Four things to keep in mind when managing your seed money

You nailed your investor pitch and pulled in enough funding to fuel your team of ten through the next year. Congratulations! Not many startups make it this far. But before you pop the champagne and celebrate, remember that with great funding comes great accountability.

You are now a steward of your investors’ money, tasked with ensuring that while your startup grows, their money grows along with it. Two startup founders share how they manage their money to make sure their businesses soar.

1. Invest in establishing a robust sales process– and make sure that you know it front to back.

Startups are more than just innovative solutions to real world problems. Supporting that solution needs to be a sustainable business model. And core to that model is a robust sales process.

“We have to think about the sales process… from lead generation, to distribution, to deployments, billing and collection, all through hypercare,” said Chino Atilano, founder and CEO of TimeFree Innovations, a virtual queuing solutions platform.

“If you’re a B2B startup, most of the time, you have to deal with a long sales cycle. So if you don’t know your sales process in and out, you’ll be surprised with a lot of things… you need to think about cash flow.”

2. Figure out your corporate governance structure to monitor expenditures and avoid leaks.

Another thing that most startups don’t consider is their , which is the set of rules, practices, and processes by which your business operates. One of its benefits is that you’re able to effectively audit your finances, which can speak volumes about your startup’s integrity and reliability.

“As your company grows, your revenue grows. So if it’s in the eight figures, it’s quite difficult to keep track of the expenditures,” said Atilano. “If you don’t have a framework, it’s easy to lose money. A thousand pesos here and there can add up.”

A clear corporate governance structure also establishes transparency in your operations. That way, you ensure everything is on the up and up.

“Your CFO might have full control of the financial side and there’s no transparency there,” Atilano said. “That’s a big red flag, especially if you’re seeking investments.”

3. Monitor your return on net assets (RONA).

Ask yourself: for every peso that I’m putting into this project, how much am I getting back in return?

“Even if you’re not seeking investments, [RONA is] also important, because it will guide you on which investments you’re going to make,” said Atilano. “If you’re facing two opportunities, you have to make sure that you choose the right one… meaning if you invest a million pesos here, it should return more than the other opportunity.”

4. Running after investments too much might be a waste of your time.

Fundraising is an endless slog of pitching your deck, revising it, and pitching it again. This doesn’t seem so bad after the first or second attempt. But when it’s been the nth time and it hasn’t borne any fruit, you have to ask, “Is this still worth it?”

“At some point, I decided that it was a big waste of time,” said Au Soriano, co-founder and CEO of online bus booking platform PinoyTravel. “It takes me days to prepare, and then when I go out for a pitch, at the end of the day, the big question is, ‘How much profit are you making now?’ [So I thought,] ‘How can I make a profit if I’m here talking to you?’”

If this resonates with you, then it might be time to focus your efforts elsewhere. Review your business model and see if you can pinpoint any opportunities to increase your profits. It might take a bit more time than expected, but ultimately, it could be more lucrative to your startup in the long run.

Whether you nailed your seed round or mustered up the capital to bootstrap your way to profitability, your efforts as a startup founder need to be backed up by some fiscal responsibility in order to ensure growth.

Feel free to pop the cork on that champagne now. Just be sure to log it in your expenses.