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What got you here won’t get you there: Preparing for the realities of series B-C growth

Product market fit is only the start. Next, Series B-C tech firms must build an organisation for lasting success - Marsh explored this at London Tech Week.

Achieving product-market fit is just the beginning for growing technology companies. The next challenge is no longer building the product but building an organisation capable of sustaining long-term success. During London Tech Week, Marsh led an interactive workshop to explore what that transition means for series B-C businesses.

Recognise growth changes the rules

For many tech companies, reaching Series B or C funding is a major milestone. As acquisition or IPO conversations become more realistic, founders are no longer running a passion project. How the company is led and managed must evolve just as quickly as its commercial success.

This theme formed the basis of our London Tech Week masterclass, where founders and senior leaders explored the executive risks shaping their next phase of development.

Until now, success has probably depended on speed, entrepreneurial thinking and founders wearing multiple hats, with limited emphasis on corporate governance or organisational maturity. Series B-C changes that. Investors begin scrutinising financials, and decision-making more rigorously, while optimism around valuations and growth projections is challenged more closely. Executive teams may find themselves managing issues that were less pressing in the early stages, from AI governance and cyber resilience to regulatory compliance, shareholder disputes, M&A readiness and employee reward.

This all demands tighter discipline, as decisions that were perhaps acceptable in the company’s infancy are now examined through the lens of the long term and heightened governance expecations. Preparing for an IPO or acquisition can be a distraction from the day-to-day, but customers expect resilience, employees want confidence in leadership, and founders need to become comfortable empowering others to make decisions, so they’re not left bottlenecked at the top. This often requires a deliberate pivot away from founder dependency, as those who remain at the centre of every outcome can inadvertently become a barrier to scale.

The question, therefore, is no longer “How do we grow?” but “How do we build an organisation capable of supporting that growth?”

Connect your risks

During the session, delegates prioritised the risks they felt would have the biggest impact on their companies’ futures. Regulatory, compliance and AI risks came top, followed by strategic and business model risks, then operational and M&A risks. People risk ranked fourth.

Yet these risks are actually more connected than they first appeared. People risk may have ranked fourth, but many of the challenges discussed ultimately stem from whether companies have the leadership capability to manage them effectively.

AI implementation is a good example. While attention understandably focuses on legal, regulatory and financial risks, effective AI governance also depends on clear accountability and ways of working. Treating AI as solely a technology issue can create unnecessary blind-spots, and increase risk exposure.

The same thinking applies elsewhere. If roles, responsibilities and oversight have not kept pace with growth, many executive risks become harder and more expensive to mitigate. Take M&A. Mercer research suggests that 47% of failed deals are primarily the result of not identifying and addressing people issues strategically. Talent and operating discipline can be just as decisive as financial performance in determining whether a transaction succeeds, but for many, acknowledging this requires both a cultural and mindset shift away from focusing on commercial targets alone.

Build the foundations before you need them

Series B-C is typically the point at which governance moves from being a “nice to have” to a commercial necessity. As companies grow, they scrutiny from investors, regulators, customers and potential acquirers intensifies. Good oversight and processes should be embedded long before they are requested through due diligence. Maintaining clear board minutes, documenting strategic decisions and assigning ownership creates a valuable audit trail. These are exactly the disciplines investors and potential acquirers expect at this point, so early preparation is much more valuable than trying to retrofit governance later.

Leadership bench strength also needs to evolve before it restricts progress. Managers who thrived in a start-up environment may need support and upskilling to lead larger and more complex businesses, or managers with a different skill set may need to be brought in. Founders must become comfortable delegating responsibility and building capability across the enterprise.

The same principle applies to employee reward. Compensation strategies that were attractive in the early days of expansion may be less effective as talent requirements change. While equity tends to compensate for limited cash early on, relying too heavily on it over time can create challenges around shareholder dilution and affordability. If the time horizon over which liquidity will be available to cash-in employee equity awards, challenges with retention and maintaining engagement can emerge. With talent scarcity becoming a growing concern among C-suite leaders, according to Mercer’s Global Talent Trends, reward models should evolve to reflect changing leadership requirements. Incentives that payout when measurable growth milestones have been achieved can complement existing equity awards and help incentivise key leaders through periods of rapid growth.

Prepare for what comes next

Many founders naturally focus on achieving an IPO, but acquisition is often more likely. Instead of optimising for a single destination, preparing for multiple scenarios encourages executive teams to look beyond the next funding round and build a company that’s attractive whichever path it takes.

Series B-C is ultimately about more than scaling; it’s the point at which building the product gives way to building the company around it. Recognising that what got you here won’t get you there - and a curiosity about what a different way of working could bring - is what distinguishes businesses that continue to scale from those that stall. For founders, that often means trusting others to lead and recognising that as the business grows, structure becomes an enabler of progress, not a constraint on it.

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