Latest research into how a Leadership Team successfully transitions from Series A to Series B

The journey from Series A funding to Series B funding is one of the most challenging growth phases for a start-up. This stage is often characterised by the transition from product market fit to proving the ability to scale. However there is also a crucial internal transition taking place, which is what our research has focused on. As Jay Wilson, AlbionVC, expertly summarises, by Series B the:

“Organisation has shifted from founder-led to an org that is managed through an Exec layer”

As coaches to Founders and Leadership teams of Series A and B stage companies, we, Becca Sweetman & Johnny Hammond, were intrigued to find out more about this internal transition.

The conversation on what it takes for a Leadership Team to navigate from Series A to B is not often discussed and shared. As part of our Team Coaching research project we teamed up to gain insights from those with experience in the Series A to B transition, in order to help Founders and Leadership Teams make this change.

For this research we defined:

• Series A as a company that has product-market fit, is growing from ~25-100 people and needs to prove the business model is scalable
• Series B as a company that has a model for scaling and is likely growing from ~60-200 people
• Leadership team as the most senior team, often called Exec or SLT

During Q1 2024 we interviewed a mix of 10 European post Series B Chief Executive Officers (CEOs) and European Venture Capitalists (VCs) with experience in the A to B transition. We took them through a series of questions exploring the changes that happen, the challenges and the support teams need to succeed.

Here are some of the key findings from our research:

1. Transition from Founder to CEO

The first key finding is there is a change in role for the Founder(s), with one Founder taking on the role of CEO. They increasingly need to step back, be more strategic and build an Executive Leadership team to help them to execute. Put simply, Founders “need to be able to let go and delegate” – William McQuillan, Frontline Ventures.

It’s not just the Founder that’s impacted. Considering the broader impact of this transition to CEO, Lewis Liu, CEO Eigen Technologies highlighted the “challenge of existing team members adjusting their expectations and relationships to the CEO”.

2. Stepping Back from Founder-led Sales

As the Founder transitions into the CEO role, one of the most common roles that they are stepping back from is sales. Our research showed that Founders need to step back from Founder-led sales, with the first hire after Series A often being a Senior Sales person who can build the sales team. In our interviews this was highlighted as both an important shift in role for the Founder as well as one that is often challenging.

From a VC’s perspective, this is one of the important things that investors consider at Series B:

“One of the key proving points from series A to B is can we scale the sales beyond the founders?” – William McQuillan, Frontline Ventures

3. Collective Team Performance is Essential

The next key theme we identified was a fundamental shift from Series A, where it’s mostly about the strength of the Founder(s), to Series B where investors are looking for a strong leadership team.

At the initial stage of building out the team Jay Wilson from AlbionVC had a very simple way of framing the priorities:

“Someone needs to be good at getting customers, hiring people and raising money.”

As the team grows our findings unanimously spoke to the importance of a team having clarity of vision and being aligned with the values of the business and if not, this can detrimentally impact the performance of the team and the culture of the business. If this is not resolved early on, it is far more difficult to resolve later.

“If you have a team and there’s dysfunction and misalignment in it and you don’t feel you can resolve it, you have to fix and you have to fix it fast because it can bleed into the organisations’ dna if you’re not careful.” – Post Series B Founder/CEO

As a startup moves from Series A to Series B, an effective leadership team starts to understand, support and leverage each other’s strengths and weaknesses better. As Kate Wigdhal, CEO of Speechmatics put it, we “learnt to respect each other’s strengths and give constant feedback”.

4. Trust Your Gut

It’s easy to say that you need to build out a strong, cohesive, leadership team, however everyone we interviewed talked about the challenges that come with achieving this.

Our research showed that one of the common mistakes Founders make is taking too long to make a decision, especially when it comes to hiring. Ultimately though, the advice was consistent:

“Trust your gut – make quick decisions on hiring” – Various, both VCs & CEOs

In a fast growing startup you typically don’t have time to wait for the data on performance. Also, as one of the VCs we spoke to highlighted, “Founders are inherently optimistic” and therefore they want to believe that a new hire will work out. At the end of the day though, the VC said that the Founder “already knows what the answer is, they know what they need to do but just don’t want to do it yet – when it’s off they know it’s off”.

Getting into some of the more specific hiring advice we heard the following:

• “Understand the idea of generalist versus specialist. When the organisation is younger everyone is quite generalist, but as you grow you need the specialists who are absolutely phenomenal in their area” – Katy Wigdahl, CEO Speechmatics
• “People from big companies are often managers not contributors” – VC
• “Companies don’t appreciate how bad the impact of mediocre talent is” Jay Wilson, AlbionVC
• “Bring in more experience after Series A; people who have done it before, more professional.” Lewis Liu, CEO, Eigen Technologies
• “Fit can be as an individual or as part of the team” – VC

5. Invest in leadership development

We also asked what support is needed to make a successful transition from Series A to B.

Most recognised the value of 1 to 1 Executive Coaching, with many Founders saying that they have their own coach. Linking back to our first insight, this is often focussed on supporting their transition from Founder to CEO. These Founders also said that they extended the offer of coaching support to their leadership team members.

From the VC perspective we heard from William McQuillan, Frontline, that “Great Founders will bring in Mentors and Coaches” and “that most companies underinvest in the support of their leadership”. There is also perhaps a bias in this aspect of the research in that Jay Wilson, AlbionVC, believes that “The teams that make it to a successful Series B raise are the teams that are likely to have engaged with coaching earlier”.

However, we found that there was a limited awareness of Team Coaching but it was highly valued when known about. For example:

“An external Team Coach could have pointed out the issues in team and would have fast-tracked growth” – Lewis Liu, CEO, Eigen Technologies

“Quarterly offsite with an external coach. Absolutely critical even given the level of investment in both time and money.” – Katy Wigdahl, CEO Speechmatics

In conclusion, our research found that post Series A start-ups are moving from being Founder-led to an organisation that needs to be managed by a cohesive, aligned and collaborative leadership team. This is essential for the collective leadership required to successfully run a Series B stage company. And, whilst many do not know about team coaching, those that do recognise how a Team Coach can be a partner to a team, helping raise their performance towards a successful Series B.

Research: the research was conducted in 2024 as part of Becca Sweetman & Johnny Hammond’s research project for their Senior Practitioner Team Coaching programme with Clutterbuck Coaching & Mentoring International.

Special thanks to those involved in the research, including, but not limited to, Jonathan Lerner (Smedvig Ventures), William McQuillan (Frontline Ventures), Jay Wilson (AlbionVC), James Wise (Balderton Capital), Lewis Liu (Eigen Technologies) and Katy Wigdahl (Speechmatics).