Shinn, Olmsted: Inflection points for a late-stage tech startup

Managing a successful startup is an exercise in fast, smart decision-making. Every day brings new choices, big and small.

In a tech startup’s early days, taking a boots-on-the-ground approach may helps the founder gain critical insights. 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 state 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 stagebut it takes more effort and capital to upgrade operations infrastructure. 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. International expansion means working across different regulatory landscapes, currencies, cultures, and languages. Integration of accounts provides clarity for payments, receipts, liquidity, investments, the foreign exchange market, global trade, and supply chain finance.

3. 
   
   

   Preparing for the 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. Just this year, 80 new IPOs rolled out from January through June according toEY's Global IPO Trends Q2 2024. 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. Doing so will help determine whether they can support that next level of growth and scale. Leadership teams should ensure their company has the right foundation and the best team of advisors to help achieve a successful market debut.

Tony Shinn is the president of Bank of America Oklahoma City, and Scott Olmsted is the national technology industry executive of Bank of America.

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