If you are a venture capitalist, you’re working actively and aggressively to gain high returns on your investment by putting your shareholder’s cash into companies that have an outstanding opportunity for high growth and high returns. The stakes are high and in order to get to those results, you have to have an infallible team. In fact, venture capitalists that we work with consistently tell us that the most important aspect of their investment decision is the quality of the management.
We’ve all heard the adage, “You don’t bet on the horse, you bet on the jockey.” This is very true for most Venture Capitalist’s and as a result of that, they look to mitigate their management risk by hiring the absolute best. A top sales leader can have a dramatic impact on a company’s ability to enter a new market and win against entrenched competition. For that, you need to have people who have a very unique profile of management, leadership, innovation, and above all, they must really be sales heroes.
Venture capitalists can’t afford to risk their investments on B or C players when it comes to sales and marketing leadership. The best way to make sure that your getting to the A level talent you need is by retaining the services of a executive search or recruiting firm that specializes in the sales and marketing functions for high technology. As a Venture Capitalist looking to verify whether or not the person you have in place is going to hit their sales, bringing in an outside assessment firm or sales consulting company can also help you to mitigate risk.
By bringing in a company with experience hiring and assessing top sales and marketing leadership, you can determine whether or not the people that you have in the key positions in the company that you’re investing in are going to be able to carry the water that you’re looking for them to carry. Start-ups require a rare breed of talent when it comes to sales and marketing leadership. Typically, a sales or marketing leader in a start up has got to have an outstanding combination of individual contributor skills and the ability to get results through others by building and leading outstanding teams. Most top sales candidates for start-ups can’t pass the muster because they’re not capable of flexing from gaining the initial market traction and performing rain-making duties to landing those big initial accounts through to hiring, training, and developing a team of people who can replicate their own individual efforts.
As I recruit sales and marketing talent across the country for different venture backed clients that we work with, I realize that there are very few candidates that actually can do both of these things well consistently and therefore, who would qualify for start-up VP of sales or VP of marketing position. The same is true on the marketing side of the equation. A person who has been buried or even at the top of a large marketing organization or a mature company doesn’t have the kind of critical thinking and fast moving skills that are required in order to lead a company through its initial go-to-market strategy and then iterate that and fine tune it over and over until it’s working properly for a start-up company.
So, if you’re a venture capitalist and thinking about whether or not you’ve got the right team members at the top of your portfolio companies, start first by getting an outside assessment as you go in through the do diligence process. Second of all, make sure that if you do need to make a adjustments, that you don’t short change yourself.