Influitive, a prominent player in advocate marketing category has closed $30.5 million in a Series B round of funding led by Georgian Partners and other investors. The company plans to invest in its market-leading platform, AdvocateHub, and expand globally.
“We will be releasing more innovative products that are synergistic with our core offering to provide the most complete advocate marketing solution on the market,” Mark Organ, CEO and founder of Influitive told BetaKit. “Influitive will also soon expand to other markets overseas to support our global customers and identify new candidates for growth.”
Influitive has made it its mission to help companies identify, mobilize and reward good clients, vocal advocates and supporters to boost referrals. “We share Influitive’s view of a massive market opportunity for business advocacy that is gaining traction every day,” said Simon Chong, Managing Partner for Georgian Partners. “For a company at this stage, this management team offers deep experience and operational sophistication. We are looking forward to helping the company grow by delivering exceptional value to their customers.”
It’s fantastic news for the startup community in Canada, but the overall trend for crossing the chasm between Series A and Series B merits more attention, discussion, and hands-on-deck. All the more credit goes to the companies like Influitive that swiftly close this notoriously tough round of funding.
It comes as no surprise that Organ calls the Series B “the most difficult round to raise,” citing two related posts on this well-known fundraising crunch. Organ identifies two main reasons: “In a nutshell, it is very difficult to achieve the characteristics that make for an attractive Series B candidate: a company with a highly repeatable and predictable revenue and product development engine, and in search for expansion opportunities before a highly likely exit (Series C, D). Very few companies are able to build this 18-24 months post Series A, and there are few VC firms willing to entertain these deals, because they don’t get an attractive stake and there is still considerable scaling risk.”
Mark Organ’s tips to raise a Series B round
- Focus energy on building repeatable processes in every department. Complete all required executive hires within 9 months of the Series A (for a SaaS company, the leaders in Customer Success and Marketing should already be on board). The critical processes to nail are in demand generation, sales conversion, product development and recruiting. There should be flowcharts on the walls, and the 1:1 meetings should identify bottlenecks in the processes with solutions to eradicate them. If the CEO does not have strong process skills, he/she should hire someone in operations who does.
- Shorten your cycles as much as possible. For example, we moved from a quarterly to a monthly sales and demand gen forecasting system, and a two-week sprint. Within those cycles we have much shorter, sometimes daily cycles to allow for more data points in experiments, so we can identify process improvements.
- You are ready to start approaching investors about the Series B when the numbers for demand generation, sales, and hiring increase predictably each cycle. This may be a full year before you actually raise, because Series B investors want to see ‘the movie’, not a snapshot in time. Our MRR more than tripled from the time we started looking for our Series B to the closing. Most of the Series B candidate investor firms are growth equity firms, often investing at $10M+ ARR – you need to convince them that your opportunity is just as low risk, but with greater upside. So show them the repeatability of the business, the strength of the executive team and the power of your product to drive eye-popping numbers.
- It is important to have that one jaw-dropping number. Something that the lead partner can think about in times of doubt, that he can use when pithily describing your opportunity to partners and other investors. We identified two candidates for this ‘epic number’ at Influitive: a very high NPV driven by low churn, and a very rapid ”land and expand” growth in enterprise accounts from an initial pilot. Then we set about driving these numbers to monster extremes. Of the two, the “land and expand” number proved to be the one that got us multiple term sheets. The ideal set of numbers are “jack of all trades, and a master of one” – no glaring weaknesses, just one simply awesome strength.
What’s next for Influitive?
The success of Series B means Influitive is currently hiring for over 20 new roles in Toronto, Boston, San Francisco, and Palo Alto, with more to come to help keep the company on the trajectory of explosive growth, according to Organ.
Influitive, the advocate marketing experts, is based in Toronto with offices in Boston, Palo Alto and San Francisco, and count DocuSign, Hootsuite, HP Software, Marketo and Oracle among its customers. Led by Georgian Partners, other investors in this epic Series B round include OurCrowd, Atlas Venture, Docomo Capital, BDC Capital IT Venture Fund, and previous investors Hummer Winblad Venture Partners, Illuminate Ventures, Resolute Ventures, Relay Ventures, and First Round Capital.