What's 🔥 in Enterprise IT/VC #219
Talent, not capital is a rate limiting factor to scale, importance of wiring recruiting/retention on day one
Ed Sim | Jan 9 |
What's 🔥 in Enterprise IT/VC #219Talent, not capital is a rate limiting factor to scale, importance of wiring recruiting/retention on day one
Let’s take a bye on this week and say 2021 starts Monday. With that, the enterprise market continues to be on 🔥 with a number of 🦄 funding announcements right out of the gate starting with Laceworks and it’s $525 million round which is like a next-gen SIEM for cloud infra built on top of Snowflake and Dremio in the data infra space. Expect this furious pace of announcements to continue until the end of January as much is a holdover from the end of 2020. That being said, I can say that despite the insanity of this past week in the States, deal pacing has picked right back up. With all of that 💰 flowing like a🚰, I keep thinking about some of my board meetings this past week and how much time we spent on hiring and how companies can institutionalize hiring. In fact, one technical founder told me he spent 40% of his time on recruiting and hiring. Imagine if a good portion of that was offloaded and his time could only be focused on interviewing? Institutionalizing hiring must start on day one with the founders and be built into the culture. When evaluating founding teams, all of whom are technical, one of the key ingredients that gets us excited about investing besides the obvious product and market, is the team’s ability to attract talent. Through reference checks, it’s easy to see how founders sourced, managed and retained talent, and if they were excellent in their prior roles, they will likely have 3-5 engineers and other product folks ready to join upon funding. In fact, the best founders come to us needing cash because they already have 3-4 key engineers or product folks they want to hire and are signed up and ready to go. That’s momentum right out of the gate which is so huge to evolve from idea to product. The less experienced folks think it’s just about the idea and once they raise the cash, they can go about hiring. Fact is that building a product that people want is job #1a and attracting the best talent is job #1b. While bringing in key folks from existing networks is always the way to go in the early days, having a broader sourcing engine becomes extremely important as you want to bring in diversity of race, sex, and thought to your team early. Once you get past employee 10 and that’s not built into your team and culture, it becomes harder and harder to do so. That’s why having a former Head of People like Natalie Ledbetter as our Operating Partner has been so important for our portfolio companies to expand their horizons past the first few hires. I’ll have Natalie riff on this more in the future, but suffice to say that money is becoming less of a problem, and it’s all about building an engine for people. As always, 🙏🏼 for reading and please share with your friends and colleagues. Scaling Startups
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