The Path to Series B: Scaling Beyond Founder-led Sales with Atomico

Thanks everyone for joining. Welcome to another edition of Workshop Wednesday. As always, we are so thrilled to have you here and would love to hear where everyone is tuning in from. I am back home tuning in from Atlanta, and Laura is joining us from London. I know we always have some folks from the UK and from Europe on the call, so everyone please drop in the chat just so Laura can know who she's talking to. Already we have someone from Madrid. Laura, so definitely someone on your side of the world. And we're going to get started here in just a few moments. Just giving everyone a few minutes to circle here into the room. As you guys know, we come together every Wednesday, rain or shine, to provide these detailed, interactive, and hands-on workshops. We have a different leader walk us through their content every single week, and we have a lot of time for questions as always. So this week we are thrilled to have Laura Connell, partner at Atomiko, as she will share her best scaling tips for the path to Series B. Laura hosted an incredible panel at our London event in June. So we are just so thrilled to have her back in this format, to dive a little bit deeper into her insights and to also make sure that we have plenty of time to answer your questions. So as always, we want to keep these interactions— or these sessions as interactive as possible. So please make sure that you have your camera on so Laura can see everyone's face. And please join the chat and drop in your questions throughout the session. I will be reviewing those questions and tapping you to see if you'd like to answer it live when Laura gets to that point in her presentation. So Laura, let's just go ahead and dive right in with our little quickfire to get us warmed up here. So would love to hear what has been one of your favorite investments that either you or the firm has done in the past year.

Yeah, I'm— first of all, great to be with you all. I'm really excited for this conversation. And, you know, as we've just mentioned, I'll walk through kind of my bit of content, but then I'd really love to hear from you and just have a great conversation together. So please, you know, keep asking those questions as I'm speaking and I'll try and get to as many of them as possible. I think to answer the question and I kind of proximity bias, probably recency bias, I should say, but we just, just led an investment in a company called Corti AI. We announced that last week and that's an AI copilot for healthcare, really working at the kind of cutting edge of vertical models in healthcare. And LLMs in order to drive kind of better clinical decision-making and outcomes, selling into providers and payers in the US and Europe. So unbelievable team, you know, a really fantastic staff. And that was a Series B. And also discussing many of the topics we're going to talk about today around how to scale sales. So it's a, it's a topical one for us.

Amazing. Yeah. Excited to hear those examples that I'm sure you'll have, Lauren. Great to have— great to hear about a very, very recent investment. Next up is, it's been a roller coaster of a year, but what surprised you the most about venture capital in 2023?

Yeah, I think to not to sound kind of undue note of optimism, but it's how quickly things have come back in the last 3 weeks, some last month, you know, obviously, the first half of the year was a lot quieter in terms of volumes, you know, both in the US and Europe, but kind of across global tech fundraising, particularly at the earlier stage, your classic venture growth stage, your kind of Series B, Series Cs. But, you know, I really have to say that in the last 4 weeks, volumes have picked up again, and founders are coming out again and wanting conversations. And, you know, I'm really excited for the next couple of months. So it's one of those things that things come back always faster than you think they will.

Yeah, great answer. We love the optimism. Feels good for sure. So that leads us into our next question. What are you most excited about in the next 12 months?

Yeah, for sure. I mean, it's been a pretty extraordinary 12 months, setting the fundraising piece aside, which is frankly the least interesting part of what's going on in tech. You know, what an extraordinary 12 months it's been in terms of, you know, what we've seen, of course, on the GenAI front, but more generally in terms of, you know, incredible companies using quite a difficult environment to really double down on operations and rationalize efficiencies and all that good stuff. And so I'm very excited to see companies come out even stronger than they were prior to this very difficult time. You know, I don't want to put lipstick on a pig. It's been a very tough, tough period for a lot of people. But I think, you know, we've seen time and time again that the best companies and the best founders, you know, use the difficulty to really drive their business to the next level. So I'm really excited to kind of have those conversations again, catch up with people who've had to make difficult decisions, pivots, cuts, you name it in the last 12 months. And, you know, really, really excited to help them get to the next level, get to the next stage.

Amazing. Well, Laura, thank you so much for being here, everyone. And we're just so excited for this conversation. Just with these little previews, we know Laura has so much great insight to share from all that she's learned in her career, but also just in the past few months. So, Laura, I'll pass it over to you. And everyone, please make sure to get your questions ready and we will get kicked off right now. Brilliant.

Let me just— here we go. So I'm going to do a quick intro on me. I'm again, least, probably the least interesting person on this call, but just to give you a bit of context, you know, I joined Atomico about just over a year ago, and Atomico is a venture and growth fund based in London but covering global technology, which was founded by Niklas Zennström, who's the founder of Skype, about 20 years ago now. I've been in venture investing and on the investing side of things for a long time now, investing both in the your classic scale-up stage, but right up to kind of pre-IPO and into the public markets. So working with founders really across the full gamut and the full range of different stages. And so, you know, have seen some of the, many of the complexities and have made many mistakes myself, both in terms of kind of advice given and, you know, tough lessons learned along the way at all stages of growth. So, you know, what I'm hoping to do today is to share a little bit about you know, how on the sales front in particular, as you think about building your go-to-market, you know, how you evolve past kind of beyond founder-led sales or together with founder-led sales, which is, you know, a hot topic, particularly as you start to kind of really scale your organization operationally. You know, something that can be an immense strength can also then at some point become your limit, very rapidly become a limiting factor. So that's what we're going to talk about today. And so with further ado, no further ado, we'll move on. So, You know, as I said, the first stage of growth, usually around kind of Series A, but when you're first starting to really, you've got kind of initial product market fit, you've had, as a founder, you've had this kind of initial, very tight feedback loops with initial champions and initial customers. And that has many pros, right? Clearly, you have flexibility as a founder in terms of how you craft your narrative, your messaging, your pricing, you know, the full packaging. You can be extremely effective, far more effective because of that in early conversations. And so it's an immense strength to have early, early stage. And I would say, you know, I always kind of strongly encourage people to be as involved as they can be at the early stage, just so they have that feedback loop and they have a sensitivity for the end customer, particularly at enterprise. And so a huge pro at the beginning. Of course, also you have this natural credibility, particularly if you're talking about kind of more technical, technical products and selling into kind of more technical buyers, you know, and you you have that familiarity on the product front, you know, you of course have a natural— you are often your best salesperson. And so you have this natural credibility in the market and ability to sell early. We'll talk about that later because sometimes, you know, people, founders understandably worry about being able to systematize and train other people to do the same. But the point about it is early, of course, it comes more naturally. And I think this third point about the pros, back to the idea of this feedback loop, is probably the most important reason for which founder-led sales is such a strong model initially. You know, no one is going to ask kind of more perceptive questions often and punchier questions and build that while building a relationship with a champion and, you know, key customer than a founder is. And that firsthand knowledge early allows kind of rapid fixes from pricing and packaging to the product itself that you know, based on a very tight feedback loop, it's very hard to have, you know, at the early stage, the fewer steps between the founder, product, pricing, and the customer, the better. And so obviously, if you can, if those roles converge, that, that can often be, you know, the best, the best outcome, not always, but often very, very useful. But of course, you know, cons at some point now, you know, you've got product market fit, you've started to scale, you've got your initial customers, and now you're really trying to cross the chasm into the kind of longer tail of customers and really trying to scale, to market and accelerate growth and expansion. And moving away from founder-led sales is critical for a few reasons. The first here listed is it can be very difficult at some point when you start, particularly when you start to sell enterprise, into enterprise, larger customers, to look as credible if you keep turning up as a founder. You know, it's not always a terribly good use of your time and it will, shine a spotlight on the fact that perhaps you have not scaled operations appropriately. I think particularly as you think about servicing kind of more sophisticated clients or larger clients, you know, it's often the right thing to think about segmenting the different roles within sales, from sales to customer support to business development. And, you know, obviously a founder cannot do all these things, not least, you know, the second point, which is at some point, you know, you simply just run out of hours in the day. It is not a repeatable process. It's extremely hard to scale. And you at some point, you know, your understanding of end markets or new customers frankly may not be as good as the next best salesperson that you're able to hire. So the last point is the most obvious one perhaps. But, you know, as a founder, as you scale your organization, again, back to this idea of only having so many hours in the day, you know, it is not a good use of your time to be in every conversation. And so what I see more, what you would expect at the slightly later stage, of course, is, you know, you're, you're Many founders I work with continue to be the culture carrier, the visionary, and the closer. But it is not necessary for you to be in every part of the conversation, every, every part of the funnel necessarily. And so really preserving your time is going to be one of the single most important things that you have to do, as you know already better, better than I do, I'm sure. So with that, you know, let's talk a little bit about, again, you know, some of the things that are so important about going through a founder-led sales era. You know, you learn so much. You have an adaptability, a flexibility in terms of the way you negotiate things. You want to be involved in those early conversations to really understand the customer and the market you're serving. Of course, you want to understand the pain points clearly. You also understand, you know, the curve of adoption, the curve of growth and the activity that, that can often give you fantastic insights into what the right KPIs are to track. And it also gives you fantastic insights into, you know, what the right pricing model is, for instance, you know, whether or not you need to move from a kind of basic subscription model or SaaS model to something that might be more usage-based or even kind of performance-based. You know, understanding your end customer at this stage is so important for so many reasons. So that proximity in the founder-led sales area is very important. As I said, you know, I mentioned it already, but having that passion, being visionary in what you're trying to build and having those initial champions, those kind of initial marquee customers is one of the things that founders do best. And so, you know, not all founders, again, you know, some of you might be rolling your eyes and thinking, God, I can't think of anything worse than having to run through the sales process. But, you know, no one is going to believe as much in what you're doing as you are. So you are your best, you know, your best salesperson initially. And finally, you know, no one's thought about the product for as many hours and as many days as you have. And so, you know, again, you have refined your narrative and messaging. You've understood why you've done things in a certain way and not others. And again, being able to communicate that very clearly at the early stage, again, to kind of build that depth of knowledge about your end user and to effectively sell as the product iterates is super important. So, you know, just to emphasize that, because sometimes there can be a kind of, I suppose, almost kind of somewhat negative messaging around founder-led sales, but it really is such an important and good use of time early, very early in the process. So, you know, again, something that I've seen many of the best founders I work with who might also not necessarily have liked sales or wanted to do it really initially, then over time refine their abilities on the sales front and learn, you know, very quickly are able to kind of learn an unbelievable amount from being involved in that process. So that being said, you know, we've talked about needing to, needing to scale this and scale yourself, and you need to scale yourself across functions. But, you know, more often than not, sales and go-to-market is really the limiting factor for growth. And so how you scale your sales team is, is the single biggest kind of local optimization problem you'll find from a functional perspective. Very often. And so, so what does that mean? How do you do it? What do you look for? And where do you start? And I think often the conversation starts with, okay, so usually as you kind of go from, you've done your Series A, you've got a good sense of the customer, it's okay, what do I look for in the people I need to hire? You know, what makes great salespeople? And I think we generally find that it's It's a combination of the things that are listed here that frankly, you know, you'd have in common with, with, with many people. Hopefully you want in your organization, but it's the top salespeople are worth their weight in gold and they have this kind of curiosity about them, this hunger to learn that are very tightly, tightly correlated to outperformance in sales. And I think particularly the ambition and the risk-taking, the, you know, I've described it often as kind of this hunger to win, is obviously critical in a salesperson. And, you know, anecdotally, one of the things that I've seen happen at the Series B stage and even the Series C stage or sooner is, you know, often people tend to want to hire very senior salespeople because having gold-plated CVs often, you know, you might have the perception or the feeling that you don't really know as much about sales as you should do. And so you want to get someone who's been there and done that. And, you know, The thing you really want to test for is people's willingness to get into the weeds and build and be in the field, because often when you hire very senior people at Series B, then they will have made some money. You know, they might not be as ready to kind of get back into rolling their sleeves up and really driving growth in the field as you think. And so what I actually have often seen work quite well is instead of going for the kind of CRO-type profile immediately, is you start with kind of VP sales, next level down, maybe someone who's a bit younger but has all that ambition, their career ahead of them, they've got enough experience under their belt that they can kind of run at things and you don't need to handhold. But, you know, they, they have that hunger about really still building their career and they want to, they really want to get into the weeds of things. And so that's just a note on, you know, what you should be really solving on ambition and obviously stage and career and life can often be not always, but can often be a proxy for likely levels of ambition. So it's just something to think about there. And then of course, intelligence, resilience, and, you know, but I will end on kind of the mission alignment pieces is absolutely critical, you know, and it's not just with the sales function, but as you think about scaling your organization generally, you know, every person in from series, you know, beyond the existing team, the founding team, every person in can really make or break your organization, particularly when they're external facing, particularly if you're whale hunting as an example, you know, you're going off to concentrated markets, you know, that person is going to be your representative on the market. And so it's absolutely critical they are fully mission aligned with what you're trying to do. And I don't mean mission alignment in terms of, you know, kind of, I mean, really understand your end vision, what you're trying to achieve and have the judgment to represent you in the market. So that mission alignment piece is super important and we'll talk a little bit about how you test for that. But you, in your mind's eye, therefore have had to, you know, you need to be very clear on what that is and be able to communicate that effectively to anyone coming in and test for it as part of your interviewing and your onboarding. So make sure that people are really very clear on the parameters of your company. So, you know, what's interesting now, of course, in this market, and maybe that would have been a better answer to the question about what I've seen, but in terms of, you know, the importance of or the focus of founders we're working with and what we're seeing in the market around most important roles people are hiring for, I mean, logically it would make sense that the most important roles now in a tough market are sales leaders. And so competition for good sales leaders has has really increased. I think, you know, in a rising market, the expression— what's the expression here— all boats rise with the tide. It's quite hard to— it's been harder to tell the difference between— it can be hard to tell the difference between good salespeople and perhaps, you know, average salespeople in a market in which the selling has been somewhat easier because, you know, from a macro perspective, things were up and to the right. Obviously, in an environment in which that's not the case, you see quite clearly greater dispersion in sales performance. And so, you know, I've worked with a lot of founders now who taking a very hard look at sales performance and really are able to identify kind of outperformers. That also means that, you know, competition is fierce for top talent, and we'll talk a little bit more about that. You know, the other thing to really focus on, which I think is kind of the flip side of, you know, revenue growth, of course, is you don't want the bottom to fall out of your customer base. And so while it's good and right to focus on, you know, hiring great salespeople to really drive kind of net new, revenue growth, you really also need to think about how you drive customer success, customer retention, and how you incentivize sales reps to really make that a key priority for them. And as an example, you know, let's imagine a world in which you've just hired a salesperson and you as an AE or sales rep and they've gone out to and they've closed a new contract and you're just incentivizing them on net new ACV. Well, of course, you know, they might be over-indexing on driving initial ACV higher than is strictly necessary, which might itself lead to kind of lower retention over time, rather than, for instance, duly incentivizing them on both net new and renewals. So what I've seen some founders do is look at, you know, look at the way they structure compensation for sales reps such that, you know, 80% is incentivization based on net new customer ACVs and the remainder on renewals. But, you know, again, just something to always be wary of, particularly as you start to really scale and ramp your sales team up, is, you know, making sure that the bottom doesn't fall out, so to speak. That's kind of a— that's an English way of putting it. But, you know, really driving retention and customer success and expansion, of course. So, you know, all this to say that, you know, you can't really replicate— truly replicate founder-led sales, but nor would you want to, because it's very important at some point for founders to recognize that you really need to scale. Scale the organization and scale yourself such that you're able to move into kind of a more strategic function and not necessarily be in the weeds of every, every part of the funnel. And so, you know, a lot of the work that you need to do obviously is around the key hiring, but it's also about understanding where you understand your strengths to be in the sales process and whether or not you're better at perhaps the initial conversations or the closing itself. Often it's the closing. But, you know, related to that, therefore, you also really need to set up the leading indicators for what success needs to look like for your new sales reps, you know, what are the north stars? To the point I was just making around pricing and kind of compensation structure, you, you need to put a lot of thought into, uh, you know, how you structure that. I've seen a lot of, um, you know, what often happens, and I've seen a lot of this, is that, you know, initial mistakes in kind of compensation structure set you up for, you know, initial very rapid growth in the kind of 12 to 18 months, and then, you know, unfortunately, just that you don't see the expansion or the retention that you, you want. So really be thoughtful about that, um, very, very important. And, you know, And last point, just to reiterate here, you know, really focus on building your company mission and culture. Have a very clear idea of what your guardrails are. And I always describe it as kind of wide boulevards, but kind of high guardrails in sales. Like, you know, you need to have a— people, of course, need to be flexible and responsive in the way they have conversations and the way they engage. But, you know, set very clear guardrails based on your mission and kind of culture that really provide a kind of appropriate, an appropriate level of visibility for new salespeople into what they can and can't do. But that does require some upfront work on your side. So with that, you know, as I said, I wanted to kind of primarily make this, primarily make this conversational. But, you know, that was a very rapid whip through some of the kind of hot topics. And, you know, I'd love to unpack some of these with you. So by all means, feel free to kind of send questions my way, and hopefully we'll have a good conversation.

Great. Thank you so much, Laura. If you want to stop sharing your screen, we're just getting some folks queued up for questions. Nancy, would you like to come off mute? You have a great question about some marketing aspects of the conversation. If you want to come off mute and ask, or I can ask Laura. Yeah, no, I would be happy to.

Go ahead, Nancy.

Thank you. So often startups go from founder-led sales to hiring a number of salespeople to start building a— without building a robust marketing function to support bringing on board salespeople. The result is marketing generates X leads per month, which is insufficient to support Y number of sales reps. Of course, the expectation of a startup is always sales has to do some hunting themselves, but the reality is there's always a gap, right, between what marketing is able to generate and given the resources that we can fund marketing to do, and there's a gap between what they're able to produce and what sales is able to hunt down themselves. Given this is a reality, how have you seen startups, successful startups, overcome this conundrum?

Yeah, I mean, look, it's such a good question. And this tension between marketing and generating and farming leads with sales is one that you see, you know, time and time again. And the truth of it is there's no right answer, but I can tell you what the wrong answers are. And I can tell you where I've seen mistakes mistakes made, quite understandably sometimes. But the main thing is in having these functions too disconnected and reporting into different people and a lack of strategic alignment internally about what the kind of right north stars are in every part of the funnel. And so, you know, one, one type, you know, to give you an example of that, I've seen situations where, you know, you'll have a CMO, CRO, they both get hired at the same time, or VP Marketing, VP Sales both get hired at the same time. Both reporting to the founder, but, you know, no work has been done upfront to agree what the north stars are for marketing and how those correlate to sales. And so what happens is, you know, sales, VP sales kind of heads out into the field or starts to farm whatever inbound they have, and there's just a complete disconnect. And so, you know, that closing that communication gap and doing the strategic work upfront and understanding, you know, respective KPIs such that they are aligned and kind of coterminous is absolutely crucial. I think also then leveraging systems such that you have— and look, you know, you can only spend so much, but having shared systems and better kind of line of sight on pipeline and revenue operations is super important such that, you know, your marketing has kind of as close of a feedback loop as possible to sales and vice versa. But, you know, honestly, I see like 90% of the issues at Series B, Series C is because of these kind of dual reporting lines and working in parallel and not having the kind of strategic alignment. Agreement on what the right north stars are for both function and how these interact with each other.

Thank you. Laura, when you're talking about the first hires and the first sales hires after moving from founder-led sales, are you also looking at a marketing hire simultaneously?

Yeah, I mean, look, again, it depends on the industry you're in. You know, the reality is that if you are, for instance, in healthcare, you know, we obviously I mentioned company earlier, but you know, for there, a lot of it is going to be events-led, direct sales-led, you know, you have a small number of whales. So a lot of it also depends on the structure of the end market. Obviously, if it's more fragmented for selling into SMEs, then, you know, I think both functions are equally important early, marketing more so arguably. But it does depend on the structure of the end market. And therefore, you know, when you— that's again why I say there's no right answer. There's no one solution, but really understanding the dynamics of the kind of sales motion relative to the marketing motion with regard to your end market and the structure of your end market is very important. Great.

We have another question from Marcel following up about some of that with hiring. Marcel, would you like to come off mute and ask yourself, or I can read it out for you?

Yeah, sure, no problem. Thanks for that. So, um, I, I think at this point where we are from a function perspective as a business, right, is, is we're probably early stage, right? We're at a seed stage. We've taken on some investment from private, uh, private equity as well as some institutional. Um, and we're really focused on getting away from the notion that you said, right, of founder-led sales. Both myself and my CEO are astute professionals in that respect, right? We, we come from a background and a heritage of consulting, very smart and astute in terms of SPIN methodology in terms of how we sell. But to your point, uh, look, it's just not scalable. We're, we're kind of challenging ourselves right now, and I think our, our, our questions around an LDR, SDR position for a SaaS-based enterprise platform, right? So what we do is in relationship to customer service and in terms of analytics around that. In terms of our platform though, and reaching out to leads, I think our, our crux has been around, are we in need of an individual right now at stage, who is an astute sales executive, previous SaaS B2B experience, to help us flush this out and grow? Or are we at a position where an LDR, SDR, right, high, you know, low-level individual can help generate those conversations for us and then we work to convert? I think that's where we're trying to see what path we should take. Is it a dual path? Any thoughts or coaching from you, that would be wonderful.

Sure. Yeah. I mean, and again, it's such a great question because I touched on it, right? There's kind of the seniority question of the first hire is such a critical one and one where I myself have given the wrong advice and we've made mistakes before. So look, I think given the stage at which you're at and you describe as kind of being seed, I think seed stage, if I understood right, I I think the really important thing is that you understand where you're at in the journey in terms of understanding your end customer and your product. And so to the extent to which you feel you are still really getting your arms around product-market fit and need that feedback loop to be as tight as possible still, and no, you know, with you and your co-founder, then, you know, I think it makes sense for you to hire someone who is perhaps more junior and can really help on, you know, top of funnel support through, you know, cold calling or inbound, outbound campaigns, event recruitment, whatever, um, on from an LDR perspective, um, and even perhaps a junior SDR also. But for you to stay in conversations, um, you know, now again, I'm just taking the stage you mentioned, but if you feel, however, that, you know, you have that feedback loop and you, you kind of know what you're doing, or of course you know what you're doing, but, you know, you've got your arms around the, the kind of PMF and, um, you're in already in kind of early monetization and you, you don't have too much customer concentration, you've kind of all the right green shoots, then you can start thinking about perhaps a more senior hire. But at the stage which you're describing, I would lean, without any kind of firsthand knowledge, I would lean towards someone to help you on top of funnel who, you know, obviously has the judgment. But that's where I would lean, if that makes sense.

Okay. And maybe as a quick just follow-up there, in consideration to if we had, let's say we have, you know, we are, we're getting close to, you know, the 7-figure mark in revenue We have 9 enterprise customers. We feel like we have PMF at this point, at least from connecting the dots on what customers are buying now, right? And we've started to, I think, build out heavily an emphasis and focus on our target profile, our, you know, our ICP, right? So our ICP, our sales motions, our sales steps, all of that has kind of been been put together at this point, to you, does that influence or sway your opinion? And I'll pause with that as my final question. Thanks.

Yeah, it, you know, to some extent it does, to some extent it does. But, you know, even then still, I think, I guess put differently, but to ask a question differently, you know, are you ready for a CRO, for instance, or are you ready for a more experienced VP sales kind of SDR, more strategic function, I think again, given the stage which you're at, and congratulations by the way on getting this far, that, that's, that's great to hear. I would still err on the side of taking someone perhaps next level below who is really prepared to get into the field and build versus someone who's in a kind of more strategic function because you've got, you've done a lot of the strategic work yourself already, and but you've still, you're still learning and So you still kind of want to own that and you don't want someone who's going to come in and doesn't want to be in the field, you know, isn't prepared to kind of run at things, kind of run through a wall, so to speak, on the sales front because they have, you know, they've kind of got some of their career behind them. So I would still— usually my advice at this stage would be to still go for— start with kind of VP sales or kind of local GMs or however your— whatever your go-to-market motion looks like. Start with kind of next rung below and start to build the organization up such that you still have kind of control over the function and really keeping that feedback loop tight. But, you know, I'm sure other people might have a, a different view, but I mean, generally speaking, that's, that's what I've seen work best.

Yeah, Laura, we're getting some follow-up questions from, on that from LinkedIn and other places where people are viewing. So, um, one person's asking, um, with a Series A startup, is there ever a time where you do see a need for a CRO and not just a VP of Sales? Like, can you think any situation where that would maybe be the case that you'd recommend differently?

Yeah, I think where you might, I mean, very, very rarely do you see Series A with, you know, very early stage companies with a fully fledged CRO. It's not completely uncommon, but you know, where you see it more often is when you're dealing with a kind of a very fragmented large number of prospects. Aspects that do need some systematization early, that do need kind of, that have a lot of data available about that, where there is kind of perhaps pricing complexity, where, but I wouldn't usually describe that as kind of a, it's very rare to see a CRO role necessarily, but it does mean that you need more sophistication early, and you don't have the time or the space to be as, you know, to have the kind of founder-led sales because it simply doesn't scale. You've got to talk to too many people over too big of a market to be able to scale that at all, right? And so particularly at SMB stage, if you're selling into SMEs, kind of SMBs, and kind of more fragmented markets, then you would see the need for more sophistication there. But again, it really depends on the sales motion. It depends on, you know, the end market. But it is unusual to have a very senior sales hire early, largely because of what we were just discussing about kind of founder-led sales and the importance of that. Absolutely.

Another question from the group, do your portfolio companies hire fractional execs or fractional salespeople? Have you seen to success with this?

Yeah, I, you know, it's— that's a great question because particularly in this market where people have to be more cost-conscious and, you know, you don't necessarily want to make a— add another FTE, and for many reasons, I think that there's been a kind of hot topic for the last couple of years. Look, there are some great fractional execs out there, and I think where I see fractional execs operating more is around around kind of sales talent acquisition. So people taking project-based work to really help kind of sales team expansions. So the kind of TA function I think can work quite well. I think kind of fractional CROs, particularly as you're scaling operations quickly, or fractional sales, like direct salespeople, is, is really tough. I've not seen examples of that working terribly well, to be honest. It's not something I see a lot of. Fractional CMOs I see more of, you know. I think that can be very effective, particularly Again, depends of course on the type of person, of course, and the profile, but that I've seen some, you know, very good kind of project-based work with fractional CMOs where, you know, a lot of the exercise kind of when you scale from Series A to Series B is about putting your kind of KPIs in place, your systems in place, you know, setting your kind of marketing strategy up front and where the founder also still wants to be involved and work together with the fractional CMO but doesn't necessarily need a kind of full-time CMO. So those kinds of roles can work. That can work quite well. I've seen that work. Yeah.

Great. We're also getting a couple of questions from LinkedIn about which tools your portfolio companies are using for lead generation and sales processing, and if any are focusing on AI.

It's a great— it's a very good question. Look, I think we're seeing lots more around, you know, lots more integration. I'd say where, you know, some of the kind of lowest-hanging fruits where we're seeing a lot of integrations and new products around GenAI in in the kind of the sales process or in the kind of customer relationships is actually around kind of customer success. You know, but we're seeing it across the full stack. I think, you know, most of the tools that you guys are familiar with, the kind of big platforms are all finding ways to better integrate those tools. And I think that's part of the problem for startups going after this space specifically. It's kind of a bit of a red, it can feel like a bit of a red ocean. But yeah, I mean, we're seeing lots there. We've seen lots of— not too many to call out, to be honest.

Amazing. And Laura, we have another Laura who has a question for you.

Hi, this is Laura Ferguson. Thank you so much for this discussion. I, I'm curious, I'm more at the beginning journey of this particular startup I'm working on. What is the tooling that you have used or recommend for back office And what's been to support the sales that you're looking at as you're getting to Series B? And what has worked for you? Like, so what is the history of tooling? Like, you know, QuickBooks is often recommended, but beyond that, what really makes and empowers the sales team for the teams that you work with? That's my question. Thank you. I think, I mean, I think I'm gonna try and answer the question in a kind of more of a first principles way and then maybe talk about a few of the tools. I think that you mentioned QuickBooks, you mentioned, you know, I'm sure you'll be familiar with some of the classics here, but the most important thing is understanding the level of visibility that you need based on, you know, the sales process that you have and the complexity of the sales process. And what that means for me is, you know, particularly let's say product, you know, PLG motion, product-led growth, where, you know, you're kind of perhaps you're a prosumer business and so you've got high volume kind of new customer acquisition. A lot of it may— all of it ideally is kind of entirely product-led, but you've got kind of lots of inbound and you now have to find a way to kind of systematize your visibility, the way you manage pipeline, how you manage expansion and all that good stuff. And there very quickly, the level of complexity requires you to use kind of better, better tooling. I mean, the other thing is, you know, when you think about your expansion strategy, you know, do you go deep within a given market? Do you need— do you you need to go to kind of build density in multiple different markets, you know, that again, level of complexity in the end market that you're surfacing does require kind of next level up in terms of tooling. The main thing though that I really kind of try to focus on though with founders I work with is abstracting away from the tooling. Do you understand, really do you understand what the key drivers of your revenue growth are in the funnel? Like, do you really understand like your conversion metrics? Do you fully understood what you should be tracking? And I think before you put any tools in place, what is often a red flag from Series A to Series B is that the founder, you know, great founders, by the way, great founders, most of us do this, you know, haven't actually fully understood what is really driving the business. And so before you get into the tooling, I think having the kind of first principles understanding of what the kind of really underlying dynamics are and kind of in your ICP and kind of key purchasing criteria and things you ought to be tracking in the pipeline is more critical, if that makes sense.

Great, thank you, Laura. Another question referencing some points from your, your slide deck, but given the highly competitive market that we're seeing for the sales leaders, what are some of the other incentives and comp structures that you've been seeing that work really well for folks to set themselves apart? Apart?

I'm sorry, you just broke up there. Can I just have it again?

Yeah, the— given the highly competitive market for sales leaders that you referenced, what are some of the other incentives and comp structures you've seen work really well for our founders and execs to set themselves apart from the competition?

Yeah, I think, look, a lot of it is a kind of equity compensation, right? And, um, and being very thoughtful about how you structure equity compensation, um, for your sales leaders. And I think, you know, there's also— this also touches on why you don't necessarily want a very senior CRO, a very senior salesperson up front, right, is that you kind of want to make sure that you have an opportunity to figure out if it's the right fit before you give too much away on the equity front. I mean, that's true of any function, but I think particularly because it's often hard, it's often a very difficult hire, not always, but can be, often is a very difficult hire. It's kind of lower risk and low stake to start with kind of slightly more junior level also. And so, but I think really crafting an equity compensation, understanding and communicating to your employees and kind of new sales leaders what the value of that equity is and how you think about it separate to the, you know, your annual compensation plan is very important. And I think, you know, frankly, in this market, the things that I'm seeing the best founders be able to convert on is more kind of mission alignment and equity packages. Package, then obviously, you know, people want to know they're going to get paid based on performance. But, you know, these things have to come together. So I think that being thoughtful about that is very important. Great.

Garrett asks, where do you advise your portfolio companies to pull from for best practice pitch decks, sales best practices, etc.?

Oh, that's a good question. I mean, not to be self-serving, but, you know, We've got a— we've hired a great guy internally ourselves who was at Snowflake before. We produce a lot of content around what great sales pitches look like, and we can maybe share the link with you to— so you guys can see some of that content. But we've got a lot of content around structuring sales teams, structuring decks, you know, sales material, all that good stuff, which hopefully would be useful to some of you.

Yeah, that would be great. Laura, is that on the Atomico blog?

Yep, it should be. Yeah.

Okay, amazing. Well, thank you so much, Laura. We know we want to give you plenty of time since it's your evening there, and we thank you so much for joining us and sharing so many incredible insights. As always, thank you to the audience for all your amazing questions and for being so interactive with Laura. Laura, you can— and people can find you on LinkedIn and on and check out that Atomical blog, which we'll be happy to drop into the chat here. Or Theo, if you're able to drop in the chat, that would be great. As always, this recording and the slides will be available on the SaaStr YouTube page as well as SlideShare, and we will be back next week for another version of Workshop Wednesday. So thanks again so much, Laura, for joining. We really appreciate it.

You guys are so welcome. Thanks so much for the questions, and, you know, hit me up on LinkedIn. Be great to continue the conversation.

Yeah, thanks everyone.

Okay, bye.