Nicole Sievers, Platform Associate at NextView Ventures, writes this featured guest post about effectively hiring before you've been able to secure VC funding.
For founders just starting out, hiring a team to help you build your dream can be tricky. How do you navigate your first couple of hires? Especially when you haven’t gotten funding yet?I obviously cannot speak for all VC firms, but here at NextView, where we are known to invest in pre-product and pre-traction, your team plays a very big part in securing funding. It’s important to build out a solid “founding” team before asking for money. It’s a catch 22: on one side you need a strong team of people to get funding, and on the other side you need money to attract the strong people for your team. I asked the partners here for advice on how to navigate hiring a team pre-funding, and how you can utilize different resources to help you find the right individuals to join your journey. One question we hear a lot from first-time founders is whether or not to hire a co-founder. Everyone here is pretty much on the same page about this question: Never bring on a co-founder just for the sake of it. While every individual who comes on early should receive equity, a co-founder will receive a significant portion and, ultimately, control of where the company goes. This is a very important hiring choice.
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It’s important to try to bring on a co-founder that is complementary and who you think will have longevity with the company. Don’t just hire a cofounder because they seem impressive and may help you secure funding.
From our perspective here at NextView, we like to see a strong founding team. Solo founders are hard to get behind because they lack the support they need to really get a company off the ground. David Beisel knows that “successful companies with solo founders are there, but it’s incredibly rare. It’s important to hire for complementary skill sets. Hire someone who will enhance your roster, not someone who has the exact same knowledge as you. It’s also important to have peers you can trust to get honest, hard feedback. You’ll need multiple perspectives while building your product to really understand product-market fit.” If you’re looking to bring on a co-founder, make sure this is someone you can enjoy spending a lot of time with and can generally play nice with. Most likely, this person should already be someone you know and trust. Other than a co-founder, you’ll probably need a few individuals to help with areas outside of your, or your co-founders, expertise.
There are a few types of individuals you should be looking to recruit early on according to Lee Hower. He suggests that you “hire for raw ability, work ethic, and dedication rather than trying to narrowly fill a position. With the first 5-10 people in a company (besides founders), you have to place a premium on trust because there's a lot less ‘management’ possible at this stage, and you need each employee to have a high-level output per person.” He compares this early team to building out a basketball team compared to later stage companies who can build out a football team.
There are ostensible ‘positions’ but you should basically just hire the best ‘athletes’ and figure out how to make the very small org work well as a team. It's not until you get to be a 40-50+ person team that you need to be more narrow about hiring for specialization or position.
Now, this is useful for both pre-funding and post-funding hiring. Before obtaining money, you may not be able to get 5-10 people to join your team, but you want all around all stars, people who feel confident in doing things outside of their comfort zone. People who are generalists, rather than specialists. It will make a huge difference in getting your company up and running. While all of these tips for hiring are useful, they won’t help you if you can’t even find these types of people to recruit.
Getting people on board with your vision can be difficult, especially if you don’t have the cash to offer them. Utilize your network. What keeps an early stage team together, pushing through, is the quality of the people on the team. You won’t want to work hard for a team whose company you don’t enjoy. You won’t find too many job postings for founding team positions. There’s a good reason for this.
Your referral network is the best resource you have. You want your network to vouch for you, to point people in your direction because they believe in the work you’re doing, and know others who want to build something great with you. At every stage of hiring throughout your early stages of business, lean on your network to provide talent referrals. You’ll need a specific type of individual, in addition to trying to assess whether someone has the skills, experience, or fit with the company. Spend extra time trying to understand why they want to join a super early stage startup, and your startup specifically.
They don’t need to have been in a super early startup before (though it is helpful perspective), but the "right" people tend to have specific reasons why they want to work in super early startups or your company in particular. Lean hard on the community you’ve built of advisors and trusted peers to help you find the right individuals to join your team early on. If you don’t have trusted advisors, find some. These well-connected individuals will be the keys to unlocking really great fundamental hires. That’s why so many companies rely on their VCs to help them find talent. Getting your first check is a lot like hiring your first couple of employees. If you can’t find people to believe in the dream to help you build it, good luck trying to find an investor to give you money. You have to sell the dream, with nothing to show.
You have to be able to sell the vision, and the mission to potential stakeholders, including your first hires. Recruiting early on can be hard, but it should be worth it. Build out a strong base team, and from there, go get some money.
At Drafted, we believe that your company network is your single biggest competitive advantage when it comes to hiring. Our mission is to make it easy for you to leverage your network in the hiring process to find the best candidates. Your network is already powerful, it’s just too much work to make it a priority over the day-to-day of recruiting. Companies that use Drafted see their employee referral numbers go up by 2x, their time to hire drop by 30% and their overall hiring efficiency increase significantly within just a few months.