Five Tips for Extending Runway Using Working Capital

by Whitney Sales

If you’re a founder or sales leader you’ve inevitably heard about and felt the impact of high interest rates have tightened access to capital. The number of startups that are able to raise and valuations have continued to decrease while the targets for traction and growth in order to raise has increased. CVC has decreased 73%. Regulations have made M&A harder, volume has decreased, but prices have increased. Layer on PE turning away from tech. This isn’t to say investments aren’t being made, but it’s definitely gotten harder. 

I’ve heard some investors advise to do (another round of) layoffs, but how can you do that when you’re likely already behind on product delivery and short staffed. Yes, you can implement automation and AI to increase capacity and productivity per head, but most likely, the incremental gains made by AI and automation will not buy you the runway extension you need to make it to profitability or escalated revenue growth required to make it to your next round.

So, what can you do as a founder watching your runway tick down each month and need to make your dollars go further? Here are 5 ideas to consider to extend your runway through working capital:

Sales Training, Enablement & Positioning

  • Training: You might be thinking I don’t have the time. You don’t have the time not to. Think about it this way, if you were able to get 20% more qualified leads from your SDRs what would that translate to in revenue? What about if you were able to increase conversion rates by just 10%? Or increase your ACV by 15%? What about if you were able to get one extra deal from each AE. Or if you were able to ramp your team in a third or half the time so they’re profitable earlier in onboarding? These are all revenue gains you can make by simply adding a weekly 30 min meeting focused on sales training. This training could be to around beefing up the teams industry knowledge, sharing the lifecycle and use case of a new deal that closed recently, your team sharing what they’re seeing work with one another, practice pitches, etc. 
  • Enablement: Assuming you’re using a tool like or Gong, when was the last time you sat down and listened to a few weeks worth of qualification and sales calls? This is the first thing I do when I start working with a company and let me tell you, you learn a lot very quickly about unspoken objections, subtle disengagement, prospect skepticism, not to mention potential optimizations that could be made in your process.. The other thing you’ll hear is what’s working, where you might have misunderstood what your prospect was trying to say indirectly, knowledge gaps you might be able to fill with quality content, where value sits for various use cases and why deals might be getting stuck or dropping off. You need to clearly identify where problems sit in your sales process to be able to understand why they are happening and iterate on a solve them- 8 out of 10 times you’re not losing a deal because of your product if you have a handful of early customers already. 

    Use this information to:
  • Tighten the definition of your ICP and Buyer Personas –
  • Put together the case studies for your ICP (both companies and personas) to alleviate customer concerns and increase trust in you, your product and your company
  • Revisit your qualification process to make sure you are qualifying for the right things. Are the questions you ask during qualification open ended. See if you can frame them as ‘walk me through’, ‘talk me through’, ‘help me understand’, type of questions to gain more insight into your champion and their company.
  • Identify common questions that indicate a knowledge gap(s) in your industry. What does your customer need to believe or understand in order to value your product? Your company’s answer to these should be captured and posted on a blog or used for thought leadership. These are great opportunities to share your vision for the future so your like-minded buyers can find you.
  • Similarly, identify common questions and concerns about your implementation process that could be documented and templatized to speed up time to value for your customer.
  • Map out your sales process, what happens at each stage and who is involved. See if you can rework your sales process and what you share when to minimize the number of meetings you or your team has with customers. An increase sales velocity to not only reduces your CAC, but also frees up you and your team’s time to close more deals.
  • Ways to tighten your company profiles: where they are headquartered, number of locations, tech stack integrated into their marketing site, strategies the company is implementing to grow outlined in press, their S-1, or most recent earnings call, age of company, web traffic, VCs, open job recs, roles/titles that exist within a company, size of a department, price of their product, news coverage, recent launches, blog posts
  • Ways to tighten your personas: age of buyers, location, tenure at a company, past employer or experience, where they went to school or degree, title+size of company, whether someone has moved up or changed title within a company, associations, whether they have specific social profiles,  last time they logged in to a social profile or posted, key words in their profile, description or title, languages spoken, countries they’ve lived in, online persona, etc.
  • Positioning – The other valuable lesson listening to sales calls teaches you is how to communicate the value your product offers using industry terminology and buyer persona language. If your web traffic isn’t converting you might need rework your tagline, product description or benefits breakdown to use this langage. One of my founder led sales team just 3x’d the leads they generate in a month by changing nothing but the tagline in their website header using the language a customer used to describe their product. 
  • Is your customer asking about compliance or integrations in your sales meeting? Then you probably need to list these on your homepage. Many prospects won’t engage unless it’s clear that you check these boxes. Especially if a technical subject matter expert (SEM) is involved in the buying process. No one wants to waste their time on a sales call for a product that doesn’t meet their basic compliance requirements.
  • Do your prospects lose interest when you talk about implementation? Then you might need to simplify how you describe your process or you might be requiring too much from your buyer. Remember every company is short staffed right now. 

Pricing Model & Payment Terms

Pricing Model – You’ve probably heard sales leaders or enterprise customers say that finance has been tasked with cutting spend by 30% to increase cash balances. The initial steps we saw companies take to cut costs manifested in form of layoffs, cancellation of duplicative or redundant software, and reduction or elimination pre-approved budgets. Then companies re-strategized, reprioritized and decision making authority moved from Director and VP-Levels into the hands of the C-Suite. This change in buying behavior is important to understand for sales process design, but what’s more important to understand is the impact this has had on power dynamics within companies. Though I am seeing decision making moving back into the hands of Sr leadership teams this quarter, most spend I’m seeing today is still high scrutinized by finance and the C-Suite. What this means for you and your sales team trying to sell your product into these companies is that the ROI needs to be clearly understood and calculated AND your pricing model should be attractive to finance. And what do finance teams want whenever possible? Fixed costs that are predictable. How is this a good thing for runway? For products that have proven their value, the desire for fixed costs create opportunities for multi-year contracts and upfront payment. Customers who are making the investment to implement your product and train their team on it want you to stick around as much as you do. Providing you with predictable, contracted revenue, reduced CAC to LTV and more cash upfront. If you currently price your product on usage or pay-as you go, it might be worth considering at how you can transition to annual usage bands for larger customers who need predictable pricing/billing.

Professional Services

Another opportunity for working capital is professional services. As a startup operating under different market conditions, professional services can be very costly to scalability. But under current conditions, when dev teams are stretched thin and its taking longer to push enterprise features, professional service packages delivered by account management teams can fill gaps in product, increase contract value and provide additional cash flow. Just make sure you’re keeping a close eye on your margins when you put these together by being conscientious about your team’s capacity to deliver. When there is inevitably a bug or outage, every customer impacted simultaneously expects white glove service which will drastically impacts your team’s ability to deliver on schedule.

White Glove Implementation and Account Management to Land Expand

  • For those accounts where there’s large expansion opportunity White Glove Implementation and Dedicated Account Management can mean the difference between expansion (and additional revenue) within months vs years. To execute a successful expansion there are a few recommendations I have:
    • Make sure you have strong relationships and are providing value to multiple stakeholders in your account.There is WAY too much turnover right now and you want to make sure your investment in the account doesn’t disappear with an unforseen layoff or leadership change
    • Resource allocation should be clearly defined, outlined and mutually agreed upon. Setting expectations upfront on what success looks like and developing a mutually agreement plan and schedule will ensure you don’t stuck in limbo land trying to deliver value to your customer. 

Customer Sponsored Product Development

  • These revenue opportunities can be harder to win. In addition, as a founder it’s also important that engineering resources are focused on delivering a delightful product experience for the core use cases in your ICP. Product feature prioritization should be done based on revenue and use case unlocks not by sales overselling product capabilities to individual customers to hit quota. That said, if a feature is already on the product roadmap, has been requested by multiple customers and a prospect is willing to pay to move that feature to the top of the development roadmap, there’s no real reason to say no. Take advantage of a customer’s willingness to fund feature development and adjust priorities when it fits within your vision.

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