Early-stage entrepreneurs often have a large array of resources at their disposal preparing them to start their business, test their ideas, and find their first customers. Incubators and accelerators do a great job guiding and supporting founders at this stage. But what comes next? Between seed and Series A, companies find themselves with many challenges these support programs and networks can’t address. According to a recent study by Dealroom, 70-80% of Seed stage (funded) startups never reach their Series A.
For this reason, Endeavor offices around the world have launched pre-Endeavor programs called ScaleUp, with Endeavor Brazil starting the first in 2014. Our office launched its first last year in Birmingham and ScaleUp ATL this year. Over the past 2 years, ScaleUp has been an influential and transformative program for Birmingham and Atlanta’s most promising early stage founders. We are excited to share our lessons learned after two years and three cohorts of experience.
“ScaleUp is an impactful program that will help your company grow and scale in a more efficient way, while also helping strengthen your local network of entrepreneur connections.”
-Matt Pierce, Co-founder & CEO of Immediate
Why Is The Seed to Series A Stage So Hard?
Participants in the ScaleUp program normally generate somewhere between $500K to $2M in revenue, with triple-digit growth rates. This sounds promising, with real product-market-fit in sight. Companies at this stage are increasing their team size, understanding and building their culture for the future, and putting the initial pieces of their go to market strategy in place. They are also iterating on their product based on early customer feedback and learning to work with and leverage their first professional investors. With all these moving parts, relationships to manage and decisions to make, it’s no wonder so many companies stall at this stage. As LinkedIn Chairman and Former CEO Jeff Weiner once said, “One of the most valuable lessons I've learned in business is that managing a hyper-growth company is like launching a rocket - if your trajectory is off by inches at launch, you can be off by miles out in orbit.”
How Does ScaleUp Address Stage Specific Challenges?
Entrepreneur to Entrepreneur Mentorship: After being selected as a ScaleUp company, entrepreneurs have access to a wide breadth of services and programming, all curated for their specific challenges. Founders are matched with mentors within the Endeavor network through the eight-month program. Each founder/founding team will have a founder-to-founder match with a peer entrepreneur who is several stages ahead of them. These mentors are able to provide critical advice to determine the trajectory of the founder’s business and highlight the mistakes they made at their stage. Entrepreneurship is never easy, but having a fellow founder share their “war stories” makes it just a bit easier.
“This is a great opportunity to hear from successful entrepreneurs who have been in your shoes and are, "on the other side." You gain access to useful information and resources without a huge time commitment.”
-Tiffany Whitlow, Cofounder & CDO of Acclinate
Curated Expert Mentors: Founders are also connected with industry experts and issue-specific mentors. During their monthly meetings with Endeavor staff, founders share their most pressing issues. Endeavor staff then find highly relevant mentors to assist with the founder’s challenges. These mentor connections assist the founders with their most pressing issues, provide critical advice and feedback and introduce effective business-building solutions. In addition, Endeavor schedules monthly “focus and fuel” forums with successful founders and functional experts to cover broadly relevant topics such as strategic planning, building organizational health, and defining metrics that matter. Founders have said that 40 minutes with an Endeavor mentor often saves them 40 hours.
“Imagine 5 years of networking, reading, coaching sessions, and feedback opportunities from the best in your industry, and having that condensed and handed to you over the course of 6 months from a group of folks that truly want to see you succeed. That is Endeavor ScaleUp. ScaleUp was by far one of the most valuable experiences on my founder journey. The courses, mentorship sessions, coaching, and feedback forums helped me to gain clarity and perspective about my business that I'm not sure I could have gotten elsewhere. I am super grateful for this experience. It was a real game-changer.”
-Tracey Pickett, Founder & CEO of Hairbrella
Capital Connections: Founders who are looking to raise capital have an opportunity to utilize the Endeavor network as well. The Endeavor team will facilitate several connections between founders and investors. During these connections, founders receive candid pitch evaluation, business advice, and in some cases, actual investment opportunities. In one particular event, a “Behind the VC”, one ScaleUp company was chosen to pitch in front of two VCs. The founder received live feedback and in the end, one of the VCs expressed interest in investing in the founder.
“Startup entrepreneurs are racing against time to achieve escape velocity. Endeavor gets that. Its ScaleUp program helps entrepreneurs cover more ground, faster and better.”
-Ortez Gude, Founder & CEO of Citiri
Creating Community: ScaleUp also provides a platform for community and camaraderie between the founders. Through the program, founders meet monthly for workshops and group check-ins. ScaleUp founders have also met outside the program to mentor and support each other. Similar to the Endeavor network, ScaleUp founders operate within a network of trust. Information shared within the ScaleUp program stays within the ScaleUp program so founders build trust that allows them to share and solve their business’s most intimate problems.
“ScaleUp is the fastest way to avoid mistakes that others have made, saving you time, money, and heartache. Because of the access to a robust advisory group, I learned about the icebergs ahead before I had to go through them myself.”
-Delphine Carter, Founder & CEO of Boulo Solutions
Coaching to Fuel Personal Growth: Founders also receive executive coaching as part of the program. Elise Mitchell, a successful entrepreneur turned executive coach who serves on Endeavor NW Arkansas’ Board, met with each group of founders. Each founder was offered 3 coaching sessions, a Hogan 360 review, and a copy of Mitchell’s book. Founders labeled their time with Mitchell “a must” and “a non-negotiable aspect of the program.” For founders, they were able to strengthen their bond with their Cofounders, have candid conversations with their C-suite, and take a step back from the business to evaluate leadership ability.
“Especially as first-time founders I don't think Linq and us as the co-founders would be where we are without this program and the introductions it was able to make for us.”
-Patrick Sullivan, Cofounder and CTO of Linq
Assessing Growth Trajectory: The program’s capstone session, the Endeavor Readiness Panel, helps founders hold a mirror to themselves and their business. ScaleUp entrepreneurs interview with up to three pairs of mentors in a panel-style interview. Each mentor assesses the businesses’ current growth trajectory, the founder’s ability to articulate their vision, and their plan to implement it. Several ScaleUp founders mentioned the program highlighted major issues as well as the current trajectory of the business - things that would have been missed without intentional reflection. One company believed they were on the high-growth, VC track, but the Readiness Panel highlighted to them that their business was on an Early Acquisition path. This important insight helped the founders optimize their decisions to match the reality of their business, the market and their own personal goals.
Lessons Learned
Over the past two years, we’ve learned many things that are unique to seed to series A stage, high-growth startups. First, each founder and company’s needs are unique - so frameworks and generic programming is generally ineffective for entrepreneurs at this stage. Thankfully Endeavor’s model is already set up for curated support, so the ScaleUp program is a natural extension of the work we already do with full Endeavor Entrepreneurs. Second, just because a ScaleUp company is high-growth by definition doesn’t mean it’s on a venture-backed path. This is the right time for founders to understand their trajectory very clearly before they pursue venture capital or make decisions that don’t match the style of business they are building. Third, the importance of community amongst similar stage founders cannot be overstated, especially in such uncertain times. Having a trusted space to discuss your biggest challenges, have others listen and get useful ideas from peers propels entrepreneurs, their companies and their ecosystem forward. Lastly, executive coaching was a critical component to the success of the program the past two years and will be into the future. A professional sounding board that can dig into the messy leadership issues each founder faces increases their confidence and accelerates their ability to make clear, thoughtful decisions in real time.
If you’ve worked with seed to series-A stage startups, we’d love to hear what you’ve learned in the comments below!