Growing a startup is a lot like developing an elite athlete: Both require a baseline of exceptional talent and a support network to succeed.
For many tech entrepreneurs, scaling up for the “big game” — or going public — is the ultimate goal. Unfortunately, CEOs commonly overlook or underprioritize a key area of their support team: their commercial banker.
As a startup, your main priorities are to nail down the product, sell to customers, and raise funds for the future. However, it’s also important to make sure your organization, particularly your finance team, is poised to support your business as it grows.
Think of your finance team as the offensive line. It’s in position to protect the company, the “quarterback,” and keep gaining ground. If you don’t have the right banking tools and systems in place, it can hurt the rest of the organization.
In the beginning, you may need only a bank account. But over time, as you grow, you need a banking team that can grow with you. Having the systems to efficiently manage your business and provide the compliance features you need will help reassure investors you are managing their investment well and also will enable your organization to scale up quickly. It’s vital to find a financial institution that knows what to look for and has the capability to grow with you — rather than having to jump to a new bank down the road.
Think of it this way: starting with the right bank is like having the wisdom of a championship-winning coach with you from the Pee-Wee leagues all the way through the big leagues.
There’s another advantage of working with an experienced team — they have the capability to introduce you to an investment banker: someone who has expertise in your particular vertical within the tech sector who can provide valuable market insight and industry analysis as you move toward your ultimate goal of selling your company or taking it public.
If your company is focused on fintech, data security, or cybersecurity, be aware that financial institutions are looking for your expertise. Some banks offer mentoring programs that can help accelerate your business. This can include a small equity investment and an assigned banking mentor that can provide guidance for a period of up to six months. It’s a win-win for you and the bank — the bank gets exposed to your technology and may decide to license it or potentially acquire your company.
For most startups, things are working “well enough” now, but when your business succeeds, the pain of manual processes can cause unnecessary pressure on your team. It’s important to find a financial institution that can help alleviate the pressure from the beginning — a team that anticipates and prevents roadblocks, rather than treating them retroactively.
As you think about finding the right fit, here are a few attributes to look for in your banking team:
- A financial institution that can make things easier, like expense-report management.
- A team of bankers who have time to hear your specific goals and pain points.
- A team that has experience within the tech industry, or has access to others within the organization who can provide specialized guidance.
- A team that can see ahead of the curve and help position you for unseen needs, such as investment planning.
If you are in fintech, data security or cybersecurity, consider financial institutions that offer mentoring programs to accelerate your business.
It’s critical to find a bank that can grow with you so that when it’s crunch time, you can sit back and signal in the perfect play — one that has your team waltzing into the end zone and raising the trophy.