How Practicing Innovation Translates Into Series A Funding

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Closing the Deal on Series A Funding

Successful companies that have transitioned from raising capital through seed funding to Series A, B, or even C offerings share several traits.  Among the most important yet often overlooked: they understand how to manage  innovation and translate this to product delivery. Demonstrating this key capability to investors directly translates to higher valuations.

Young organizations approach innovation in several ways, says Ken Dunlap, founder of consultancy Catalyst-Go. The most obvious: adopting off the shelf services that seemingly assist with product development/delivery and align the organization to these.  Another common management model places innovation at the apex of corporate activities with the assumption that delivery details will work themselves out over time. Both models tend to drive away venture investors.                                            

Taking your organization to the next level—and one that delivers the most benefits and attracts the most capital—comes as companies embrace innovation as a core tenet and align it within the correct context of product delivery.

Truly successful organizations view innovation as something that must be nurtured internally, not just applied through embracing externally-developed tools
— Ken Dunlap, Catalyst-Go

“Truly successful organizations view innovation as something that must be nurtured internally, not just applied through embracing externally-developed tools,” Dunlap says. “Applying technology in an innovative way is certainly part of it, but even that step requires an internal commitment to guiding innovation among individuals and teams.”

Unlocking an organization’s potential in this area starts with a fundamental understanding of what drives innovation. At its core, innovation is the application of creative concepts in a beneficial way. For a company, this could mean using a new manufacturing process to reduce costs and time-to-market. The process stems from creativity; applying that creativity is innovation.

This, says management transformation expert and Catalyst-Go consultant Israel Stol, is often where a company stumbles.

 Always Beta Founded by Israel Stol

Always Beta Founded by Israel Stol

“Many organizations simply don’t understand the difference between innovation and creativity,” says Stol, author of “Always Beta: Creativity and its Practice.” 

Many organizations simply don’t understand the difference between innovation and creativity.
— Israel Stol, Always Beta

While creativity can exist without innovation, the reverse is not true, Stol explains. Thus, the first step in fostering innovation at the organizational level is developing creativity.

While creativity, which by nature requires heavy doses of spontaneity, cannot be manufactured or mandated, processes can be put in place to help harness it. Stol, who spent more than three decades in engineering, developed a program that helps organizations evaluate their creative potential right down to the individual employee level, and then apply practical, customizable tools to nurture their creative process.

Catalyst-Go has taken the program and developed it as the “Transformation Training” seminar series. Tailored for the specific organization being trained, each seminar helps teach leaders how to identify creative traits in their staff, and how to harness everybody’s contributions in constructive ways. The ultimate goal: enable an organization to take the concepts, apply them to a specific challenge or project—such as a product development and launch—and generate results that will drive innovation.

"If I come in and spend a day a or two sharing these concepts, my focus is to train their people,” Stol says. “This way, the next time they need to solve their problems, they are familiar with the methodology and hopefully have made it part of their organizations’ DNA.”

A start-up that has applied these concepts, Dunlap adds, see it pay off at the venture-capital table.

“Demonstrating true innovation to investors is often the difference between languishing in the seed round and advancing to Series A funding and beyond,” he says.