From the time between Forerunner Ventures’ $4.6 million investment in Stadium Goods in 2017 and the reseller’s acquisition by Farfetch late last year, Forerunner’s head of talent and business development Melissa Grillo said there was one area in which the VC focused most of its time: helping Stadium Goods hire new talent. After the investment, Forerunner assisted the sneaker reseller with hiring on the marketing and operations front.
Following a big investment, startups in the fashion and beauty spaces are faced with numerous challenges. Among investors, hiring talent and growing a company’s personnel is frequently mentioned as being one of the most important areas.
While investors differ in how hands-on they are after a big investment, many are playing a significant role in helping the companies they fund build the teams needed to go to the next level. Glossy spoke with a number of venture capitalists, angel investors and equity partners about why hiring is a pain point for new companies and how they’ve stepped in to facilitate the process.
Is hiring what new companies struggle with most?
Sutian Dong, partner at Female Founders Fund: I wouldn’t say struggle, but hiring in environments where lots of companies are looking for people in high-demand areas is definitely difficult. The best people to hire are not always looking for jobs, so it becomes an outbound process to actively find those individuals instead of just tossing up a job posting. For example, we run a quarterly panel that’s open to the public, with three or four female founders — some are from our portfolio and some are not, and they speak to a specific topic. People come who are not necessarily looking for a job, but we’re getting our companies in front of all these people. It’s good for their visibility, and it’s [proven helpful] when the potential candidates do start to look for new jobs.
Melissa Grillo, head of talent and partnerships at Forerunner Ventures: Hiring and keeping great talent is one of the most important, if not the most important thing, that a start up can do to increase its chances of success. It is an incredibly difficult thing to do, especially in the early stages of a company. A Head of Human Resources is often not among the first hires that a start up makes; this important company resource usually comes at the Series A or B stage round. Until those key roles are filled, it is an ‘all hands on deck’ situation where everyone must pitch in, from the founders and their employees, to investors and friends, because the right talent is key to reaching the next stage of growth.
Tina Henry Bou-Saba, angel investor in fashion and beauty: One of the hardest things about building a company is building the team. Great people are hard to find. That’s especially true if you’re a founder or entrepreneur. There are so many things you’re trying to do at once. My observation is that, as a company starts to scale, the CEO might be spending the majority of the time on hiring. You can’t fill the seats fast enough, and there’s so much to do. There’s also definitely a finite pool of good talent.
How do you help startups navigate the hiring process?
Frederic Court, founder and managing partner of Felix Capital: It’s a global battle for talent. One thing that VCs can do is expand the company’s network and let them access people they couldn’t access previously. With a lot of our companies, the focus is on the creative side, and they have less experience scaling the organization or in digital marketing. That’s the situation we like. They can focus on the creative angle, and we help them build the business. A great example is Farfetch. After we invested nine years ago, I introduced [Farfetch CEO] Jose Neves to Andrew Robb, and he’s been their COO ever since. We are as hands-on as we need to be. That was an amazing hire, and I was happy we could help make it happen.
Scott Potter, managing partner at San Francisco Equity Partners: Hiring is definitely important, but I see it as a tactic for the broader strategy. We are acquiring brands that are typically $20 million to $50 million in revenue. We know what they’re doing is working, but the question is: How do we scale it? What we’ve found is that you have to grow distribution and grow margins, and often, you need to professionalize the business without eliminating the entrepreneurial culture. Oftentimes, the founder or the existing team is doing something magical in innovation or product, but you need to marry that with someone who knows how to run a business at scale. You have to make sure that talent brings the operational rigor, but doesn’t soak the creative and entrepreneurial spirit that made the company successful in the first place.