Any founder of a tech start-up will tell you there are three key phases necessary to building and growing a company. Understanding these stages, and the objectives for each, is an important factor in strategy development and decision making. Not understanding the stage you’re currently in is one of the most common reasons tech startups fail to move forward, or worse, fail.
Raising the funding in itself can be a daunting task but if you succeed in acquiring further investment the ‘performance’ clock starts ticking immediately. Usually there is a 12-18 month window to demonstrate customer acquisition success and reach the financial milestones needed to raise further funds.
There are three stages to funding a new start up:
People you know - Friends and family will invest because they have seen you shed blood sweat and tears to bring your product to market, they are investing in you as an individual and believe you can take your product to the next level and hopefully make them some cash in the process! Usually you can expect to receive around £100k at this stage of investment.
Seed Investment - At this point in your journey you can expect to attract semi-professional or ‘Angel’ investors that will take your business to the next level, but they will want to see a comprehensive business plan backed up with your market validation. Typically a seed round will raise you between £500K to £1,5M.
VC Stage - In this stage your investors will typically be Venture Capitalists (VC’S). These are professional investors with serious financial clout that will invest in a proven scalable business. VC investors are willing to pay premium value for innovative UK businesses that are scalable. More than £1.19 billion was invested in the first three months of 2019, Typically, if you reach this stage you can expect investment or around £5M to £20M.
Outsourcing your sales operations can help you hit these critical milestones.
You can develop the best technology known to man, but are people prepared to buy it. A well thought out sales strategy will help you answer questions such as: Where is your existing sales capability best placed? How do you achieve growth? What channels will work for you? Do you have the resources and knowhow to navigate a brutally competitive sales environment? What do your pipeline metrics demonstrate?
Increasingly, companies are considering outsourcing their sales teams. This is being driven by a number of reasons: the scarcity of good technology sales people available, the constant management overhead that running a sales team requires, the inevitable HR overheads etc. etc. etc.
Make it someone else’s problem!
The decision of whether to outsource all or part of your sales is not a matter of cost. Think about it like this; If you can prove your companies true value by hitting your financial goals you will retain more equity in the business when it comes to your Series B funding. Thats a huge win!
The outsourcing of lead generation, above all, saves time and effort when organising a staff’s workload and its quality control. The implementation of new processes requires an expenditure of resources which may not always be available, and upon outsourcing this task, a company can focus on closing sales and will not be distracted by the added time and energy spent finding new potential customers and nurturing them.
If you’ve ever been involved in a sales outreach campaign, you know that the majority of your efforts are not successful. Cold outreach is hard work that often has low returns. Instead of reaching out to many different people, connect with those who are ready to talk about your products and services.
But how do you do that? Well, let’s face facts here. Not all salespeople have the same skill set. Some are great at finding new prospects, some are great at nurturing them, and some are great at closing. It is rare to get someone who is fantastic at all three.
Working with a company that has skilled sales teams who are capable of finding you those prospects who are ready to buy can be a godsend for your sales endeavours.
So what would you prefer to have your sales team doing – finding new leads or closing existing ones? When you get someone else to do the bulk of your lead generation, they can send you the qualified leads, already scheduled to meet your sales teams.
These key contacts will be confirmed as ready and interested in talking to you, allowing you to spend your time having a higher-level discussion with these future clients.
Most importantly the capital freed by not hiring, supporting and equipping an entire sales team will enable you to focus your efforts and on perfecting your product and as more feedback from the market comes in you can focus on the really critical part of your business. Your product and vision.
How do you choose the right outsource sales company?
- We have established that outsourcing B2B lead generation is a great way to boost productivity and efficiency, if done correctly. Invest time upfront learning how to choose the right outsourcing partner, and you can ensure that the decision produces real ROI.
- Know your clear, specific goals going in. Why do you need to outsource?
- Choose an outsourcing partner that is well-established in their industry.
- Negotiate and carefully review the contract before signing, to avoid productivity-killing misunderstandings.
- Select a partner that is easy to work with on a day-to-day basis. Make sure they are communicative and responsive.
- Understand and be clear about the ROI you will see from the sales efforts
In summary; outsourcing lead generation will help a start-up businesses achieve rapid scale-up, helping you prove your product is ready for market and make the case for your next round of funding whilst helping you control costs in your initial growth phase. Also; don't forget about retaining your hard earned equity!
Excelerate360 - the outsourced sales company