by Jenny Vance, President of Leadjen
Early stage companies often face a Catch-22 situation when trying to raise capital. Venture capital firms want to see a revenue stream before committing to funds, but companies need funding to launch products and implement marketing programs.
What’s an entrepreneur to do?
One way to quickly build a sales pipeline that will be attractive to investors is through a targeted lead generation program. Such efforts can be very effective in providing the proof of concept that investors seek before committing funds.
At the same time, an outbound prospecting program can provide business owners and investors keen insight into the market and industry. For example, lead generation firms can compare campaign results to market benchmark data to provide insights into the potential future success of the business.
Scale Computing, which provides enterprise-class data storage solutions for small and medium-sized companies, needed to build a sales pipeline in order to raise the capital it needed for a market launch.
Starting from a baseline of zero sales, we worked with the company to build its sales pipeline to $2 million in just a year. This effort positioned Scale Computing for a $5 million Series A funding round. Within the next year, Scale Computing had two additional funding rounds valued at a total of $26 million and is on track to triple its staff by 2013. The company was twice recognized by Forbes as a Most Promising Company.
When done properly, lead generation programs can benefit young companies in other ways.
Investors buy into a company’s market potential as well as into the management team’s expertise. Outbound prospecting campaigns can provide strategic insight that business owners can take to funding discussions. Now, entrepreneurs come to the table with real market intelligence and not guesses.
Lead generation companies also can be a valuable resource during funding discussions. By evaluating benchmark and calling data, lead generation partners can serve as market analysts for investors trying to understand how a company compares to others in the industry.
We’ve even been tapped by investors to conduct lead generation campaigns for companies they are considering funding. The idea is that it’s far less costly to fund a campaign for $20,000-$30,000 as proof of concept than to make a multimillion dollar investment based on hopes and assumptions.
Lead generation programs also can support future funding rounds as well as maintain valuation and goal attainment prior to an initial public offering.
Jenny Vance is president of LeadJen, a B2B lead generation company that uses unparalleled data and insight to drive prospect interactions that convert to sales. Twice recognized by the Sales Lead Management Association as one of the 50 Most Influential People in sales lead management, Jenny can be reached at firstname.lastname@example.org or on Twitter @jennyvancyindy.
Name: Jenny Vance