Revenue was growing but the underlying metrics were inconsistent and the sales process had no defensible logic. Investors were asking questions the team couldn't answer well.
Series A closed at a higher valuation than the initial target. Revenue processes documented, pipeline data clean, and a commercial narrative that investors could actually interrogate.
The situation
The company had grown well. Twenty-two people, £2.4M ARR, a product that had found genuine traction in a market that was clearly real. The two co-founders had done almost everything right.
But they were six months out from starting a Series A process, and a commercial advisor they trusted had told them bluntly: your revenue story doesn’t hold up.
The problem wasn’t the top-line number. It was everything underneath it. Churn that was higher than it looked because expansion revenue was masking it. A pipeline that was consistently over-forecast by 40%. A sales process that was effectively undocumented; the two people who ran the most deals each did it differently, and when asked to explain it, they said different things.
Investors would ask: “Walk me through your sales motion.” The honest answer was that they didn’t have one written down. That’s a difficult answer to give in a Series A process.
Discovery Week: what we found
The diagnostic took a week and produced a long list. The prioritised version came down to four things.
1. Expansion revenue was hiding churn. The headline retention number looked healthy. The underlying cohort data was less flattering. Some of the company’s best customers were expanding significantly, which was great, but it was papering over a churn rate in the SMB segment that wasn’t being addressed. Investors would find this. Better to address it first.
2. The pipeline was not reliable. Average deal size in HubSpot was materially higher than average deal size at close. Probability weightings hadn’t been updated since HubSpot was set up eighteen months ago and bore no relationship to actual conversion rates. Forecast accuracy was poor and the founders knew it.
3. There was no documented sales process. This isn’t unusual; most businesses at this stage don’t have one. The problem was that when investors asked about it, the founders gave inconsistent answers. Both were truthful. Neither was the same. That’s a due diligence risk.
4. The ICP had drifted. The company had started with a clear target customer profile. Over time, they’d said yes to a wider range of buyers, some of whom were churning faster and expanding less. The founding team knew this but hadn’t acted on it, partly because revenue is revenue.
What we built
The engagement was structured as a Project, with a defined twelve-week scope: rebuild the commercial foundations well enough to support a fundraise, and document everything.
Weeks one to four:
- Rebuilt the pipeline stage model with accurate probability data based on actual historical conversion
- Cleaned 18 months of HubSpot data: moved lost deals to lost, archived dead opportunities, corrected stage placements
- Ran a cohort analysis that produced an honest picture of retention, expansion, and churn by segment
Weeks five to eight:
- Documented the sales process as it actually worked (not idealised, but accurate) and identified the three or four things the best deals had in common
- Wrote an ICP document that reflected both the original target profile and an honest assessment of which adjacent segments were worth pursuing
- Built a commercial narrative document: a structured explanation of the sales motion, the metrics, and the unit economics, written to anticipate due diligence questions
Weeks nine to twelve:
- Worked through the churn issue: identified the specific characteristics of customers who churned, built an early warning model, and designed an intervention process
- Prepared the founders for commercial questions in investor conversations: not coaching them to give better answers to the same questions, but fixing the underlying things the questions were pointing at
The outcome
The Series A process ran over about five months, starting roughly eight weeks after our engagement ended. The company closed at a valuation above their initial target.
More useful than the number: the commercial due diligence process produced no surprises. Every question that came up had a documented, honest answer. The pipeline data was clean enough to forecast from. The retention narrative was honest about the SMB churn and credible about how it was being addressed.
One of the lead investors said afterwards that the commercial documentation they received was among the clearest they’d seen in the round. I’m not going to pretend that closed the deal; the product and the market did that. But it didn’t get in the way, which is the goal.
What this came down to
Most of the work here was making real things legible: taking what the founders already knew about their business and turning it into something that could be interrogated by an outsider who hadn’t lived through it.
The churn problem was real and needed fixing regardless of the fundraise. The ICP drift was real and needed addressing. The pipeline data was genuinely misleading and had been since the CRM was set up.
The fundraise was the forcing function, but the work was worth doing on its own terms. Every business is better with honest data and a documented process. The investor round just made the case for doing it now rather than later.