The Series B Founder’s Guide to Revenue Operations
Scaling a business from Series B to Series C typically means growing revenues from $10m ARR to $30m ARR.
In this second edition of my founder’s guides, I’ll walk you through what lies ahead and provide some suggestions and common challenges to help you on your journey to predictable and scalable revenue growth.
As we can see in this ICONIQ chart, companies that are still following the higher end of the venture track will scale from $10m to $30m ARR in just over six quarters.
Source: ICONIQ
This week I published my video guide for Series B founders to help you understand the tasks in front of you as you scale your Go To Market function from around 70 people, to 125 people in such a short time frame.
You can access the 60 minute video module here:
In this article I’ll pull out the key topics.
Financials of a Series B and Series C business
ICONIQ and Carta provide recent data that shows the typical financials for a business at each stage.
A recently funded Series B business is typically at $10m ARR and top performers are growing at 170%.
By Series C revenues have touched $30m and the company is still growing 135% per year.
Note that at $30m ARR the percentage of ARR from new logos remains steady at 65%. This means we need more customers to sell to, a larger TAM - often this will mean opening your first international offices.
Scaling the Go To Market team
At $10m ARR the Go To Market team typically consists of around 70 people.
By $30m ARR and Series C, that team will have grown to around 125 people.
At this stage it is also worth reminding yourself that marketing is a lot more than demand gen.
As you consider your leadership structure and whether Marketing should report into the CRO, clarify whether your CRO has the capabilities of leading the non-revenue related functions in your marketing team.
If not, you’ll want to maintain a CMO role with some dotted lines into your CRO.
By the end of this phase, your Sales org will look something like this:
So start considering the roles you have today and where you need to accelerate on hiring.
As you approach $30m ARR you will open your first international office(s) if you haven’t already. This will help you to expand your TAM to achieve the increasing financial goals.
You’ll likely create a General Manager (GM) model where your international leader holds responsibility for the entire GTM stack - including CSMs, RevOps and potentially local marketing teams.
Jobs to be done
Notion Capital, ICONIQ and SaaStr provide some helpful insight into what needs to be achieved in this phase if you are to successfully raise your Series C.
“From $10m to $30m the GTM playbook is developed and hardened, with increasing predictability across the customer lifecycle, backed up by robust processes, systems and data.”
Now is the time when you’ll continue your transition from building a great product, to building a great revenue machine.
Courtesy of Notion Capital, SaaStr and ICONIQ here are some of the key jobs to be done as you transition through this phase.
Common Problems
As your team scales beyond the ‘family’ atmosphere you had as a startup, you’ll experience some common challenges.
Many of these result from bringing in new leaders and team members that have come from siloed organisations in the past.
You will need to reinforce, through your communications and your leadership structure, that you have a single aligned revenue team.
As your team expands and new leaders bring technology they have used in the past you will see a proliferation of revenue tech products in your stack.
As this increases, the experience for buyers and your sellers deteriorates. You will want to rationalise this and reduce the low adoption and wasted expense with a tool like Vertice.
You must avoid the Marina Bay effect where new leaders come in and start to build their own hierarchies forcing cross-functional decisions up to leaders.
Maintain bridges between teams to avoid the creation of siloes.
At this phase, your sales leaders (whether you call them a VP Sales or CRO) now need to be focused on process design and less on deal execution. They should now have a management team coaching and supporting reps, allowing the leader to build a system that scales.
Takeaways for this phase
It can be tempting as you move through $10m ARR to think that you have defined your GTM processes and can just put your foot on the gas - but this is the start of a new journey.
“Every time your company doubles in size, you have to think of it like a new company”
Look at the new challenge ahead with fresh eyes:
Your Revenue Operations Requirements
At this stage, your sales leadership should be taking on responsibility for the entire revenue engine, but given most CROs come from a sales background with limited marketing and customer success experience, your Revenue Operations team will be the glue that aligns your end to end revenue engine.
Revenue Operations will give you the confidence that you can predict the future growth and demonstrate consistency to investors as you approach Series C.
You should be considering topics including:
Iterate your Go To Market processes
Refine and accelerate tech stack roll-out
Strip out wasted cost in overlapping/unused SaaS stack
Deploy new business models (enterprise, partners, new countries)
Refresh playbooks for wider TAM and product set
Refresh metrics for this stage of the business
Integrate acquisitions into the revenue engine
Expand data sources to improve forecasting predictability
Refresh compensation models as new products, regions, channels launch
Continue to speak to and learn from customers
Seller ridealongs to learn what’s happening in the field
Create data insights from product usage for buyer enablement
Buyer experience audits to hunt for friction
Target account research and prioritisation
Developing upsell/cross-sell playbooks to drive NRR
Expand your customer testimonial and customer referral programs
There is a lot to do and you want to ensure that you have a Revenue Operations roadmap in the same way you have a product roadmap.
Don’t get to the end of the year saying “we never got round to developing the partner program”
Revenue Operations is NOT only an internally focused function.
I use the Revenue Acceleration Flywheel to describe all the external and internal aspects of the engine you need to build for Series C.
As you build out your Revenue Operations team, avoid the temptation to focus them purely on the internal aspects of the flywheel.
They are essential, but if you miss your buyer’s perspective you’ll optimise an engine that doesn’t have enough fuel coming into it.
You need people that can go and speak to your customers and help you scale your marketing, sales and customer success functions as one.
I recommend structuring your Revenue Operations team around the jobs they will work on, and not the function that they came from or most closely support.
With a structure like this you break the siloes, and have one team (Strategy) that is very much focused on outside your business.
Hiring the right sales leaders
As you scale the business your sales leader will take on increasing responsibility and move from being a player/manager, to a sales leader, to a full revenue leader.
But these titles often get misused as you try to encourage a candidate with a stretch title.
During this phase you’ll be moving from having a VP or SVP Sales up towards a CRO by the time you reach $30m, so let’s look at the different job descriptions.
The VP Sales is very much focused on their sales team, with no responsibility for the marketing or customer success functions.
The CRO however owns the end to end revenue engine - including marketing and customer success.
The CRO is a senior executive who is focused on hiring the right leadership team across the GTM function - a leader of leaders.
The distinction between these two roles is important, as you’ll start this phase with one, and end with the other - and just promoting your current VP Sales with an upgraded title is unlikely to be the right approach.
Let’s get started
That brings us to the end of the Series B Founder’s Guide to Revenue Operations.
Watch the full 60 minute module free and ungated here:
Further reading:
Notion Capital - Start, Build, Scale - from $1-$100m
ICONIQ - Saas Growth and Efficiency
SaaStr - The SaaS Org Chart with David Sacks
Get started
Whenever you are ready, there are two ways that I can help you scale your revenue engine.
Buyer Experience Audit - I’ll impersonate a buyer researching your segment and company and let you know what I find. Ideal for planning your RevOps strategy.
RevOps Impact Playbooks - I’ll help you implement one or more tactical processes across your revenue teams - content, referrals, testimonials, adoption and more.