Hiring Doesn’t Need to Get Messy

Hiring is one of the trickiest things for earliest stage companies and VCs don’t always make it easy. The team that gets an idea to product-stage isn’t always the one that’s going to take you through smart growth. And this is why there are often a lot of conversations between entrepreneurs and investors about “upgrading” executive teams, especially when they’re fundraising.

Entrepreneur logic says that investors want to hear that new funding will be used to upgrade the executive team or to make the hires the founder never did before. Maybe the head of marketing isn’t actually operating at a VP level and CFO is more of a controller and more senior people need to be brought in. Sometimes this is where dirty laundry starts to get aired. Founders will say, “You know, my CTO never got along well with him, it’s about time to upgrade.” What this tells your investors in part is that you didn’t think enough about your team strategy early on or that the culture you’ve built isn’t the best in the world.

On the flipside, #VClogic says, “I know this great person, which one of our companies should hire them?” Or, over time, an investor may realize they’re not super close to anyone on the executive team and will try to pressure a company into making a hire that’s best for the VC but maybe not for the company.

Sometimes a situation comes up where the board or investors are giving a founder a hard time because they can’t seem to bring on the quality people they need. VCs think they know who the founders absolutely need to hire. The founder maybe feels like they don’t have time for hiring or maybe just aren’t great at it. So they spend top dollars to hire an executive recruiter (that they probably don’t know how to make the most of) or they give in to outside pressures and just hire the people suggested by their board or investors. And then things get even messier.

Plan Ahead

Just like with user growth, #VCLogic might push founders into making some decisions that are not the best. Avoid the hiring scramble and know when you’re getting the best advice from your investors, recruiters and others is planning ahead. Don’t wait until you’re raising your Series A before you think through what skills you need in senior management and when you are going to need them. Be honest with your team about their abilities and about when and when you’re going to hire someone over them. And then put your BOD and investors to work as recruiting resources.  

Pro tip: Another #founderlogic thought is to try to hire a big name before you go out to raise funding. “Hey team, let’s hire this rock star CFO because then VCs will take us seriously!” Don’t do it.

Mind the Culture

If you’ve raised a big round and are spending a bunch of money on recruiters and acquiring teams of engineers but then your culture sucks, those new hires will be infinitely poachable. When they don’t stick around, you’ve wasted time, effort and money. One thing we overemphasize with the portfolio companies we’re working with: Be slow at hiring but more than that, make sure that none of the best people ever want to leave.

It’s super easy to stay singularly focused on getting the company and product off the ground but if your culture goes toxic, hiring and retaining good people will be impossible. Be professional, aggressively eliminate any tech bro mentality earlier on, hire a diverse team, and promote open lines of communication for real and from the start.And if someone is threatening a healthy culture, this is the one time you should act fast. Always be prepared to fire a bad hire quickly.

Having a hiring plan from the earliest days of your company will help avoid making bad hires and culture missteps as you grow. By being deliberate you can resist getting caught up in #FounderLogic or sidetracked by #VCLogic to build the team you need.