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What I Wish I Knew

Five Lessons on Fundraising from CEO & Enterprise SaaS Leader Stacey Epstein

As part of Emergence’s annual Female Founder Roundtable, we brought together an incredible group of female entrepreneurs from all backgrounds to share experiences, best practices and lessons learned in an open, supportive, and connective environment.

As part of the event, Stacey Epstein shared her experiences as a first-time CEO at Zinc and from across her impressive career at some of the biggest names in the industry: Oracle, SuccessFactors and ServiceMax. Currently, Stacey is the CMO and Chief Experience Officer of ServiceMax and is one of the most talented SaaS leaders we know. She’s driven and fearless, but she’s also genuine, caring and authentic.

Given her impressive leadership experience running SaaS companies large and small, we were eager to share her incredible advice to our wider community of founders.

Serving as a first-time CEO was an incredible experience. After years of leading teams in sales and marketing, it was humbling to take on a role that pushed me beyond my core competencies. It was a challenging, yet rewarding and exhilarating opportunity to dive deeper into every aspect of the business and to expand my skills into new domains. Looking back, there was so much I wish I had known, especially in the area of fundraising. To pay it forward, I’ve captured five important lessons I learned as a first-time CEO. 

Determine how desirable you’re likely to be to investors, and act accordingly.

  • If you have that one “money slide” that highlights triple digit growth, low churn and incredible customer success, you’ll be able to decide who you want to take investments from. Since you’ll likely have many options, do the work to determine which investors are most likely to have an impact on your business, as well as the kind of people you would most want to work with.
  • If you don’t have those rosy metrics yet, your pitch becomes even more important. You’ll need to build a truly compelling case around the team, the product, the customers and the market. Equally important is to do the work to find the right investors who understand your space and can get excited about your value proposition.

Create a priority list, and practice on your lowest priority investors first.

  • At Zinc, we created an extensive spreadsheet of the potential investors for our business. We used it like a mini-CRM, and managed the fundraising process like a sales cycle. This helped keep us on track and made it easy to share progress with other board members who could help. 
  • Speak to the lowest priority investors first. Every time you pitch, you better understand what’s compelling and which questions they’ll ask. This helps you evolve and refine the pitch, so that by the time you meet with your top five investors, you’ve got it nailed. In my opinion, Emergence is the best VC enterprise SaaS founders can work with, and I’m thrilled to have partnered with them on my journey to date!

Prepare, prepare, and prepare some more.

  • Come up with all the toughest questions you can think of, and practice answering all of them. 
  • In addition to speaking to the lowest priority investors first, also practice on friendlies and existing board members. 
  • Show you know your business cold. Prepare slides explaining the major decisions you have made thus far, and demonstrate the facts and figures used to support them. 
  • Do your homework, and show why you chose the specific investors with whom you’re meeting. Speak to the value they can bring your businesses and why you are uniquely suited to work together. Do your research into each person, including their backgrounds, their track record, their investment thesis, and even their values and personal interests.

Choose carefully.

  • It can be lonely as the CEO. You have no peers and no boss, and there are topics you can’t hash out with the team. (This is especially true if you are in a turnaround situation like I was where the team kept evolving.)
  • It is very important to be thoughtful in your approach to taking on investors—who you partner with matters more than you may realize. 
  • Never look at investors as just a route to funding. They can be so much more; your expert partners, collaborators, cheerleaders and confidantes in a relationship that can last a decade or longer.

In good times and in bad.

  • Remember that when good things happen, it’s great to celebrate with the board. But when bad things happen, that’s when you need them most.
  • One of the most important rules of engagement with investors involves honesty—both when times are tough and when they’re going well. 
  • If you’ve been tweaking things all along in order to create an overly rosy outlook, they’re going to feel surprised and maybe misled when you hit an inevitable rough patch. In contrast, if you’ve developed a relationship built on trust and collaboration, your investors will be more likely to help you navigate your storm—just as you need them most. 
  • It’s great to find partners with whom you feel that you are on one unified team. Keep in mind that if you win they win, if you lose they lose. You don’t want to choose investors whom you feel you always need to impress; the goal is to find partners who will be with you both in winning and in problem solving and collaboration.