What Breaks in Sales Organizations When Going From Seed to Series A?

Here’s what the move from Seed to Series A looks like for revenue or sales organizations. The dollar amount of funding will vary, but usually, how these rounds differ is in moving away from a primarily founder-led sale–you may have a small sales organization of 2-5 people, but the founder is still leading most sales.

In the early days, the main focus is just getting to $1 million annual recurring revenue, and you’re not really thinking about replicability. Going from Seed to Series A is when you start to think about scaling, and begin to professionalize what you’re doing around your people, processes, infrastructure and technology, so you can formalize a process and get people up to speed faster–and that process is repeatable.

I’ll cover this more in-depth in the video, but the three main areas that are going to break within the sales organization and prevent you from going from Seed to Series A are:

  1. Documentation of the process;
  2. An optimization culture; and 
  3. Your people.

Documentation of the Process

I see this happen all the time in startups. They don’t take the time to document the sales process. It’s not about creating a playbook that sits there, or making things so strict that your salespeople can’t continue to experiment.

But if you don’t have a baseline, you won’t know what to improve. Documenting your rules and procedures helps you optimize them, leading into the second thing that often breaks a startup.


An Optimization Culture

In this stage of growth, there are a million things to do. You build a playbook, you build an outbound process, you build an account management process, and you don’t build in how you’re going to continue to optimize. You have a million fires to put out, so you’re happy to move on when something seems done.

My big advice here is to have a reflection day at least once a quarter (once a month if you can) and put in place an always optimizing culture from the beginning.


Your People

I cover a few reasons why and how startups hire the wrong people in the video, but the main one I’ll touch on here is this: You should be hiring for the job you need done right now. Not the job before, and not the job you need in a year and a half from now. 

You may think a VP of Sales is what you need to hockey stick your growth at this stage. But the average tenure of a VP is shorter than it’s ever been because they’re getting hired at the wrong time or for the wrong job.

The truth is, a VP of Sales is not the role you need filled right now.

There you have it, the three things that will most often break and prevent amazing startups from getting their next round of funding. 

Jake Dunlap designs repeatable, sustainable sales models and processes that outperform industry standards. As the founder and CEO of Skaled, Dunlap helps executives around the world accelerate business growth with data-backed sales solutions. Before building Skaled, he held the roles of VP of Sales at Nowait (acquired by Yelp), Head of Sales + Customer Success at Chartbeat, and VP of Sales at Glassdoor (acquired by Recruit Holdings for $1.2 billion in 2018). You can find him on LinkedIn.

  • Originally published November 3, 2020