TL;DR: Startup struggling to grow post-Seed, any advice for future funding rounds?
I'm the founder of a B2B marketplace startup. I was a solopreneur during most of 2019 and bootstrapped the entire business. I launched the product in Q3 2019 and began acquiring business customers quite soon after launch.
We raised a pretty sizeable seed round from a VC right before Xmas 2019 and I spent the first 3 months hiring two experienced senior team members (Ops & Tech), and developing our branding & website.
At the end of January this year, we were seeing average growth, probably getting a new business customer every 2-3 weeks. We weren't too worried as we were still developing our product, funnel, sales strategy and so on.
Once COVID hit, like many of us, all sales and interest took a nosedive. Our pipeline turned to shit, and they claimed to no longer have budget for our product, despite it sitting in a relatively integral function of a business (HR/Culture).
Our strategy to cope with this so far:
- Circle back on our product. We recently retained a great UX/UI designer for a lot less than his market value (due to being furloughed) to properly design what I had bootstrapped and sold to clients. Prior to covid, the strategy was to sell what we had (a crappy looking but very functional platform) for as long as possible until our revenue reached a milestone that triggered a redesign.
- Focus on getting the most out of our current clients. Our platform is accessed by all employees of a business, so our focus was to boost engagement so we can potentially grow their account size. Moreover, we could use that to build case studies to attract new customers
- Slightly shift our marketing strategy. We ceased all direct sales advertising, and have now ceased cold-mailing and outbound campaigns. Instead, we are investing our budget on building brand recognition and awareness in our sector so that we are top of mind when things go back to normal.
- Market research. The nagging question mark is that of Product Market Fit. I fear that early signs of PMF we had before covid-19 are now out of the window as those businesses have been dealt a hammer blow. So our challenge now is to build a method in which we experiment and test different iterations and marketing messages to see which market segment gains the most traction.
My worry is: without growth, are we a lame duck?
Why I've decided to post. I'm anxious that we're not going to be attractive to any investor if we haven't shown aggressive growth, despite the recession.
My question to you:
What are the kinds of achievements to strive for, if growth is not possible, to investors in Q4 2020 in order to raise another round?
Currently we have a run rate of about 15 months which is OK but that's if we strap ourselves in and essentially only pay salaries.