Congratulations, you’ve raised your first institutional investment. Hear 7 tips from 10 founders who’ve raised over $500m on setting yourself up for success

Raising your first institutional investment round is a pivotal moment in the life of any startup. It’s not just about receiving a financial boost; it’s about navigating new expectations, executing against ambitious growth plans, and building a foundation for long-term success.

As exciting as this stage is, it’s fraught with challenges that, if not managed correctly, could derail the progress of even the most promising ventures.

Several experienced founders who have been through this journey shared their insights on how to make the most of this moment and avoid common pitfalls.

Here’s what they had to say:

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1. Get Ahead, Stay Ahead - Chart the Course of Your Company

"Most founders are playing catch-up to targets, investors, and market changes. The real challenge is to do the hard work upfront so that you’re driving the evolution, not firefighting," explained one founder. After raising your investment, you must take the time to refine your strategy, focusing on both what you will and won’t do.

Achieving this level of foresight is easier said than done. It requires meticulous planning that goes beyond day-to-day operations. It means having a clear vision of the market landscape and how your business can evolve within it. While most founders are focused on short-term goals, the key is to make time for broader, long-term thinking. “I haven’t fully mastered this myself,” the founder admitted, “but it’s something every founder should aim for.”

Another founder highlighted the importance of separating hype from reality. “Don’t just do whatever you sold your investors. You were high on deal energy. Come back down to earth and think carefully about what is real and what is hype. Your investors will push back but your job is to make money for them not to follow their instructions” Another founder said “Update your goals and timelines (depending on when you started to fundraise, it already can be outdated”

One founder highlighted the importance of mental health; “Invest in a good therapist, a good coach and a good financial advisor for your executive team instead of lavish lifestyles/ office spaces. This will help you all create a sound and healthier environment which will help create a culture of better psychological safety and accountability top down (especially down the line when things don’t go according to plan)”

Also, plan diligently for your next round by developing a roadmap that outlines how you’ll spend your capital to reach milestones for your next raise. Regular financial reviews and forecasting are crucial to staying ahead.

Actionable steps:

• Re-adjust/clarify the KPIs and milestones for your team and investors.
• Write down strategic decisions, including things you’ve decided not to pursue.
• Ensure everyone is aligned on the company’s vision and path forward.
• Start thinking seriously about culture and begin to implement some systems

2. Be Mindful of Hiring and Titles

It’s tempting to expand rapidly after securing investment. Don’t rush into hiring. “Do not hire more people before evaluating current team capabilities and investing in people performance processes, remuneration, and evaluation stack,” advises one founder. The temptation to rapidly expand can lead to inefficiencies if done prematurely.

“Do not double your fixed costs in the first 6 months; ramp up operations gradually with variable costs,” shared another founder. Instead of doubling your fixed costs with full-time hires, consider using contracted talent. This approach gives your company more flexibility.

However, one founder offered a word of caution: “Don’t over-hire and don’t over-title.” At this early stage, the founder noted, it’s easy to fall into the trap of hiring too many people, but you’ll often find that a small, focused team can achieve more than you think.

Equally important is resisting the urge to hand out “C-level” titles too soon. Not everyone who joins your startup early on will be the right person to help you scale later. “A good number of these people may be strong contributors, but not necessarily the leaders you need long-term. If you make them Chief Something right away, it becomes really hard to tell them later that you’re bringing in someone above them.”

As your team grows, it’s important to build the right structures for success. Codify (write down) a shared set of values, culture, and processes around things like hiring, reviews, and general team management.

This can eventually form the basis of a team handbook that everyone refers to, ensuring fairness and consistency as you bring more people on board.

One founder highlighted the importance of solid founder agreements, “Do not forget to get a good lawyer to review all your contracts especially founder agreements - money always brings people’s true colors (including yourself) which may not be what we expect. Always guard your operations against greed”

Actionable steps:

• Evaluate your current team’s strengths before expanding. Avoid handing out C-Titles
• Codify values and processes for hiring, reviews, and management
• Reserve senior leadership titles for the right stage in your company’s growth.

The founders who gave feedback on this section;

Fintech founder who raised over $125M, and their company is currently at a Series B

Fintech founder is currently at the Seed Stage who has raised over $2m in funding.

3. Test Everything Before Scaling

When it comes to growth, a measured approach is best. “Test, test, test,” one founder advised. Before committing large amounts of money to marketing, operations, or sales strategies, run small tests to validate what works. It’s crucial not to commit large amounts of money to a single marketing play or operational strategy without first running smaller tests to validate what works.

By adopting a mindset of constant testing and iteration, you reduce the risk of wasting valuable time and money on approaches that don’t resonate with your customers or business objectives. This way, when you do decide to scale, you’ll do so with much more confidence and efficiency

One founder cautions against the temptation of unfocused spending, “New offices, random roles that they don’t need, distracting ventures and partnerships that don’t fit the strategy. Only spend the money when you see metrics moving”

• Start Small: Test marketing, operations, and sales strategies on a small scale before committing big budgets.
• Iterate Constantly: Refine your approach based on test results to maximize efficiency and impact.
• Spend Wisely: Only scale up when metrics show proven success; avoid distractions and unnecessary costs. Keep things lean.

This founder built an insurtech and has raised over $3m, they are now at the Series A stage.

4. Don’t Outsource Sales Too Quickly

One founder recommended keeping your sales and marketing lean during this period, suggesting that founders should lead sales efforts themselves. "Founder-led sales ensure a perfect feedback loop between the customer and your business direction," they noted.

Early customer interactions provide critical insights that help refine your product, positioning, and overall strategy. This direct involvement also builds credibility with early customers and can help establish stronger relationships.

This founder raised over $3m in an oversubscribed seed round in Europe and is building in the B2B software space.

5. Start Planning for the Next Round

One founder stressed that receiving investment should immediately prompt you to start thinking about your next funding round. “You need to plan diligently for where you need to be by the time your runway ends,” they advised. The time starts ticking from the round close. This means developing a clear roadmap that outlines how you’ll spend this round’s capital to reach the milestones that will make you attractive for your next raise.

Regular financial reviews, proper accounting, and forecasting are essential. You need to know how every dollar spent impacts your growth trajectory.  Make a list of the potential investors you want in your next round and engage them early. Especially with later stage investors, dots need to become lines – share key milestone targets with them, and provide periodic updates—not just about good news, but also about challenges and what you’re learning in a way that is manageable and doesn’t distract.

Transparency can help build strong relationships for future fundraising efforts.

Actionable Insights

• Plan ahead: Create a roadmap to hit milestones that set you up for the next round.
• Track spending: Regularly review finances to ensure each dollar aligns with growth goals.
• Engage investors early: Build relationships by sharing key updates, including challenges and learnings.

6. Handling Inbound Investor Interest

After you’ve announced your funding round, you’ll likely receive a flood of inbound interest from other investors. One founder recommended not getting too distracted by this: “Take the intro email, and if relevant, pencil in calls for six months down the line.” Right now, your focus should be on executing your current plan, not getting sidetracked by future fundraising conversations.

It’s important to stay laser-focused on the near-term execution of your business. Investor connections may prove valuable later, but the immediate priority should be delivering on your current milestones.

7. Ditch the Panels, Heads Down, and Build

Another key insight was to stay focused on building your business rather than chasing public relations or industry events. “Say more Nos to PRs, talks, seminars, and all that,” one founder advised. While these activities can be tempting, especially as your profile rises post-investment, they can easily become distractions from the core work of product development and growth.

At this stage, your time is one of your most valuable resources, and it should be spent building your business and executing your vision. There will be plenty of time for PR and external engagements later when you’ve scaled further.

Final Thoughts

Raising your first institutional investment is a significant milestone, but it’s just the beginning. Success at this stage hinges on your ability to stay ahead of the curve, build a lean and effective team, focus on product and customer feedback, and manage your capital efficiently.

A huge thanks to the founders who shared their experiences and gave useful feedback below;

1. Has raised over $36M, and their company is currently valued at over $300M.
2. Is currently at the Series A Stage and has raised over $3m
3. Has raised over $2m and is at the Seed Stage
4. Founder of DudeChem, who as raised over EUR7m+
5. Founder of insure tech who has raised over $3m, they are now at the Series A stage.
6. Founder raised over $3m in an oversubscribed seed round in Europe and is building in the B2B software space.
7. Founder exit to a global company and raised $3m+ in its seed round for a fintech startup.

By following these pieces of advice from experienced founders, you’ll set yourself up for long-term success and be well-positioned for the next stage of your company’s journey.

If you have founders in your network who are raising their first institutional round do share with them here ->www.openseed.vc/apply

Thanks

Openseed VC