I mentioned in a previous post that portfolio support is an underrated part of VC. It's easy to say that you support your portfolio companies without actually doing anything. But for firms (and individual investors) that want to get in the trenches with their companies, effective support can generate sustained long-term value.
Start with hiring. Hiring is a big challenge for startups. In every monthly update we receive, nearly all CEOs say this explicitly. There's two areas that appear to be the most challenging to find people for: engineering and sales. But getting good candidates to the table doesn't seem to be the only problem. With one of our portfolio companies, two candidates bailed at the final hour due to competing offers. In a sense, it seems that the CEO needs to sell her company just as much as the candidate needs to sell herself.
The problem, therefore, seems to be twofold: 1) sourcing talent and 2) convincing talent to accept the role
What are some potential solutions for startup CEOs?
Start with hiring. Hiring is a big challenge for startups. In every monthly update we receive, nearly all CEOs say this explicitly. There's two areas that appear to be the most challenging to find people for: engineering and sales. But getting good candidates to the table doesn't seem to be the only problem. With one of our portfolio companies, two candidates bailed at the final hour due to competing offers. In a sense, it seems that the CEO needs to sell her company just as much as the candidate needs to sell herself.
The problem, therefore, seems to be twofold: 1) sourcing talent and 2) convincing talent to accept the role
What are some potential solutions for startup CEOs?
- Use better recruiting tools
- Hire in-house recruiters and outside recruiters to compete with bigger firms
- Offer more equity and/or better benefits (like remote work)
- Offer less equity and higher salary
- Leverage VCs and advisors (make advisors work for their shares!)
- Let VCs run the hiring efforts until the final round of interviews
- When choosing VCs, take network effects and hiring into consideration
I was surprised to learn that it was difficult to source talent as a startup CEO. I think sometimes I forget that most people don't want to work for a startup. It's easy to get stuck in the VC mindset where startups are all that matter, but in reality, most talented professionals are weary of startups because they can get paid more and work less at a bigger tech firm or bank.