Kevin Spain

I’ve seen many entrepreneurs raise follow-on rounds during my time in the venture world. And while I’ve seen many different fundraising strategies used, there’s one that I’ve seen reliably produce good results time and time again. Here it is:

1. Assemble a list of all potential new investors. Leverage your board and all of your existing investors to help ensure you have the most complete list possible. Don’t forget about potential strategic investors.
2. Perform some basic research on the firms on this list. Are any investors in competitive companies? Remove them. Do any focus on stages or geographies that make them a poor fit? Remove them, too. The goal is to end up with a list of firms that you wouldn’t mind telling about your company — and who won’t have any obvious objections to taking an initial meeting.
3. Stack rank the remaining firms based on whatever criteria you feel appropriate. Are you looking for a top-tier brand? Seeking a firm that is hands-on? In need of a team that really understands your space or can address a gap on your board? Score the firms on the list in each of the areas that matter to you, add up the points for each firm, and arrive at a total score for each investor. Now sort the list in decending order by total score.
4. Add individual partner names to the list. Are there specific partners in a firm who would cause you to increase the firm’s score? If so, include those folks’ names on the list and adjust the score appropriately. If not, work your network to determine who the best partner would be for your company.
5. Start fundraising by reaching out to the top five firms on your list. Use your network to ensure you receive warm introductions to the right partners. Contact them simultaneously and aim to have inintial meetings with them in the same week. Get feedback from them as quickly as possible.
6. The minute you receive a turndown, reach out to the next firm on your list. Repeat this whenever an investor drops out of the process. Aim to keep five investors in your process at all times. More than this is hard to manage. Fewer than this is likely to result in no term sheets or too few term sheets to enable a competitive process.
7. One final hack. If you use this methodology, you may find yourself at different stages with different investors at any point in time. You will often be asked by investors where you are in your fundraising process. Be careful what you share. If investors feel they are too far ahead of others, they may stall. If they feel too far behind others, they may feel they won’t be able to catch up in time to be considred. Manage your communications on this topic carefuly.

Do you have any other fundraising tips? Feel free to share them in the comments.

Acceleprise, the first incubator exclusively focused on enterprise-centric startups, formally launched today.

I’m excited to be one of the mentors in Acceleprise’s inaugural class. I’m pretty humbled by the group of folks I’ll be working with to assist the first group of companies that move through the Acceleprise program. My fellow mentors include luminaries such as Scott Case, CEO of Startup America, Katharine Weymouth, CEO of Washington Post, and Maria Thomas, former CEO of Etsy.

The great group of people that have come together to support Acceleprise is a testament to the growing opportunity in business technology. At Emergence, we’ve been focused on B2B venture investing for nearly a decade. So, we’ve been believers in this area for some time. But, as more and more entrepreneurs become interested in building business-focused tech, there’s a need for more smart people to support them. I’m optimistic that Acceleprise will be an important contributor to the success of the growing B2B startup ecosystem.

Congratulations to Sean, Collin, and Allen for all their hard work getting Acceleprise off the ground. I’m looking forward to working with you!

I’ve written before about how many successful CEOs I’ve worked with have deployed a vision and goal-setting process in their companies. V2MOM is one framework for doing this, but there are others.

One of the key aspects of successful goal-setting knowing when you’ve hit your objectives. Metrics are therefore an important part of this process.

John Doerr has said that a team should only focus on three key metrics at a time. I’m not sure that limiting a company to three metrics is necessary, but the idea of being deliberate about the metrics you choose is spot-on.

There are a few things I’ve seen successful companies do when selecting and using metrics to track their progress:

1. Choose metrics that help drive better short-term decisions. What are the big levers that will impact your ability to grow your business in the next 90 days? Hiring? Conversion rate? Churn rate? These are often more important in the early stages of a company’s life than items from the P&L or balance sheet — and they are usually more actionable on a daily/weekly basis.
2. Measure continuously, report publicly. Many companies in our portfolio have almost every key metric they’d want to track captured in a system somewhere in near real time. Use this data to your advantage. New analytics solutions such as those from RJMetrics allow one to report performance against key metrics on dashboards that can be generated and shared automatically. There’s nothing like the buzz of an office that is seeing how it’s doing minute by minute on the wall in front of them.
3. Have metrics that work for the company, not the other way around. Don’t be afraid to modify metrics as your business evolves. I suggest taking an approach to metrics that’s similar to the customer development process advocated in the Lean Startup methodology. Have an initial, well-informed, opinion on the right metrics for you. Then try them on for size. Are they making the business better? Are they motivating your team as you had expected? If not, adjust.
4. Have a single owner for each metric. No owner = no action. You may have to adjust your initial take on metrics for this to work for you and your team. This can sometimes seem to be difficult, but its possible and it makes a world of difference.

Do you have any other thoughts on the right way to set or use metrics to run a business?

It’s been said that the three key jobs of a startup CEO are setting strategy, fundraising, and recruiting. All are important, but I believe that recruiting is really job #1 for CEOs.

There are two reasons for this. First, the obvious one. If a CEO doesn’t have a stellar team underneath him or her, he/she will end up leading functional areas of the business day-to-day. This leads to way too little time spent on strategy and fundraising.

The second reason, though, is probably the more important one. If you want to build a team of A players, you have to always be in the market for talent. CEOs often begin recruiting for an exec once there’s a near-term need. This typically limits them to candidates who are in the market at the time. Good candidates can turn up this way, but they may not be the best. To see the true “index” of candidates for a role, you have to talk to a lot of people. This can’t happen when you decide you need to fill a role in the next few months.

Further, speaking with a lot of people over an extended period of time has two nice side benefits. First, you become better educated about the type of skillset you really want in a role. And, second, you have a greater opportunity to sell the best candidates. The best people often require a long period of relationship-building before they will consider making a move.

I suggest that CEOs start taking meetings with potential candidates for a role 12 to 18 months before it needs to be filled. For an early-stage company, with several key open roles that will need to be filled in the near term, this means a CEO needs to spend most of their time recruiting.

This article originally appeared in Forbes.

The rapid rise of the iPhone, iPad and other mobile devices has fueled a mad rush of venture funding into consumer-facing mobile companies. During the 2011 first half, according to Rutberg & Co., venture capitalists invested $3 billion into 358 mobile companies – with $960 million going to the “media and applications” sector, defined as social networks, mobile games, mobile advertising, app platforms, news aggregation, photo sharing and group messaging.

VC investment in enterprise mobile companies has been more tepid. According to Rutberg, VCs invested just $254 million into “enterprise IT” mobile companies over the same span.

As global organizations race to transition legacy systems to the cloud – and enable mobile workers to access applications and services wherever they are, from any device – the mobile enterprise sector clearly presents an untapped opportunity for venture investors. But it’s not enough to simply shut off the funding tap to consumer mobile companies and start funding enterprise mobile startups en masse. Not all mobile enterprise companies are created equal.

The startups with the greatest potential to generate outsized returns are those creating “mobile-first enterprise applications” – those that leverage the unique capabilities of mobile devices to enable the creation of new categories of enterprise applications. These applications are very different from mobile-enabled versions of traditional enterprise software such as Salesforce.com and Workday. True “mobile-first enterprise applications” are built for mobile platforms initially or exclusively and enable a worker or business to do things that simply were not possible before the proliferation of advanced connected devices.

Some examples of mobile-first enterprise applications include Doximity, a mobile app that enables physicians to collaborate and communicate more effectively in which my firm is invested; Square, which allows many small businesses to accept credit cards for the first time; and Gigwalk, an app that enables businesses to turn smartphone users into an “instant mobile workforce”. These companies are among the first to truly leverage the power of mobile to create unique business-focused value propositions.

Much of the mad rush to sink millions into consumer mobile startups parallels the dot-com boom. The late ’90s funding craze was focused almost entirely on consumer Internet companies – and the painful bust that followed was a consequence of over-investment into consumer startups and under-investment into enterprise Internet companies. What rose from the ashes of the dot-com bust, however, was Web-enabled services and cloud computing – a wealth of innovative enterprise software companies applying Internet technologies to business processes.

Investment in the mobile sector is evolving in much the same way, but at a faster rate. Right now, mobile-first enterprise companies are vastly underfunded, while those consumer mobile start ups are vastly over-funded. Only a handful of these consumer-focused start ups will gain the critical mass needed to succeed; after all, there are only so many mobile games, social networks and apps consumers are willing to buy.

However, just like in the dot-com bust, the demise of many of today’s amply-funded consumer mobile upstarts will eventually benefit the mobile enterprise sector. Popular consumer mobile technologies will eventually become core components of business-driven apps – bringing the mobile craze into the office in much the same way the Internet fully arrived at work only after the dot-com bubble burst.