VC firms exist in a highly competitive business climate, vying for investors and to be the first to bring new products and services into the marketplace. For VC firms, the risk of failure in the transition to profitability is great—as much as 95 percent according to some studies.
The real difference between success and failure for a VC firm often comes down to the quality of its talent management strategies. In just 20 years, a shift has occurred that now places 80 percent of a company’s value creation on its intangible assets, namely its talent. Putting the right assets in the right places at the right time should be a top goal of any venture capital firm, worthy of significant effort by the leadership team.
The Talent Management Challenge
Despite the fact that more weight now rests on having exceptional talent than ever before, it has become harder than ever to recruit and keep top talent. The business model’s life cycle has shortened dramatically, and constant innovation is needed if a firm is going to remain relevant.
Global expansion and frequent economic downturns in various parts of the world can also present talent management challenges as needs and strategies must be constantly shifted to adapt to changing conditions. VC firms will not likely procure top talent unless that talent sees exceptional opportunities with the firm.
What Exceptional Talent Management Looks Like
Some VC firms hire a recruiting or headhunting firm and expect an agency to meet all their hiring needs, but successful talent management is so much more than outsourcing to a recruiter. It is vital that a VC firm’s talent management strategy flows out of the company’s unique personality, which is nearly impossible for an outside firm to understand to the necessary depth.
Exceptional talent management requires understanding of current and future business goals and strategies, identifying talent gaps and the kind of talent needed to fill them, and knowing what elements are required to successfully execute talent strategies.
Helping VC Firms Be On Top of Their Talent Management Game
Because of talent acquisition’s importance for VC firms, it is essential to have a process for integrating top talent when a desired candidate comes along. Engaging a new employee requires information sharing, communication, and organization. Getting leadership on the same page is vital to working well with top talent and integrating new hires into your organization.
Relying on word of mouth and not having an organized, efficient process can result in confusion and alienation for candidates and new hires all along the talent management continuum. Increasingly, top talent wants to know that their work will be meaningful and that they have a purpose. This must be demonstrated from the recruitment process forward.
Lack of a defined process for hiring and onboarding can lead to a hasty exit for top talent, which can interfere with VC goals, even leading to eventual failure for the firm. ThriveTRM offers a way to track and share every aspect of the recruiting and hiring process with all the major players so nobody misses anything. Discover solutions for VC / PE firms that can give your firm the advantage of having the best possible talent management.