The importance of talent in scaling your start-up to exitAdding value to your Venture Capitalist portfolio through talent.
As a Venture Capitalist working with start-ups, did you know that talent is key to maximising success across your portfolio of businesses? It’s the crucial element following Seed, Series A, or even Series B or C investments to ensure you’re on track to swiftly scaling to exit.
At Apollo Solutions, our Technology team specialise exclusively in placing hard-to-find Software & DevOps candidates in technology-driven start-ups. So, in this article, we reveal how essential talent is for achieving long-term success and ROI for investors. We explore how VCs can ensure increased consistency and confidence across their end-to-end portfolio of businesses. And why funding strategies with talent at their core are giving investors a competitive edge.
‘Facebook’ rather than ‘MySpace’
Nobody could predict the demise of MySpace following a hugely successful launch into the market in 2004. And especially not its founders, Brad Greenspan, Chris DeWolfe and Tom Anderson, who celebrated Rupert Murdoch’s remarkable buy-out totalling $580 million just one year later in 2005.
Despite immensely promising beginnings, and initially dominating the social media space, neither Murdoch’s conglomerate nor the company’s originators were destined for continued success. It was sold again just a few years later at a fraction of its previous sale and just $35 million. There are various theories as to what, or who, caused the downfall of MySpace, but some of the most common beliefs include technical faults, a lack of innovation and a poor understanding of the landscape and customers.
Could MySpace have triumphed under a different team? Almost certainly, yes. The foundations were there, but the talent to drive the company forward was not. If ever proof were needed of the importance of people in a start-up’s success, look no further than the MySpace’s backstory.
In contrast, competitor Facebook is still going strong today. At its core were, and still are, technology experts and a team boasting dynamism and a winning edge that MySpace unfortunately lacked.
So as an investor, how do you ensure you’re placing private equity into a ‘Facebook-style business,’ as opposed to a ‘MySpace’?
The secret’s quite simple. It all begins with people.
Talent: your route to successfully exiting
As we shift to increasingly automated business processes, online and remote working, it’s critical to remember and reinforce the importance of people in every business area. For some time now, and alongside the rise of our increasingly digital society, the essential role humans play in helping companies succeed has been widely publicised. Having the right talent in the right roles can literally transform a company. No matter how much equity is pumped into an organisation, as demonstrated by MySpace, without the right people, longevity’s never a given.
Backing up this thought is Harvard Business Review’s Tom Eisenmann - the Howard H. Stevenson Professor of Business Administration. He points out, “I’ve noted VCs look for founders with the right stuff: resilience, passion, experience leading start-up teams and so forth. But even when such rare talent captains a new venture, there are other parties whose contributions are crucial to it. A broad set of stakeholders, including employees, strategic partners, and investors, all can play a role in a venture’s downfall.”
As a VC, how much input do you have into the management of the businesses you’re investing in? As HBR’s Eisenmann highlights, you may be heavily involved with founders, but what level of influence do you have on the people with responsibility for running day-to-day operations within the organisations you have equity in?
If the answer to that question is ‘none’, your exit strategy could be missing a vital component.
Taking control of your exit strategy
To propel your portfolio of businesses to maturity within limited timescales, you’ve likely a strong exit route strategy that will allow for your buy out as soon as possible.
What if you could bear greater influence over that process?
Through partnering with a talent acquisition specialist like Apollo Solutions, you’ll gain access to an extensive network of technology leaders, plus people data for scaling to float on the stock market or preparing for exit. Perfectly aligned with your needs, values, and timescales, you’ll be confident in the knowledge you’re engaging a strong team of managers sharing your vision and who you trust explicitly to take charge of operations. You’ll also gain access to our large data pools, which will allow you to compare how much equity your founders are giving to early employees against your competition.
We know it’s talent that drives organisations to maturity. We’ve helped scale the SRE teams for some of the most promising early stage start-ups, and we’ll work to find the right talent to help you scale faster and achieve your IPO timescales. It begins with understanding the skill sets required for you to scale your individual companies. But also involves us getting to know you and your businesses, so we can match you with talent sharing your mindset, to help grow and strengthen your entire portfolio.
We’ll match you with dynamic technology professionals with a proven track record of helping businesses meet their goals.