𝗕𝘂𝗶𝗹𝗱 𝗧𝗿𝘂𝘀𝘁 𝘁𝗼 𝗥𝗲𝗮𝗰𝗵 𝗚𝗼𝗮𝗹𝘀

Startup Lessons Decoded: Real Stories and Insights

This series of four posts looks at startup journeys and key learnings from working with successful founders to provide practical insights to save time and costs.

Build Trust to Achieve Profitability and Reach Goals

The founders of a B2B SaaS data analytics company were determined to grow their business with the goal of a strong exit, likely through acquisition.

They were equally committed to building a culture that respected and encouraged contributions from all employees.

The company had grown steadily over seven years and was seeking Series B funding to expand its product features, enabling entry into new markets.

In SaaS, profitability effectively allows companies to operate and grow without the need for immediate funding. At the same time, profitability attracts investors, enhances valuation, and increases exit opportunities.

The founders valued strong metrics when discussing potential exits and knew that profitability would showcase revenue strength and product fit.

"There is a very fine line between success and failure.

Just one ingredient can make the difference."

– Andrew Lloyd Webber

As our Series B was weeks away from closing, we faced a critical juncture: We needed to achieve profitability before the new funds would be deployed, but our financial projections showed that profitability was six months away.

So, we had a lot to do and little time to get it done.

We consulted with various professionals: attorneys regarding costs, accountants about capitalizing expenses, and advisors for the deal.

Most importantly, we turned to the team. The founders always and openly shared progress and setbacks. We regularly disclosed financials and actively sought feedback.

When we discussed this profitability goal, employees responded by proactively approaching me with helpful suggestions.

They offered to delay training, reduce marketing spend (without stopping campaigns), and postpone planned purchases during the targeted month.

This collaborative approach proved essential in achieving our goal. We saved enough to reach profitability just before deploying our new capital.

The founders proudly announced this accomplishment to investors and the team. They later used this achievement when talking with potential acquirers.

A few years later, Automattic WordPress VIP acquired the company.

Profitability is crucial. Fostering trust with the team encouraged collaboration and motivation to help the founders achieve their desired exit.

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Our latest newsletter covers Why You Haven't Hit Your Goals

and A First Principles Approach to Responsible AI Use by Gregory Odland.

Each week, we deliver a learned insight and an expert founder's experience with a key takeaway. You can subscribe here.

𝗦𝗰𝗮𝗹𝗲: 𝗥𝗲𝗮𝗰𝗵 𝗬𝗼𝘂𝗿 𝗣𝗲𝗮𝗸 is a 500-page handbook with over 130 separate articles that ascend into topics like leadership, growth, sales, marketing, operations, finance, and teams. In five minutes, learn the best methods and practical solutions to reach your dreams.

This post was written by me with AI editing. Photo by Iqx Azmi.