Cookie Consent

By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyse site usage, and assist in our marketing efforts. View our Privacy Policy for more information.

From start up to scale up – The Investor Perspective

Kriya Team
February 14, 2017
min read
Share this:

We caught up with Gareth Jefferies at Northzone to get a venture capital investor’s perspective on the tricky scale up phase in the life of a business.

We caught up with Gareth Jefferies at Northzone to get a venture capital investor’s perspective on the tricky scale up phase in the life of a business.

The scale up phase of a business is a tricky time for founders and teams, but have you ever wondered what a venture capital investor’s view is? We caught up with Gareth Jefferies at Northzone to get a unique perspective on this make-or-break time in the life of a business.

At Northzone, we have seen the scale up process a number of times. Our companies all go through it, some successfully, some less so. It’s a hard time in the lifecycle of any business, but if you get it right you’ll be set for growth. Here are our top tips on the key things to think about while you scale up your early stage business.

Have a clear roadmap for growth

As you grow, you have to formalise functions and have a clear roadmap of where you are going as a business.

At a Series A fundraise, investors would like you to have found product/market fit, and by Series B, they will definitely expect to see this. By this stage you should have the core value proposition nailed down and have scalable, well-understood acquisition channels in place – then you can test additional products and geographies separately.

If you’re a B2B business, investors will expect to see a handful of flagship customers that love you, and low churn.

Control your burn

As you scale up, you need to control your burn rate. We often see companies that expect their unit economics to stay the same, or improve, as they grow.

The reality is often different. Your early customers are easier to convert; the latter ones may require more effort, and therefore your customer acquisition costs may well increase. As you expand, it is sometimes tempting to ‘pre-scale’, and overspend on hiring. It’s important that you and your team keep a close eye on costs at this stage.

This is one of the reasons why investors like to see businesses being data-led in their decision making – the possibilities can seem to be endless with a scale-up company, it’s important you have the focus and discipline on scaling up the right things.

International expansion

As you scale, you will perhaps be looking at international markets. Taking the step to open an office abroad is a big one, and finding the right country manager is not easy.

If this is a next step for your business, we’ve often seen success when country managers are treated like ‘founders’, rather than employees. Of course, they can use the resources and learn best practice from HQ, but the most successful country managers are the ones who are given the autonomy and responsibility to go and build the business in their particular market.

Raising capital

If you need to raise more external capital from new or existing investors to support your growth plans, remember that your board structure will become more complex.

Make sure your cap table is in order (ideally this starts at seed stage) and remember, no venture investor likes to see a founder or founding team who no longer holds a significant stake in their company.

Get your culture right

Finally, getting your culture right is hugely important as you grow. When you are small, the culture is created by the people around the table but by the time you are scaling up, you have to formalise this.

It’s important that you keep culture in mind across everything you do – like hiring, marketing – even your office environment. It’s one of those things that’s intangible and complicated to define but if you lose it, it’s very hard to get it back.

Implement strategies to ensure the employees understand the culture and values of the company, and keep a two-way dialogue open as much as possible.

About Northzone

Northzone is a technology investment partnership. Since 1996, they have been chosen by exceptional entrepreneurs as a long-term partner for growth. So far, they have invested in over 100 companies (including MarketInvoice), injecting some 200 years of collective operational and investment experience into businesses that truly make a difference.

B2B Payments to boost your growth

To learn more about our payments and digital trade credit solutions book a call with us today.
Email is invalid.
Please use your company email address.
Annual Revenue*
We’ll use this information to get in touch with you about our products and services in accordance with our Privacy Policy. You can unsubscribe at any point. By submitting, you acknowledge we reserve the right to work with businesses that have been trading for a minimum of 12 months and have submitted at least one set of financial accounts.
Thank you. A member of the team will be in touch.
Oops! Something went wrong while submitting the form.

Explore related posts

Company News
Nov 30, 2022
Kriya is the new name for MarketFinance. We are a fintech platform that keeps business flowing brilliantly by providing frictionless access to payments, credit and working capital through instant credit decisions and the easiest of integrations.

MarketFinance is now Kriya!

An important milestone for our business: Kriya is the new name for MarketFinance. Our Co-Founder and CEO, Anil Stocker, explains how we keep business flowing brilliantly.

Anil Stocker
 min read
Read more
CEO and Co-Founder Anil Stocker on digital revolution in B2B eCommerce

From hailing London taxis to ordering an Uber: why an even bigger digital shift will happen in business e-commerce.

Uber transformed the taxi industry forever. The same digital change is now coming for business e-commerce.

Anil Stocker
 min read
Read more
Kriya Payments
Nov 1, 2022
Customer browsing eCommerce site of B2B business with embedded finance powered by Kriya Payments

Embedded finance for B2B businesses (summary)

We make it easier for your business buyers to purchase from you. Read on to find out how our Embedded Finance platform and B2B buy now, pay later payments offering keeps your business flowing brilliantly...

Kriya Team
 min read
Read more