I’d like to discuss an eCommerce founder whose direct-to-consumer women’s brand is really hitting its stride. The company has repeatedly turned down capital from eager investors, opting instead to remain self-funded.

The company is primed for growth and positioned to address excess demand, largely due to the steps the founder took to lay her brand’s foundation. Unfortunately, many first-time founders overlook these items and focus solely on building their product.

Over the years, I’ve seen situations where a startup needed to transition from a founder-operated business to a real company. And while in many cases the founder-operated versions are growing at a healthy clip, formalizing the business and building a good base sets the table for rapid growth and enormous opportunities that wouldn’t otherwise be possible.

Build Your Culture Now

Among the first things investors look for are leadership and culture.

As a founder, you must have a burning desire to build a great offering and satisfy a need in the market. If you’re good, your startup will start gaining traction and garner sales. It’s crucial that you hire people who align with your internal values and mission.

This brings me to another eCommerce company.

I’m currently working with the founder, and her brand is in hyper-growth mode. For several months—when the company really needed to scale—the founder couldn’t do it all herself. She needed to hire salespeople and social content experts. The quick fix was to hire cheap temps, but this turned into a revolving door of workers who were only in it for the paycheck.

The temps would quit every few months, and the company struggled to build any intellectual capital.

The loose culture proved a challenge.

In startups, “culture” may sound like a fluff term. However, it’s an effective way to rigorously develop talent. As founders, you simply can’t do it all alone—and having a driven, infallible culture can be a game-changer in attracting and retaining talent.

You may not be able to offer top-dollar pay to good workers, but you can give them upside and a fast-paced, “us against the world” environment that bigger, bloated organizations simply cannot provide.

Attracting and retaining talent—especially in the foundation-building days of the company—is a key component of your success. You want your company to draw and harness talent magnetically. This is what great companies do early and often.

Have a Game Plan for Raising Capital

With many companies I’ve advised, the founders had great products with considerable traction—but they didn’t know how to take the business to the next level.

Putting together an investor deck is a good first step.

The investor deck is useful in that it forces you to clearly articulate your company’s value proposition in a concise, easy-to-understand way. This practice will also bear fruit as you approach potential partners (distributors, collaborators, etc.) who can help grow the company.

Investors rarely have much in the way of patience, so it’s important to make it clear right off the bat how you acquire customers and make money. In giving you capital, investors need to know there’s a clear path where you can guarantee a threefold or even fourfold return on their investment.

Coaching is an important part of the process. Founders should seek out advisors who are experienced in screening investor pitches. This is one area where I’ve managed to really help my companies. Ideas and pitches always sound better in your head than they do out loud, so make sure you look for unbiased people who can give you honest feedback on your pitch.

And if these people can also help with potential investor introductions, then that’s an added bonus. Particularly in the consumer and health & wellness sectors, many industry experts have built solid products and loyal followings, yet leaned on me to leverage my network of investors.

So, with a fully-baked forecast and burn rate, the amount you raise should address the funds you need to get your company to the next “step up” in valuation. If your current raise has a pre-money valuation of $2 million, then the pre-money valuation of your next raise should be four or five times that amount to address dilution and other factors that impact the capitalization table and the company’s growth rate.

To this end, be sure to have a timeline. You cannot raise capital forever. Not only that, but raising capital can be a very demanding process—and you still have a business to run.

I typically design the capital raises I lead in waves. The first wave is composed of the most likely investors. If outreach to that group does not conclude the process, then the founder and I take our time and refocus before reaching out to the secondary group.

Finally, as much as investors are evaluating you, you should also evaluate them and determine whether they’re people who can be additive to your board. Do reference checks with other founders who have worked with the investor to gauge their experiences.

Take Care of Legal Housekeeping

Growing your business—including raising capital—is easier if you’re a C-Corp or LLC. Find a good lawyer who can help you with your articles of incorporation, bylaws, and operating agreements. As the company scales and becomes more complex, you will need to issue at least two classes of stock (common and preferred). Having the proper foundation beforehand will save you five figures in legal fees alone.

Moreover, many good investors will want board seats for their investment. Having the legal support to do this ahead of time will save you a lot of the friction, and allow you to focus on a capital raise at the same time—on top of overseeing the company’s daily operations.

In addition to organizational structure and board formation, other legal housekeeping topics include employment agreements for founders and key employees, an updated and current corporate file, capitalization tables at formation, IP protection, and more.

It’s great that you’ve built a strong product, grown an audience, and are now ready to take the company to the next level. By making the effort to lay a good foundation for your business, you can focus on growth when it matters most, and jump over hurdles with ease.