Much goes into running a successful startup, but in simplest terms, managing one is an exercise in fast, smart decision-making. Every day brings new choices, big and small. However, some decisions are more critical. These inflection points can have a profound impact on the trajectory of a company’s long-term success.
In a late-stage tech startup’s early days, taking a boots-on-the-ground approach may help the founder gain critical insights. Usually, in the later stages, the company has found its footing and already has a product in the market. A bigger focus on growth -- rather than product development -- is key.
Here are three inflection points for late-stage startups to consider.
1. Embracing New Growth Opportunities
A late stage tech start-up may be challenged to adopt a growth culture. The company will need to invest in business systems and processes that are critical to the next growth phase, which often means sharing decision-making powers.
A company must evaluate its financial, consulting and systems partners. Transitioning to enterprise systems is still possible at a later stage—but it takes more effort and capital to upgrade operations infrastructure. In the hypercompetitive tech space, delaying could be the difference between being the acquirer and the acquired.
2. Going Global
Some startups are in a better position than others to go global. Still, many companies will need a global footprint and must make operational adjustments when engaging in a new country. With each new region, companies must also reevaluate whether they have the right people, partners, and systems in place.
Consider consolidating accounts with a single partner so that finance executives have visibility into all assets and capital. For every bank account that’s not part of an integrated platform, companies may be losing efficiencies: International expansion means working across different regulatory landscapes, currencies, cultures, and languages. Integration of accounts, regardless of geography provides clarity for payments, receipts, liquidity, investments, the foreign exchange market, global trade, and supply chain finance.
3. Preparing for Public Markets
After a landmark year for initial public offerings (IPO) in 2021 and 2022’s significant slowdown, the 2023 market seems to have found the middle ground. The third quarter of 2023 alone contained 26 IPOS, 26 IPOs, which, combined, raised $7.7 billion—a number that equals the total proceeds raised in all of 2022.
Market forecasts predict an increase predict an increase in IPO activity in 2024 as a backlog of IPO-ready companies take that final step onto the public stage. However, debuting in an uncertain market means companies must adjust their valuation expectations and prove profitability.
As late-stage tech startups begin to test the IPO waters, they must review their financial, operational, and supply chain infrastructure to help determine whether they can support that next level of growth and scale. Leadership should ensure their company has the right foundation and the best team of advisors to help achieve a successful market debut.
Understanding when your company is approaching an inflection point and preparing your team for the necessary changes is vital for continued growth. These inflection points are universal crossroads that can give organizations the best possible chances of success.
Rodrigo Ortiz Gomez is a Market Executive in Bank of America’s Transformative Technology Banking Group as well as the National Software Banking Lead for the Global Commercial Bank. His team advises companies in the Technology sector throughout on areas like Treasury, Risk Management, Capital Raising and Investment Banking. Rodrigo is in his 14th year at Bank of America and has covered the National Technology sector based out of Atlanta, San Francisco and since 2022, from his home in Austin, Texas.