Raising Your Series C or D? Here’s Advice from the Former CFO of UserTesting

Fundraising as an early-stage startup is fundamentally different from raising your Series C or D. Your company is likely radically changed, and the key metrics investors look for are different.

Recently, we spoke with Tien Anh Nguyen—former CFO for UserTesting and longtime veteran of OpenView Venture Partners.

After navigating Series D, E, and F rounds at UserTesting—where they raised a total of $150M—and working on the investor side at OpenView, he’s seen fundraising from all sides.

To learn from that wealth of experience, we asked Tien Anh what advice he has for finance leaders during Series C and D funding rounds.

Here’s what he shared.

Make sure your data is ready

One of the biggest shifts Tien Anh identified when you move from early-stage to Series C, D, and beyond is the importance of being confident in your data.

By the time you’re raising Series C or D, investors know you have enough customers and enough data to produce statistically significant metrics. So those metrics—how you present them and the story you tell around them—are more crucial than ever.

Once investors buy in on your leadership team, Tien Anh points out, the thing that matters most is your metrics.

Are they good enough?

Do you have a grip on the data?

And do you have easy access to the information you need?

Step one is to make sure your data is ready for this: clean, structured, unified, and ready for analysis.

That’s one of the reasons many SaaS companies use Subscript—our software puts your key metrics front and center, making data convenient and accessible and allowing you to keep a pulse on those metrics over time.

Many investors will want to do their own analysis of your data—cohorts, retention, and more—too. Your data needs to be ready and able to support that.

Part of this work is internal—getting the right data stack in place and securing trust and buy-in among your leadership team in the metrics they see. It’s also crucial to build data fluency where needed so that everyone is confident in speaking to those metrics and what they signify.

When you have confidence in your data, you can have strong conviction when telling your story and making the case to investors.

Building your slides

Tien Anh emphasized that, once you have and understand the data, it’s important to standardize a set of slides with the data points and key metrics investors are most interested in.

He recommends no more than four slides that include, among other metrics, your:

• ARR chart
• CAC metrics
• Total number of customers
• Sales pipeline information
• Win rate

But don’t stop there. Investors will ask to go deeper into the numbers, and the last thing they want to hear is, “Let me pull that together and get it to you later.”

Instead, you want to be able to say, "This is the data, go and have fun with it." That means having deeper analyses and metrics—like cohort analysis, for example, or CAC by segment—ready to go.

Solve for retention with the right customers

When you raise Series A and B, retention is important. But once you move toward Series C and beyond, it takes on a new significance, and your team will need to view retention from a different angle.

Instead of working to retain the customers you bring in, you need to focus instead on bringing in the right customers in the first place—customers who’ll stick around for the long-term and have higher lifetime value (LTV). So solving for retention becomes a front-end priority for the go-to-market team.

According to Tien Anh, that comes down to three things:

• Identifying who your high-retention customers are
• Balancing deal size and scalability
• Transitioning from one-off transactional business to subscription business

This is a tactical shift, but as Tien Anh emphasizes, it also involves a mindset change, particularly on the part of the go-to-market team.

Teams who’ve been focused on other priorities—like deal velocity and securing new logos—need to reframe their goals for long-term retention. Regardless of whether the subscription is monthly or annual, they need to think about new customers through the lens of “Will they still be using our product in 9 months or 10 months or a year and beyond?”

On the leadership side, it’s important to both communicate that mindset shift and to motivate your team to focus on retention—including altering comp plans, for example, if necessary.

Invest in your top growth driver

When we asked Tien Anh for his number one piece of advice for Series B and C finance leaders, he said this: figure out your top driver of growth. As he pointed out, most finance leaders instinctively focus on cash flow and cutting costs—and that is important for obvious reasons.

But it’s also important to be a true partner to the business. Your job isn’t just to keep the company liquid, it’s also to help fuel growth. As Tien Anh put it, growth really drives a lot of things, and it can make the cash flow side run more smoothly.

That top driver could be:

• New customer acquisition
• Retention
• Lowering churn
• Expansion revenue
• Etc.

It doesn’t matter what’s driving growth—the key is that you identify that top driver and find ways to invest in it, by figuring out the right resources to invest to help it grow and advocate for that goal to the rest of the management team.

Key takeaways

• Clean, accessible data is the foundation for a strong narrative, and it’s absolutely crucial for fundraising in later rounds.
• Retention changes as you move forward and the way you incentivize go-to-market teams should, too.
• Finance leaders need to focus on driving growth and being a true partner to the business, not just cutting costs.

Want to watch the entire interview?

Watch the entire interview with Tien Anh right here.