5 reasons for SaaS start-ups to apply for funding before the festive season

November 20, 2023
5 reasons for SaaS start-ups to apply for funding before the festive season

The festive season is a rare time for founders to relax and recharge with friends and family, but it’s also a crucial period for start-ups to prepare for the holiday closure and plan for the year ahead.

With deadlines, trips, and events likely occupying your calendar from late November through the New Year, it’s easy for business goals and milestones to get lost in the flurry. Applying for funding before the year-end rush begins means growth can continue uninterrupted, and your teams are confident and motivated to take on the load before a well deserved break.

Here are 5 compelling reasons founders should pursue funding opportunities in anticipation of the holidays:

1. Funding for holiday operations and growth initiatives

‘Tis the season of massive opportunities for business growth through new customer acquisition, partnership prospects, and a forecasted 66 billion Australian dollars in pre-Christmas sales alone. It’s also a time of higher costs and increased operations, coupled with a limited work schedule.

As customers look to complete projects before the holidays or take advantage of year-end deals, start-ups tend to experience an increase in operational costs from bringing extra hands on deck, to expanding their cloud infrastructure and data storage capacity to support the uptick in traffic.

Additional staff are vital to keep up with busier support ticket volumes and implementations. Hiring freelancers or contractors over the holidays prevents current employees from burning out under the weight of extra responsibilities. However, these extra hires mean larger temporary payroll costs.

In case revenues dip more than expected because of reduced work days, funds can act as a buffer to soften the blow until offices reopen in the new year and revenue picks up again.

2. Capitalise on partnership opportunities

The holiday season is a prime time for SaaS start-ups to scout potential new partnerships with complementary vendors, agencies, and cloud/infrastructure providers. Larger corporate partners may be open to deals and integrations intended to launch in January — start-ups can (and should!) take advantage of the excitement and motivation of a new calendar year.

Evaluating partnership prospects carefully requires dedicating proper time and resources over the festive months. Conducting due diligence on potential partners and negotiating detailed agreements cannot be rushed. Late negotiations risk missing the opportunity to be involved in a partner's 2024 internal launch calendars, marketing campaigns, and collaboration plans.

Securing funding in advance provides the budget and bandwidth to fully explore partnership courting, evaluations, and deal-making before they lock in their early 2024 prospects and initiatives. Coming to agreements in principle ahead of time, sets the stage for formal announcements and aligning launches with the goals of all signed partners for the new calendar year.

For example, an accounting software start-up could use pre-holiday funding to devote senior team time exploring a potential partnership with a large bookkeeping firm. This might allow integrated solution trials and an agreement in principle to jointly launch their new offering that’s aligned with partners' and prospects' January goals.

3. Conduct strategic marketing campaigns

Supplementary capital allows time to develop thoughtful seasonal and new year promotional campaigns, with content optimised for maximum engagement during downtime. Testing variations and tracking user behaviour over the holidays provides key insights on what resonates most with target audiences.

With optimised campaigns pre-designed, activation is seamless for when teams return. Pre-written landing pages, emails, ads and more can be ready to deploy according to insights gained. Qualified leads nurtured during the break have weeks to convert to customers once offices reopen.

Advanced planning also permits experimenting with different campaign channels like social, search and email. Data collected identifies highest performing approaches. Budget assignment can then strategically emphasise top-converting tactics post-holiday and set the stage for growth leading into January and beyond.

Let’s take a project management software start-up as an example. The business tests holiday ad campaigns tailored for travelling professionals, gathering insights with banner ad campaigns on industry websites promoting a limited trial of the tool. Retargeting the qualified leads after the holidays may convert those wanting a fresh start to the new calendar year.

4. Avoid burnout and enjoy the break

Many founders wear multiple hats like product, marketing, sales and more on top of financial and operational responsibilities. The intensity of running a start-up without breaks can easily lead to burnout. Getting funding validates a runway into the new year and relieves a lot of stress, allowing you to fully disengage from work worries while recharging with family and friends.

Burnout is a serious challenge particularly over the holiday season, with 68% of employees surveyed by Slack admitting they have trouble switching off or stepping away from work during the holidays, and over half (55%) feeling the effects of burnout.

Announcing new financing as teams prepare to wrap up for the season can inject a boost of morale. Employees feel secure in their roles with compensation continuing smoothly in the coming year. Returning to the office, motivated teams will tackle goals with optimism and kickoff new calendar year activities on a positive note.

5. Secure talent for growth and development initiatives

Strategic projects and expansions planned for the new year may require recruiting specialised skills not already in-house. However, top talent is scouted months in advance in this competitive market. Established start-ups leverage pre-holiday funding rounds to proactively identify potential hires.

High-calibre candidates appreciate openly communicating a start-up’s funded runway and ambitious new year roadmap. It demonstrates security and opportunity for growth. Plus, new team members onboarded before the holidays have time to properly absorb company culture, shadow existing roles and ramp up productivity over the festive period.

Strong long-term visions require solid foundations, and early funding attracts all-star team members that will be integral to realising larger goals and scaling capabilities. Through their expertise, business processes, systems, and products are strengthened, enabling aggressive growth plans to be implemented. This display of continued progress facilitates future fundraising, helping grow your business well into the future.

Start 2024 with a partner to power your potential

Securing funding before the holidays has clear advantages for starting your new year off strong. If you’re a start-up founder looking to fund your upcoming strategic initiatives, consider Kashcade for your financing needs.

As one of Australia's leading early-stage funders for tech start-ups, we make access to working capital fast and simple. Kashcade understands the unique challenges start-ups face, and our streamlined application process can have approved funds in your account within days - not weeks - with flexible repayment terms to suit your cash flow.

Funding from Kashcade requires no equity, so you maintain full control and ownership of your business. Take the first step towards fuelling your company's 2024 growth by applying for a start-up loan today.

Want to know how much funding might be available to your company? Our funding calculator can give you an estimate.