Raising a seed round is fairly easy for talented and connected founders these days. There are lots of investors who will give you money based on your idea and personal track record alone. But getting your idea out of the garage and to a point where you can secure the Series A funding you’ll need to scale your business — that’s another story entirely. As I wrote about recently in Forbes, with A rounds swelling in size, investors are expecting more from companies than ever in terms of customer traction, product maturity, and — particularly — team growth.
Traction with customers and having a great product are important, of course, but a strong team is a must. Why? Because this measure alone can tell investors almost everything they need to know about how well you (as a leader) and your idea (as a business) are performing at this stage.
That’s why I always advise founders to spend at least 50 percent of their time recruiting — that’s right, at least. For one, it’s the single most important thing you can do to succeed. It’s also extremely difficult.
After 10+ years mentoring founders as a Partner at Lightspeed Ventures, and now as Founder and Managing Partner at Unusual Ventures, here’s what I’ve learned about building the right team to jumpstart your business and lay the foundation for a successful Series A in today’s funding environment.
Generally speaking, back-end engineers are the easiest to find (especially if you live in Silicon Valley). These engineers build the engine that makes the guts of your product work. It’s a distinct and highly valuable skill set, and lots of people have it. What’s more, they like working at startups because their skill sets extend to designing data architecture, writing efficient algorithms, and scaling code — all priorities startups have, that allow back-end talent to make a major impact.
Great front-end engineers, on the other hand, are exceptionally difficult to find and hire as full timers — much harder than back-end engineers. They have to be a double threat (at least) — understanding the technical side while also having a well-developed sense of visual design. It’s a unique blend. Nevertheless, you need to find one. Without the right user interface, selling your product is a major uphill battle — and if you can’t get customer validation during the seed stage, Series A funding will remain out of reach.
How do you find the engineers you need? Turn to your network and get scrappy as hell. Ask for introductions from every single person you can and be relentless. Just because one person doesn’t personally know the engineering talent you’re looking for doesn’t mean they don’t know someone who does. Go down rabbit holes and introduction chains to find the right people. Go on LinkedIn and surface dozens of folks who might fit the description you’re looking to fill. Then work backward to find mutual connections. Lastly, find the niche communities of engineers that align with your product and mission. Get active in those forums to build your social capital as an employer.
Engineering talent is critical, but what good is an elite team if they end up building something nobody actually wants to use? Not much. That’s why you need to hire for customer development — and hire much earlier than you might think. Consider your sales and technical staff two sides of the same precious coin.
Great sales people help you validate the hypothesis that led you to start your business by going out and having conversations with customers to test your assumptions. It’s a long and time-consuming process but it is essential because nobody hits the bullseye right out of the gate — nobody. Specifically, sales talent helps you create the story for your product, secure meetings with potential customers, and iterate your way to the right story and right initial customer based on feedback.
How do you do it? Once again, turn to your network. This time, however, you don’t need to pull out all the stops to find the best possible talent. In fact, it’s better if you don’t.
As a founder, you need to be the one closing business at the seed stage — not someone you hire. What you really need is junior or mid-level sales support to help with all of the legwork that comes along with sales. And let me tell you — finding senior sales talent to join you before a proven “sales recipe” is created is extremely rare. They want to close deals — not build your sales process from the ground up.
How do you know if a junior or mid-level sales person is worth their salt? References, references, references. These are sales people, so just because they “wow” you with some upfront charisma, it doesn’t guarantee they can do what you really need from them at this stage. The best way to vet candidates is by talking to people who have worked with them before. But again, don’t get too caught up on sales expertise — operational and relationship skills as well as hustle are what you need most: identifying leads, landing meetings, preparing materials, capturing customer feedback, and keeping relationships warm.
When you’re speaking to their references, ask about those abilities specifically. Can they do those things? What are some examples? How did their work impact past employers? And, importantly, how learning- and collaboration-oriented are they? You don’t want a know-it-all just looking to go out there and hunt (at least not yet). You want someone who is happy in a support role, who will learn how you want to sell the product, and help you start to codify a system that can be replicated and scaled as you grow.
Once you’ve secured Series A funding and the business is gearing up for hyper growth, you’ll be ready to go after a seasoned sales lead who can build a truly scalable and repeatable sales process that will lay the foundation for your next round of funding.