The Series A Founder’s Guide to Revenue Operations
Scaling a business from Series A to Series B typically means growing revenues from $3m ARR to $10m ARR.
For companies at the top end of the venture track following the T2D3 model (tripling revenues two years in a row, then doubling for three years in a row) this means reaching this next milestone in just five quarters.
You can see this in the chart from ICONIQ below
Source: ICONIQ
This week I published my guide for Series A founders to help you understand the tasks in front of you as you scale your Go To Market function from around 15 people, to 70 people in such a short time frame.
You can access the 45 minute video module here:
In this article I’ll pull out the key topics.
Financials of a Series A and Series B business
ICONIQ and Carta provide recent data that shows the typical financials for a business at each stage.
A recently funded Series A business is typically at $3m ARR and top performers growing at 430%. (although noted that these companies are scaling from a small base)
By Series B revenues have touched $10m and the company is now almost doubling each year.
Scaling the Go To Market team
At $3m ARR the Go To Market team typically consists of around 15 people.
At $10m ARR and Series B, that team will have grown to around 70 people.
Given the speed at which this phase can occur, you need to be planning for this hiring today if you aren’t to fall behind.
Jobs to be done
Notion Capital, Scalewise and SaaStr provide some helpful insight into what needs to be achieved in this phase if you are to successfully raise your Series B.
Building a predictable go to market organisation is critical - demonstrating that if you put your foot on the gas the machine will accelerate consistently.
Common Problems
As you scale your team and bring in new leaders and individual contributors, common issues can arise.
Don’t fall into the trap of blindly using a playbook that someone used at another company.
What worked at MongoDB or Zuora is unlikely to work here. Use your own eyes, encourage learning and building your own playbook.
Avoid the Marina Bay effect where new leaders come in and start to build their own hierarchies forcing cross-functional decisions up to leaders.
Maintain bridges between teams to avoid the creation of siloes.
At this phase, your Sales Director (or VP Sales if you called them that) needs to be focused on execution - in the trenches with their team, in front of customers, closing deals, figuring out what works.
You don’t want them focused on process and systems design.
Your Revenue Operations Requirements
At this stage, if your Sales Director is focused on execution, then the building of your revenue engine lies at your doorstep for now.
Revenue Operations will give you confidence that you can predict the future growth and demonstrate consistency to investors as you approach Series B.
You should be considering topics including:
Business model design: which customers, which proposition, which pricing model, which routes to market
Define your GTM processes and playbooks - building repeatability as the team grows
Hiring your first inhouse Revenue Operations team
Defining your revenue tech stack and implementing
Buyer journey mapping
Seller journey mapping
And the list goes on, including your reporting and forecasting framework, developing sales content and training, creating a customer testimonial and referral program, launching a first partner program, developing your sales compensation model, speaking to your customers and feeding this learning back into buyer enablement tools.
There is a lot to do and you want to keep this away from your Sales Director who needs to spend their time with their team and their customers.
Revenue Operations is NOT only an internally focused function.
I use the Revenue Acceleration Flywheel to describe all the external and internal aspects of the engine you need to build for Series B.
Don’t just hire a RevOps role and focus them on creating spreadsheets and forecasts.
You need someone that can go and speak to your customers and help you scale your marketing, sales and customer success functions as one.
““If you have not invested in proper revenue operations and have it up and running by Series A, you’re going to very quickly run into a mess. Your metrics will be difficult to uncover and there will be deep inefficiencies in your team.
The most important thing to do is to fix that immediately because if you don’t seriously get your shit together you simply won’t raise Series B.” ”
Hiring the right sales leaders
In the Scalewise report - “How to get from A to B with the benefit of hindsight” the research shows during this phase an average turnover of 2.13 sales leaders.
That means that two sales hires failed - causing delays, seller attrition and hampering your ability to focus on other parts of the business.
Titles aside, at this stage you need a player/manager that is happy to get their hands dirty in front of customers and not sat in their office polishing their three year plan.
Let’s get started
That brings us to the end of the Series A Founder’s Guide to Revenue Operations.
Watch the full 45 minute module free and ungated here:
Further reading:
Notion Capital - Start, Build, Scale - from $1-$100m
ICONIQ - Saas Growth and Efficiency
Scalewise - How to get from A to B with the benefit of hidsight
Get started
Whenever you are ready, there are two ways that I can help you with your RevOps tech stack.
Buyer Experience Audit - I’ll impersonate a buyer researching your segment and company and let you know what I find. Ideal for planning your RevOps strategy.
RevOps Impact Playbooks - I’ll help you implement one or more tactical processes across your revenue teams - content, referrals, testimonials, adoption and more.