The trio that needs each other: the investor, the founder, and the talent partner
Do you have what it takes?
The number of VCs is growing and the industry is becoming increasingly concentrated even by the standards of the 2018 article wherein equal splits, we see funds of up to $25M, $100M, and $250M. Recently Founder Institute launched a VC Lab program aimed at entrepreneurs and investors starting an accelerator, pre-seed, seed, and Series A funds. Boom.
When funding is readily available, more so than it had ever been in the past, one has to think about the differentiation point and, with that, the secret sauce of the offering investors have for startups.
Be wary of saying that the amount of money you have is your strength — at this stage, your bank balance isn’t your competitive edge. Focus instead on what makes you unique, credible, and relevant. In essence - every company from a startup in raise to a coffee shop goes through the same defining steps - the niche you decide to target and the pain point in that niche that is successfully solved with your USP. Dependent on what you focus on, your USP can be industry connections and partnerships (ex. biopharma, retail) or value-added services like growth marketing and talent acquisition (wherever is the pain). Many startups need a trusted partner (been burned there myself with my ventures) that will make it their priority and guide you to help you succeed, especially if you are a first-time entrepreneur.
In my recent conversation with one of the pre-seed to seed investors, it became apparent that LPs that contributed to the fund done so because they were looking for someone who is hands-on and is able to work with the early-stage startups to help them get to speed with funding amounts allocated, making a strong case for operationally-focused investors that offer value-added services beyond the frameworks and templates. And let’s face it - we live in a fast-paced environment - the moment you stop checking the pulse on the market might be the last moment you are in it.
What talent partner has to do with it?
Well, the way I see it - investors and talent partners focus on the same thing - finding, attracting, and working with the best people in the field. The investor’s priority is to find a great idea and a great founder and (ideally) enable the team to succeed with value-added services. Talent partners do the same across the whole team. You may think of it in a macro-micro context.
Seed to Series B startups usually lack on 2 points:
Visibility to talent and employer brand: the ways you differentiate in front of top talent when there are so many startups offering roughly the same deal.
Talent strategy overall: the lack of procedural flow resulting in gut-felt decisions without systematic reasoning or candidate exhausting long interview processes.
This calls for long-term engagement in the growing organization to really make an impact. What the talent partner can do for the team is:
set up the talent strategy and work with the founder to move to a “scale up” mindset from seed to series A or A to B
avoid rush mistakes in hiring and cost associated with mis-hiring (up to $1.5M/role)
ensure a better cultural match of talent brought in and best onboarding practices for new joiners (increase retention)
(last but not least) ensure that talent attraction is done properly, and not by the team member who has to fit it with 10 other responsibilities. Recruitment takes a lot of time and calls for training in combat
