Pictured: Michael Giannetto, Senior Advisor at Volition Capital
Raising $20 million in growth equity is an incredible milestone. It validates the business you’ve built and fuels the next phase of your company’s journey. But after the celebrations fade, a critical question emerges: How can you best allocate this capital to successfully build the company you have always envisioned?
Fresh capital can be empowering and spark new momentum; however, if not managed carefully, it can also lead to unintended consequences. It’s not uncommon for leaders to ease up on financial discipline, pursue splashy initiatives, and look back months later wondering where the runway went. To avoid those pitfalls, CEOs and Finance leaders must set a thoughtful tone early on. Here are six key principles to consider in order to help you navigate this exciting next chapter with focus and intention.
- Keep Financial Discipline Front and Center
It’s natural to feel a sense of relief and excitement after raising significant capital. However, it is important to resist the urge of “loosening the belt.” The newly raised cash is not a license for purely “intuition” based spending and financial discipline must remain a cultural cornerstone – perhaps even more so than before the raise.
Leaders should reinforce that every dollar still matters. Big-ticket expenses like new offices or expanded teams must be evaluated through a lens of strategic ROI, not emotional momentum. A disciplined, intentional approach will allow you to stretch your dollars further and create lasting value.
- Build a Strategic Financial Plan
With your new capital, it’s time to refresh your operating plan. While you likely developed assumptions and projections prior to the fundraising process, those assumptions need grounding in the current environment.
Gather your leadership team to reforecast revenues, prioritize initiatives, and build a clear financial roadmap for the next 12–24 months. This isn’t about saying “yes” to every good idea. It’s about carefully selecting investments that align with your strategy, balancing near-term wins with longer-term value creation.
Done right, this plan becomes your North Star – giving every team clarity on how to focus their time, energy, and budgets.
- Institute a Rigorous Investment Approval Process
Capital creates opportunity, but also healthy competition. Every department will have bold ideas for how to deploy new resources. To manage this well, you’ll need a thoughtful investment approval process that prioritizes returns and alignment with company goals. Importantly, resources need to be tied directly to outcomes and not gut only feel or historical precedent.
Where possible, ground investment decisions in metrics that matter. In marketing, for instance, look beyond simple ROAS (Return on Ad Spend) that can often prioritize top line growth and potentially ignore profit and cash flow. To focus on profitable growth, consider CPAAS (Contribution Profit After Ad Spend) – which accounts for gross profit and customer acquisition costs. When evaluating hires, link headcount increases to revenue generation, product development milestones, or operational improvements.
By being intentional about where dollars go, you ensure that growth stays sustainable and aligned to your long-term strategy.
- Leverage Capacity Models to Guide Resourcing
When new headcount requests come in, apply rigor before approving them. Leaders should present capacity models that link human resources to expected outputs. For instance, an advertising content creation team must forecast how many videos it can produce per month with additional hires and tie that to committed new revenue streams. Similarly, an engineering team should tie added resources to deliverables on the product roadmap which drive incremental revenue in the financial plan.
This not only protects the burn rate but also ensures every hiring decision is linked to tangible business results. It shifts the conversation from “we need more people” to “here’s how these people will drive growth.”
- Set Clear Metrics and Stay Agile
Plans are critical but so is monitoring progress and staying flexible. From the outset, define the KPIs that will help you measure the success of your investments. Cash burn, revenue by channel, customer acquisition costs, and contribution margins are just a few top-level examples. Each department should have their own relevant metrics that clearly show how they are impacting the company’s performance.
As you track performance, expect to make adjustments. Some bets will outperform expectations; others may fall short. The key is staying close to the data, learning quickly, and course-correct when needed. Flexibility, not rigidity, is what will set you apart as you navigate growth.
6. Ensure Internal Controls are Robust
Last, but not least, take the time to ensure that your internal accounting controls are in place and effective. Where there is cash, there is opportunity for fraud. It happens more than one would think, so don’t be surprised by it. Ensure that there are adequate approvals on expenditures and that there are appropriate separation of duties within the Finance team.
Final Thought: Setting the Tone for Long-Term Success
Raising growth equity is a major achievement – and a major responsibility. How you deploy this capital will shape your company’s trajectory for years to come.
This moment offers an opportunity to build great habits: financial discipline, intentional planning, thoughtful resourcing, and a culture of continuous improvement. Set the tone now, and you’ll be better positioned to deliver sustainable growth, delight your customers, and create lasting value for everyone involved.
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