwhelmed by details, and that communication flows smoothly from the CEO to the rest of the company. Inform Strategy and Decision-Making A Chief of Staff serves as a valuable resource for keeping the executive team connected to the various happenings across departments. By providing an executive summary of company-wide updates, a Chief of Staff helps the leadership team make informed strategic decisions more quickly. They ensure that all relevant information is considered, facilitating better and faster decision-making processes. Maximize Time While You Scale As a startup scales, the demands on the executive team’s time increase. A Chief of Staff helps maximize this time by prioritizing tasks and focusing on critical projects. They handle routine and operational tasks, allowing the CEO to dedicate more time to deep-think projects and strategic initiatives. This ensures that the leadership’s time is used efficiently, even as the company grows and evolves. Tackle Special Projects Special projects, such as fundraising rounds, product launches, or industry presentations, require focused attention and dedicated resources. A Chief of Staff is perfectly positioned to spearhead these projects, managing aspects such as preparing investor decks, assembling materials for presentations, and coordinating communication across the company. This allows the CEO to stay focused on daily priorities while still ensuring that special projects are executed effectively. Provide Oversight and Perspective Startups can often become echo chambers where new perspectives are hard to come by. A Chief of Staff, especially one with experience from other startups, brings a fresh viewpoint to the c-suite. They provide oversight and serve as a sounding board for new ideas and strategies, helping to ensure that the company stays innovative and adaptable. Push the Business Forward Ultimately, a Chief of Staff is a strategic player in moving the business forward. They streamline operations, manage strategic projects, and ensure effective communication, all of which contribute to the company’s growth. By freeing up the executive team to focus on high-level strategic goals, a Chief of Staff helps take a startup from good to great and potentially to unicorn status. Chief of Staff vs Executive Assistant Understanding the difference between a COS and an Executive Assistant (EA) is crucial for startup founders to ensure they make the right hire at the right time. While both roles support the executive team, they do so in different ways and with distinct focuses. Chief of Staff A Chief of Staff is a strategic partner to the executive team, particularly the CEO or COO. Their responsibilities are broad and focus on aligning the company’s strategic goals with daily operations. Here are some key aspects of the COS role: Strategic Focus: The COS works on high-level strategic initiatives, ensuring that the executive team’s vision and goals are implemented across the organization. Project Management: They handle complex projects that span multiple departments, such as mergers, acquisitions, product launches, and fundraising efforts. Decision-Making Support: The COS provides critical insights and data analysis to support executive decision-making, helping to inform strategy and operational improvements. Cross-Departmental Collaboration: They facilitate communication and collaboration between different departments to ensure everyone is aligned and working towards common goals. Leadership Development: The COS often plays a role in leadership succession planning and mentoring potential future leaders within the organization. Executive Assistant An Executive Assistant, on the other hand, focuses on optimizing the executive’s daily schedule and administrative tasks. Here are some key aspects of the EA role: Administrative Focus: The EA manages the executive’s calendar, schedules meetings, handles correspondence, and organizes travel arrangements. Time Management: They ensure that the executive’s time is used efficiently by prioritizing meetings and tasks, allowing the executive to focus on their most important responsibilities. Task Coordination: The EA handles a variety of administrative tasks that help keep the executive’s day running smoothly, from booking appointments to preparing documents. Support Role: They provide general support to the executive, ensuring that they have everything they need to perform their duties effectively. Routine Operations: The EA is instrumental in managing routine operational tasks, allowing the executive to concentrate on more strategic issues. Key Differences Scope of Responsibilities: The COS has a broader, more strategic scope, focusing on aligning and implementing the company’s long-term goals. The EA’s scope is narrower, concentrating on the day-to-day administrative support of the executive. Strategic vs. Administrative: The COS is involved in strategic decision-making and high-level project management, while the EA handles administrative and logistical tasks. Cross-Departmental Impact: The COS often works across departments to facilitate collaboration and ensure alignment with company goals. The EA typically works closely with the executive and less so with other departments. Long-Term vs. Short-Term Focus: The COS is focused on long-term strategic initiatives and projects that drive the company forward. The EA is focused on the immediate, short-term needs of the executive. Making the Right Choice For startup founders, deciding between hiring a Chief of Staff and an Executive Assistant depends on the company’s current needs and stage of growth: If the company needs high-level strategic support, project management for complex initiatives, and cross-departmental coordination, hiring a Chief of Staff is the right choice. If the primary need is managing the executive’s schedule, handling administrative tasks, and ensuring day-to-day operations run smoothly, then an Executive Assistant is the appropriate hire. Equipping a Chief of Staff for Success at a Startup To ensure a COS is successful at your startup, it's crucial to clearly define their role and responsibilities from the outset. This includes creating a detailed job description that outlines specific tasks and expectations. Additionally, providing a comprehensive onboarding process with clear goals and KPIs will help the COS integrate smoothly and start contributing effectively. Regular check-ins and feedback sessions will also ensure they are aligned with the company’s strategic goals and can adjust to any evolving needs. Equipping your COS with the right tools and resources, fostering open communication, and maintaining a supportive environment will enable them to execute their duties effectively. This preparation ensures that the COS can focus on driving strategic initiatives and managing critical projects, ultimately contributing to the startup’s growth and success. How Visible Can Help Visible offers a range of tools and resources designed to support Chief of Staffs in their roles, making it easier to streamline executive and investor communications. With features that facilitate data tracking, reporting, and stakeholder updates, Visible ensures that your Chief of Staff can efficiently manage information flow and keep everyone aligned with the company’s strategic objectives. By leveraging Visible's platform, startups can enhance their operational efficiency, improve decision-making processes, and ultimately drive growth. For more information about how Visible helps Chiefs of Staff streamline their executive and investor communications, learn more here.

Managing company equity is a crucial part of a founder’s job duty. In the early days of building a business, chances are there will be countless advisors, investors, peers, etc. that help a business. However, most early stage businesses do not have the cashflow to compensate every advisor along the way. Founders need to get crafty with how they compensate their earliest advisors and experts — enter: advisory shares. We always recommend consulting a lawyer before taking further action on advisory shares. Learn more about advisory shares and how you can leverage them for your business below: What Are Advisory Shares? As put by the team at Investopedia, “One common class of stock is advisory shares. Also known as advisor shares, this type of stock is given to business advisors in exchange for their insight and expertise. Often, the advisors who receive this type of stock options reward are company founders or high-level executives. Advisor shares typically vest monthly over a 1-2 year period on a schedule with no cliff and 100% single-trigger acceleration.” Advisor Shares vs. Regular Shares (or Equity) Advisor shares come in different shapes and sizes. There is not a technical definition of advisor shares but is rather any form of equity in a business. Learn more about the characteristics of advisory shares below: Characteristics of Advisory Shares As mentioned above, advisor shares typically vest monthly over a 1-2 year period with no cliff. Advisory shares are typically granted as stock options but not every company grants their shares in the same way. This generally comes in the form of Non-Qualified Stock Options (NSOs). Related Read: The Main Difference Between ISOs and NSOs How Do Advisory Shares Work? While advisory shares can take on different forms, they typically can be boiled down to a few similarities. Of course, these can change depending on your business. Exchanged for advice or expertise Typically offered as NSO stock options Follow a shorter vesting schedule Learn more about how advisory shares typically work below: Implement a Startup Advisor Agreement As put by the team at HubSpot, “A startup advisor agreement is a contract between a startup and its advisor. This agreement outlines the terms of the relationship, including the responsibilities of each party and the compensation the advisor will receive.” There are countless advisor agreement templates online to get you started. The Founder Institute offers a free template called the FAST Agreement. Determine the Vesting Schedule As advisor shares are for advisors that offered their expertise, they are typically granted on a shorter vesting schedule because their value is given over a shorter amount of time. This is typically a 1 or 2 year vesting schedule (as opposed to the 4 year vesting schedule traditionally used for startup employees). Benefits of Advisory Shares Advisory shares come with their own set of pros and cons. Properly maintaining and distributing equity is a critical role of a startup founder so understand the benefits, and drawbacks, of offering advisory shares is a must. Related Resource: 7 Essential Business Startup Resources Learn more about the benefits of offering startup advisory shares below: Access to Real Experts When setting out to build a business, chances are most founders lack expertise in certain areas when it comes to building a business or in their market. However, most early-stage companies are typically strapped for cash and are unable to afford the defacto experts in the space. With advisor shares, startup founders can attract real experts to get guidance and strategic support in the early days in return for shares in the business. Related Resource: Seed Funding for Startups 101: A Complete Guide Better Network Credibility If hiring the right advisor, chances are they will be able to help beyond strategic advice or their expertise. They will be able to expose your business to their network and will be able to make introductions to new business opportunities, partnerships, investors, and potential hires. Cost-Effective Compensation As we previously mentioned, most businesses that benefit most from advisors are unable to offer them a salary or cash compensation. With advisor shares, startup founders are able to offer shares as compensation and conserve thei cash to help with scaling their business and headcount. Drawbacks of Advisory Shares Of course, offering advisor shares is not for everyone. While there are benefits to offering advisor shares, there are certainly drawbacks as well. Weighing the pros and cons and determining what is right for your business is ultimately up to you. We always recommend consulting with a lawyer or counsel when determining how to compensate advisors. Diluted Ownership The biggest drawback for most founders will be the diluted ownership. By offering shares to advisors, you will be diluting the ownership of yourself and existing shareholders. As advisors are fully vested in 1-2 years, they will potentially not be invested in future success as other stakeholders and could be costly when taking into account the diluted ownership. Potential Conflicts of Interest Advisors might not have the same motivators and incentives as your employees and other shareholders. As their ownership is generally a smaller % and their shares vest early, they are potentially not as incentivized for the growth of your company as employees and larger % owners will be. Getting in front of these conversations and making sure you have a good read on any potential advisors before bringing them onboard is a good first step to mitigate potential conflicts. Extra Stakeholder to Manage Chances are most advisors are helping other companies as well. This means that their attention is divided and you will need to ensure you are getting enough value to warrant dilution. This also means that you are responsible for managing a relationship and communication with another stakeholder in your business — what can be burdensome on some founders. The 2 Variations of Advisory Shares Advisory shares are generally offered in 2 variations — restricted stock awards and stock options. Learn more about each option and what they mean below: Restricted Stock Awards As put by the team at Investopedia, “A restricted stock award is similar to an RSU in a number of ways, except for the fact that the award also comes with voting rights. This is because the employee owns the stock immediately once it is awarded. Generally, an RSU represents stock, but in some cases, an employee can elect to receive the cash value of the RSU in lieu of a stock award. This is not the case for restricted stock awards, which cannot be redeemed for cash.” Stock Options As we mentioned, NSOs (Non-Qualified Stock Options) are commonly used for advisor shares. As put by the team at Investopedia, “A non-qualified stock option (NSO) is a type of employee stock option wherein you pay ordinary income tax on the difference between the grant price and the price at which you exercise the option… Non-qualified stock options require payment of income tax of the grant price minus the price of the exercised option.” Who Gets to Issue Advisory Shares? Issuing advisory shares is typically reserved for the founder or CEO of a company. Having a decision-making process and gameplan when issuing advisory shares is important. This might mean offering no shares at all, having an allocated amount of advisor shares from the get go, or something inbetween. Making sure your board of directors and other key stakeholders are on board is crucial to make sure that interest and strategy stays aligned for all stakeholders. How Many Shares Should You Give a Startup Advisor? Managing the balance between sufficient incentives and managing equity dilution is crucial for any business. Determining the number of shares to offer an advisor is subjective to the founder and advisor. When determining the number, a couple of things to keep in mind include: Advisor’s experience Time commitment Expected contribution As put by the team at Silicon Valley Bank, “An advisor may receive between 0.25% and 1% of shares, depending on the stage of the startup and the nature of the advice provided. There are ways to structure such compensation that ensures founders get value for those shares and still retain the flexibility to replace advisors, all without losing equity.” Let Visible Help You Streamline the Investment Management Process Use Visible to manage every part of your fundraising funnel with investor updates, fundraising pipelines, pitch deck sharing, and data rooms. Raise capital, update investors, and engage your team from a single platform. Try Visible free for 14 days. Related resource: Navigating the World of QSBS: Tax Benefits and Eligibility Criteria Explained

Founders are tasked with hundreds of responsibilities when starting a business. On top of hiring, financing, and building their product, early-stage founders are generally responsible for developing initial strategies — this includes the earliest sales and market strategies. In this article, we will look to help you craft a successful SaaS sales strategy. We’ll highlight the elements you will want to think of when you start to build your sales motion. This will help your team to understand how to measure the number of potential customers in your pipeline and the growth potential you might see in your revenue numbers. How are SaaS sales different from other types of sales? Like any sales strategy, it is important to start with the basics when looking at a SaaS sales strategy. At the top of your funnel, you have marketing leads that likely find your brand via content, word of mouth, paid ads, your own product, etc. From here, leads are moved through the funnel. In the middle, SaaS companies can leverage email campaigns, events, product demos, etc. to move leads to the bottom of their funnel. However, as the SaaS buying experience takes place fully online — sales and marketing organizations can be creative with their approach. The online experience allows companies to track more robust data than ever before. Additionally, SaaS products have turned into their own growth levers as well — the ability to manipulate pricing and plans has led to the ability for companies to leverage their own product for growth. Related Resource: How SaaS Companies Can Best Leverage a Product-led Growth Strategy The online presence and emergence of product-led growth have led to new sales strategies unique to SaaS companies. Learn more below: 3 Popular SaaS sales models There are countless ways to structure your Saas sales strategy. For the sake of this post, we’ll focus on 3 of the most popular strategies. Learn more about the self-service model, transactional model, and enterprise sales model below: Related Resource: The SaaS Business Model: How and Why it Works Self-service model The self-service model allows prospects to become customers without communicating with your team. As put by the team at ProductLed, “A SaaS self-serve model is exactly what it sounds like. Rather than rely on a dedicated Sales team to prospect, educate, and close sales, you design a system that allows customers to serve themselves. The quality of the product itself does all the selling.” This strategy is typically best for a strong and simple product that typically has a lower contract size. Transactional sales model The transactional model allows you to create income-generating actions where prospects have to become a customer at that point in time. This requires transactional sales models to have high-volume sales that can be supported by a strong sales and customer support team. Enterprise sales model The enterprise model is a strategy to sell more robust software packages to corporations – you will need baked-in features in a prepackaged manner to sell to a fellow business. Enterprise sales is the model that shares the most similarities with a traditional B2B sales funnel. Inbound vs outbound sales In a Saas sales funnel, you are constantly looking to consistently fill your sales funnel with fresh prospects. Once you have prospects you will look to find which prospects are worthy of being qualified and have a high likelihood of converting so you can spend your time communicating with those high-quality prospects. There are two popular strategies for creating fresh prospects that would be defined as inbound and outbound sales strategies. Inbound sales is when you invest in marketing to create prospects reaching out to you – fresh prospects reaching out to your business to ask about your software product. As put by the team at HubSpot: “Inbound sales organizations use a sales process that is personalized, helpful, and directly focused on prospects’ pain points throughout their buyer’s journey. During inbound sales, buyers move through three key phases: awareness, consideration, and decision (which we’ll discuss further below). While buyers go through these three phases, sales teams go through four different actions that will help them support qualified leads into becoming opportunities and eventually customers: identify, connect, explore, and advise.” An inbound strategy typically works best for SaaS companies that need a greater volume of customers and can nurture them and move them through their funnel at scale (e.g. self-service model) Outbound sales on the other hand are having members of your organization reach out to potential prospects to see if they would be interested in using your service. Outbound sales require highly targeted and proactive pushing of your messaging to customers. Generally, outbound sales require dedicated team members to manually prospect and reach out to potential customers. This means that outbound sales organizations do not naturally scale as well as an inbound sales organizations and will likely require a higher contract value. An enterprise model would rely heavily on Outbound sales, while a self-service business model will rely heavily on Inbound sales. The SaaS Sales Process The best Saas sales strategy will be a hybrid of inbound and outbound sales, but all of them should include a sales funnel. This funnel should have stages that help to qualify your prospects. These stages should be: Step 1: Lead generation This activity is often times a marketing activity that gives you contact or business information to explore the fit further Step 2: Prospecting This is where you develop the bio of who is the contact you are reaching out to within the organization. It is always helpful to prospect for someone who can make a buying decision Step 3: Qualifying In this step, you need to understand whether the prospect has the resources to pay for your product and the problem that your product can solve. This step is often the time for you to ask questions of your prospects Step 4: Demos and presenting This is when you will share the features and capabilities of your product with the qualified prospect. You want to show them the different features and where they can get the most value. Step 5: Closing the deal After your demo or a presenting call, the prospect should be pushed to a point where they need to make a decision on whether to buy your product. Step 6: Nurturing Once someone becomes a customer, you need to make sure to nurture them and grow your product offering with their business. This is the most difficult stage. Make sure to share your new product releases, stay in tune with how they are using your product, and build relationships with your customers. Cultivating a robust sales team To create a sustaining sales team, it is important to hire talented and tenacious people to own your sales funnel. They will need to track conversion numbers, stay organized with their outreach to prospects, and grow your funnel over time. There are three key roles within a Saas sales funnel. Those positions within your organization are: Sales development representatives (also known as business development representatives) These members of your team own lead generation, prospecting, and qualifying potential customers on your sales team. They get paid 40-60k/year depending on geographical location and experience. They should be tasked with outreach and drumming up new business. Account executives Account executives should focus on giving product demos, closing deals, and nurturing existing customers. They should be a bit more buttoned up in their approach and have a commission incentive associated with the # of accounts they manage. Sales managers/VPs Sales managers and Vice presidents of sales should take ownership of the data within your sales pipelines. Numbers like # of new leads, # of new qualified leads, # of new customers, # of churned customers, amount of new revenue, and lead to customer conversion %. Growing these sales numbers each quarter. Measuring these numbers weekly, monthly, and quarterly. Making them visible to the rest of the company regularly. 8 Key Elements of a successful SaaS sales strategy One of the most important elements of building a successful business is having a like-minded team around you to support and work with you. Make sure to align with all your team members and hire people with good work ethics and similar values of your company. A good sales team should be competitive, goal-oriented, and metric-driven. The sales managers and VPs will be really crucial in shaping the team dynamics and culture of your business. Hire great people and the numbers will take care of themselves! We’ve identified 8 elements of a successful sales strategy that every Saas sales strategy should include 1. Solidify your value proposition It is so important to understand thoroughly and communicate your product’s core value proposition. If someone decides to buy your product, they should know how to use the product and how to get the most out of it. 2. Superb communication with prospects Communication is of the utmost importance. Make sure your prospects understand your product and how it will help their business. Inform them of new product updates 3. Strategic trial periods An effective strategy is to give potential customers a free trial of your product to understand your value proposition. You want to make sure not to make this trial period too short or too long. Make it strategic so the prospect will understand the value prop but also be encouraged to make a buying decision. 4. Track the right SaaS metrics Tracking your core metrics is vital to success. See a few of those below: Customer Acquisition Cost – the amount of money it takes to acquire a new customer Customer Lifetime Value – the amount of value a customer provides your company over the course of their relationship with you as a customer. Lead velocity rate – the growth percentage of qualified leads month over month. This will help you understand how quickly you are qualifying your leads Related Resources: Our Ultimate Guide to SaaS Metrics & How To Calculate and Interpret Your SaaS Magic Number 5. Develop a sales playbook Every successful sales management team should develop a playbook on how to deploy their resources and where each team member should spend their time. Playbooks are often thought of in sports terms, but they also work wonders in the business world. They will help you do things efficiently and effectively. 6. Set effective sales goals How many new customers does your business hope to bring in next month? This is an important question and one your whole sales team should understand and work towards! 7. Utilize the right tools to enhance the process Your team should have all the resources at their disposal to communicate effectively and track their metrics. As you build out your strategy and team, be sure to give them all possible resources at their disposal. There are tons of great tools out there for teams to make the most out of their time and have direct methods of communication with customers and one another. 8. Establish an effective customer support program A huge part of an effective sales strategy is welcoming potential customers and making sure your existing customers are not forgotten about. When customers reach out, it is important to talk and listen to their issues. Understand what they are needing so your product can continue to evolve. Make sure anyone getting introduced to your product will also have the information they need to use your product successfully. It might be helpful to include this member of your team in your sales meetings and keep them informed as to messaging and efforts for growth! Generate support for your startup with Visible Developing a successful SaaS sales strategy is not an easy task. It will take a hybrid approach of many of the elements listed in this article and will need attentive members of your team to nurture it and test new things. We created Visible to help founders have a better chance for success. Stay in the loop with the best resources to build and scale your startup with our newsletter, the Visible Weekly — subscribe here. Related resource: Lead Velocity Rate: A Key Metric in the Startup Landscape

Jessica is the co-founder and president of Maad, francophone Africa’s fastest-growing B2B e-commerce player. Jessica and her team adopted Visible in December 2021 to start sending out investor updates for the first time after closing a pre-seed round. Since then the team at Maad has continued to leverage Visible’s suite of fundraising tools such as data rooms and pitch decks. Maad successfully closed its seed round led by Ventures Platform in late 2023. Read more about their recent coverage in TechCrunch here. This case study details why Maad chose Visible and the specific solutions they leveraged to support the successful raise of their seed round. Jessica's Founder Journey—From Airbnb to Empowering Retail Owners in Africa Maad was co-founded by Jessica Long in 2021. Jessica has a demonstrated passion for creating software that adds value operationally. She fostered this passion in her previous work as a software engineer at Airbnb, building systems to support novel machine learning and crowdsourcing technology at Idibon in San Francisco, and leading the development of national digital health platforms in West Africa as the Director of Global Services at Dimagi. Jessica started Maad because she believed that better data tools could transform the business landscape of Senegal and other developing West African countries. After spending two years building out a generalizable tech platform to track field operations of all kinds, she and her cofounders zeroed in on the informal retail market. With 100,000s of small shops sourcing the same products from a patchwork supply network, Jessica saw a big opportunity to connect small shops directly to the agribusinesses supplying them. Maad is now Francophone Africa's fastest-growing B2B e-commerce player. Maad supplies food, beverages, and everyday household products to thousands of small shops. The company is dedicated to empowering traditional retailers in Francophone West Africa. Their product offerings provide traditional retailers with a mobile app that’s a one-stop shop for all their supply needs and Fast-Moving Consumer Goods (FMCG) brands with a complete picture of the fragmented consumer market. The Need to Professionalize Investor Communications After Raising a Pre-seed Round Maad closed a pre-seed round in 2021 led by Launch Africa, Oui Capital, and Alumni Ventures. This was the first time Jessica and her cofounders had ever sent out monthly investor updates. Their first attempt included a few bullet points in an email to which her investors gave her feedback: “You could be doing this more professionally.” Jessica’s early investors explained that monthly updates are often the first thing that new investors will look at to understand the trajectory of a company. “Writing crisp, effective updates was one of the best ways to showcase our company’s growth and development,” - Jessica Long, Co-Founder and President of Maad The team at Maad took this feedback to heart and evaluated several tools for the job. In response to why Jessica chose Visible she shared, “Visible struck us as the best choice, with its emphasis on high-quality email reports.” Jessica highlighted specific features that made Visible stand out: Filterable contact lists that make it easy to manage the email’s audience The ability to add charts and graphs inline The optional live data integration The ability to add photos and GIFs Recipient engagement tracking Maad’s Growing Need for Visible’s Fundraising Solutions Originally Maad’s primary use case for Visible was sending out monthly updates to investors. When Maad started its second fundraise, Visible became its centralized fundraising solution where they also hosted their pitch decks and data rooms as well. “It truly became a home for sharing information with investors about our company.” - Jessica Long, Co-Founder and President of Maad Since first leveraging Visible in December 2021 to update current investors, Maad utilized Visible’s more advanced fundraising solutions and successfully closed their Seed round of $2.3M (in equity) in late 2023. The round was led by Ventures Platform. Read more about the announcement of Maad’s recent financing in TechCrunch here. Visible Impact on Maad’s Investor Engagements Visible has equipped Maad to send high-quality investor updates every month since December 2021. Visible's update engagement tracking allowed Jessica to see how closely prospective investors were following her company, which helped their team prioritize their timespend during the seed stage fundraise. Increasingly, the team at Maad kept all investor-related information assets on the Visible platform including monthly investor updates, pitch decks, and data rooms. This created a clean and consistent place for sharing information and tracking engagement. “Every month we get compliments on the quality of the investor updates we are able to generate with Visible’s platform.” Maad’s Top Four Visible Solutions Jessica shared the key advantages of using the Visible platform are: The beautiful and polished investor updates Thoughtful collaboration and versioning features Engagement tracking Consolidation of all major sources of investor information onto a single platform Below are some examples of some of Maad’s favorite solutions in Visible. 1) The ability to store investor updates all in one place. This makes it easy to review previous updates, track engagement rates, and resend the updates if needed. 2) Fun features like directly embedded GIFs in newsletters allow us to connect with Maad’s supporters with more immediacy. 3) Uploading different pitch decks to the same link is an incredible feature for us. We love the versioning and collaboration this allows us internally, while presenting a unified experience to external collaborators 4) Beautiful graphs, directly configurable on the platform, are one of the most popular features of our monthly updates:

About Airtree Ventures Airtree is a Sydney-based venture capital firm backing founders based in Australia and New Zealand building the iconic companies of tomorrow. The firm was founded in 2014 and is now deploying out of its 4th fund with $1.3 billion in assets under management. Their portfolio includes over 105+ portfolio companies and 250+ founders who have helped create over 17,000 jobs. Airtree’s portfolio includes the region’s breakout technology companies, such as Canva, Go1, Employment Hero, Pet Circle, Immutable, and Linktree. For this case study, we spoke to Dan Lombard who is the Data Lead at Airtree Ventures. Related article: Airtree Ventures already returned its first fund thanks to Canva while maintaining the majority of its stake Fragmented Systems and Processes Prior to Visible Prior to the integration of Visible, Airtree relied heavily on a fragmented system of spreadsheets to manage their portfolio of 105+ companies. Each quarter, four employees were tasked with managing the relationships with the points of contact at 15 to 20 portfolio companies through manual outreach and communications. This reliance on spreadsheets resulted in inefficiencies and potential data loss, as spreadsheets are prone to break when modified. Challenges With Data Accuracy and Scaling Manual Outreach to a Growing Portfolio Before Visible, 80% of Airtree’s portfolio monitoring problem was having clean data and scaling outreach to their portfolio companies. They faced two primary challenges with their former system: Operational Efficiency: Four team members spent significant time manually collecting data from over 100 companies every quarter. The Airtree team members were sending one-off email communications to each company and manually keeping track of who needed to be followed up with at each company which diverted resources from other critical projects they could be working on. Data Integrity and Scalability: Frequent changes to the data in spreadsheets resulted in errors in the sheets and data loss, which caused frustration as there was no way of understanding which changes were made to the sheet and when. This process made it difficult to scale portfolio monitoring operations as Airtree grew. Why Airtree Chose Visible as their Portfolio Monitoring Platform Airtree chose Visible for its robust, scalable, and user-friendly platform. Key factors influencing their choice included: Ease of Use and Customization: Visible's platform offered unparalleled customization and ease of use. Support and Development: Visible’s team actively listened to feedback, offered best practices, and continuously invested in their product, ensuring a partnership that catered to Airtree’s evolving needs. Automation and Integration: Visible excelled in automating portfolio monitoring and offered a frictionless experience for founders. Airtree leveraged the Visible API to seamlessly integrate data into their existing data warehouse system. Airtree’s historical data collection process, previously led by four Airtree team members, is now a streamlined process led only by Dan, who leverages Visible Requests to collect data from their portfolio of 105+ companies. Visible Requests empowers Dan to send customized link-based data requests to each company, automate the email reminder process, and easily keep track of where companies are in the reporting process. View an example Visible Request below. Onboarded to Visible within 24 Hours Visible provided Airtree with an efficient and supported onboarding. When asked about Airtree's onboarding with Visible Dan Lombard shared the following: Visible stood out by enabling a swift and seamless transition that was operational in less than 24 hours, a stark contrast to other providers who estimated a quarter for full implementation. This rapid integration was facilitated by a comprehensive onboarding template provided by Visible. Visible API & Airtree’s Data Infrastructure With the implementation of Visible, Airtree wanted to take a more sophisticated approach to the way they handle their portfolio data with the goal of driving more valuable insights for their team. The approach needed to be automated, integrate with other data sources, and have a singular view accessible for the whole team. This was not possible when their data lived in disparate systems, files, and spreadsheets. Dan Lombard has led the improvement of Airtree's data infrastructure. Now, data sources like Visible and Affinity are piped into Snowflake via recurring AWS Lambda jobs. Airtree leverages the Visible API daily. Dan mentioned that while Airtree collects data quarterly, a daily sync of the data is crucial because Airtree is always onboarding new companies, communicating with their founders, and uploading historical data. “The Visible API gives us this level of daily fidelity and only takes the AWS Lambda job 5 minutes to populate an entire data architecture.” - Dan Lombard, Data Lead at Airtree Ventures Once the data is in their database, Snowflake handles the ETL and entity matching. Airtree then has Streamlit sit on top of Snowflake to query data, provision access, and build out new insights. Advice for Other VC Firms Building Out Their Data Infrastructure Don’t overcomplicate things to start. It is easy to get caught up in the bells and whistles. Dan recommends a bias towards simplicity. Start small and use it as a stepping stone as you build things out. Conclusion Airtree’s adoption of Visible transformed their portfolio management by automating key processes and centralizing data, thus enabling more strategic decision-making and efficient operations. The case of Airtree is a testament to how the right technological partnerships can profoundly impact business efficiency and data management.

It’s common for venture firms to start raising their next fund in the last year of capital deployment, typically years 3-4 of a fund’s life. This poses a sort of chicken-and-egg problem because many of the common fund performance metrics that Limited Partners use to drive allocation decisions only become reliable, and therefore more meaningful, around year six (Source: Cambridge Associates). Farooq Abbasi, founder and General Partner of Preface Ventures, created a Seed Stage Enterprise VC Funding Napkin to help GPS think through alternative fund metrics that help communicate performance outside the traditional indicators that LPs use to measure success for more mature funds. The Seed Stage Enterprise VC Funding Napkin helps answer the question "What is good enough to raise a subsequent fund in the current market conditions". Farooq from Preface Ventures joined us on Tuesday, February 27th for a discussion about the fund performance metrics GPs can use to benchmark and communicate fund performance when it's still 'early'. View the recording below. Webinar Topics The issue with ‘typical’ fund performance metrics for ‘early’ funds Overview of Preface Venture’s Seed Stage Enterprise VC Funding Napkin Deep dive into alternative early performance benchmarks How to keep track of alternative fund performance metrics How to leverage alternative fund performance indicators into your fundraising narrative Inside look into how Preface Ventures keeps LPs up to date Q&A Resources From the Webinar Christoph Janz's What does it take to raise capital, in SaaS, in 2023? Preface Ventures' A GP's View on VC Fund Performance When It's Early Diversity VC About Preface Ventures Preface Ventures is a New York City-based firm started in 2020 led by Farooq Abbasi. Preface invests $500-$2M at the pre-seed and seed stage into startups who are building the Frontier Enterprise structure. Preface has 20 active positions in Fund II and 7 active positions in Fund III. (Learn more)