The common wisdom about staffing early-stage companies is to hire a "been there, done that" CEO and add a significant equity stake in the enterprise which will rewarding boldness and success. Probably nothing you haven't read in most business publications or heard from every training course or professional speaker during your career. So what is the most effective approach in this economy when a sustainable revenue stream, rather than an early IPO or acquisition, is the immediate goal?
Acquiring talented people in this business environment requires new staffing strategies. In the course of leading two recent Founder/CEO searches for early-stage companies, I've found that the total pool of qualified candidates is actually larger since these companies have a shorter runway to profitability and many are primarily about survival. I've also found serial entrepreneurs interested in "getting back into the game" as a diversification (or recovery) strategy within their retirement portfolio.
I believe that the traditional early-stage staffing model is evolving from full-time hires to virtual teams formed "just-in-time" to tackle due diligence, proof-of-concept, and related business issues in early-stage and portfolio companies. Some talented people are reluctant to commit to full-time roles with a prolonged time to an exit by IPO or acquisition, especially if relocation would be required. And venture capitalists are reluctant to invest if a rapid path to revenue and a sound implementation plan is in place.
The solution could be accessing a robust pipeline of seasoned players with complementary skills that launch, accelerate, and implement key business initiatives to grow, realign, or turnaround early-stage organizations. In this model, "harnessing" talent requires the additional skills of working in a virtual team, contributing functional and industry strengths in clearly defined roles, and achieving meaningful results rapidly applying a "First and Every 100 Days" methodology.
For example, I'm currently conducting a Founder/CEO search for a "green" metal anodizing process start-up as a board member of the New Mexico Angels. The inventor and I spoke to four second-round candidates yesterday. Our selection last year might have been the "been there, done that" CEO. We may go that direction now, but our other choices are forming a "SWAT" team with the expectation that they make a go/no go recommendation within 90 days based on independent testing and basic customer demonstration.
There will still be lead executive, but the company may not be formed until the team (based in the Midwest and West) verifies the business model. In a sense, we've built due diligence into the selection process to save time and expense. These times require rethinking prior business models, and how, when, and where to form teams with clear roles and responsibilities.
Mark Walztoni
Managing Director
Sustainable Ventures Alliance LLC
Santa Fe, New Mexico 87540
(505) 603 - 581o
mark@sustainableventuresalliance.com
http://www.sustainableventuresalliance.com.com
http://www.markwalztoni.com/blog
We assist investors and early-stage companies to acquire, develop, and retain talented people
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