Though the venture capital industry is known for handing out the big bucks to — hopefully — promising start-ups, the industry is less known for their other responsibilities: advocating, strategy development, accounting support, financial modeling, hiring/recruiting, and everything else it takes to move an innovative company out of the fledgling stage.
As VCs, we almost always see these other “auxiliary” duties as more vital and important to the success and wellbeing of our portfolio companies than a check. Central to the wellbeing of our portfolio companies is a quality founding team working to achieve key milestones.
While many startups aren’t actively hiring or aren’t hiring as rapidly as they used to be, many are still looking to grow and find people to join their teams — and stay on their teams. Plus, this slower hiring period can be a great time to put your recruiters/HR professionals up to the task of training your interviewers and even walking through Unconscious Bias training.
No matter the climate, attracting quality candidates to a startup has become increasingly hard. Supply of good employees has waned and competition to attract all-stars candidates is stiff as a result of an increased demand for higher pay and flexibility.
So then, how do VCs find stellar talent for their stellar portfolio companies? How do VCs help startup leaders find talent with the right startup job descriptions, interviewing process, and compensation packages? VentureNext has teamed up with PurposeJobs to tackle this issue head on. Today we're talking all about interviewing.
Interviewing Candidates: What should you look out for?
Of course, you want to pay attention to whether the candidate can get the job done, but you equally want to assess whether their personality will be indicative of a successful hire. Will they challenge the status quo at a time when you need a mover and shaker? Will they be empathetic toward others on the team? Do they have a communication style that jives well with others?
Ask questions to identify culture add (what they bring to the table that isn’t currently there) and also get to know them as a person. People hire people, not resumes. A successful hire goes well beyond a Harvard degree, time at NASA, or a CEO position at a large public company. Someone more family oriented may be seen as lazy by those on your team who are career driven. Conversely, someone career driven may be seen as ‘trying too hard’ by those on your team who are more family oriented. Both of these examples could cause detrimental team dynamics that aren’t conducive to a successful venture. Therefore, it’s important to understand these qualitative measures just as well as quantitative measures.
Interviewing Process: Training and Preparing the Interviewer
Assuming people intrinsically know how to interview is the bane of a Recruiter's existence when working with hiring managers. Create a standardized interview guide and walk the hiring manager through the interview guide ahead of time; setting the expectation with the hiring manager that whatever questions they ask the first candidate (if they don't get through every single one), need to then be asked to all other candidates.
There have been too many times where the interviewer has come to the interview less prepared than the candidate, stumbling over questions and not necessarily knowing the correct next steps. Looking unorganized may spook or scare candidates, especially high-value candidates that have multiple offers from other organizations.
Interviewing Candidates: Bias in Hiring
Bias in the hiring process can force you into a narrowed population set which will exponentially limit your pick of candidates ranking in the 2nd and 3rd standard deviations of exceptional talent. Therefore, removing as much bias in the hiring process can exponentially increase your ability to attract better talent; one of the primary reasons why companies who hire more diverse perform better (they have a larger talent pool to choose from).
Image source: Hush
One of the ways we’ve seen this bias weeded out with lower level talent is through paid internships. While many companies choose to leave internships unpaid, they are also limiting their talent selection pool to those who can afford to work without compensation. We’ve come up with several ways to reduce bias in the hiring process:
Understand your own biases with awareness training.
Rework job descriptions to have more neutral, non-gendered language.
Remove names and other personally identifiable information from resumes during the initial review process. An article on ‘Blind Recruitment’ by Michael Grothaus goes more in depth on this growing practice.
Create a standardized interview template that every candidate goes through. Every question should be answered and each candidate should be given the same opportunity to answer all questions. Don’t worry too much about having the right or wrong questions, just make sure it’s standardized and used across the board.
Culture contribution is better than culture fit. Rather than focusing on if you like a candidate and think they’d ‘fit’ with the team, refocus your question to whether or not they would enhance the team dynamic. This starts with understanding the gaps in your current team/company culture and seeking that value-add.
Dig into behavior over skills. Inevitably, there will have to be some on the job training, whether you’re interviewing an analyst or a serial CEO with a couple unicorns under their belt. Having someone with ‘grit’ who lacks an esoteric skill and needs coaching versus the alternative is often the better candidate.
Schedule time after interviews to discuss candidates and gather candidate feedback. Look for concrete feedback. Things like “I just don’t like them” or “They rubbed me the wrong way” can easily stem from bias, especially ifas the person experiencing that feeling can’t explain why.
For Recruiters/HR Professionals: Source candidates from a variety of resources. Bias can easily happen when all candidates come from the same “funnel”.
Don’t automatically toss out a resume that has a time gap in experience. If the person is a fit for the role otherwise, schedule a call and give them time to explain. Resume gaps are no longer a red flag with COVID, parenting, mental health, etc. People who take time off are valuable, too.
Image source: Alchemie
Interviewing Candidates: Gauging Talent Retention
For small organizations like startups, high turnover is a costly business. When building your team (no matter what stage you’re in but especially early on), you want to make sure the people you’re hiring will be with you for the long haul.
The best way to find people who will be in it for the long run is to find real alignment on the things that can’t be changed: values, culture, work styles, etc.
You can teach new skills, update processes, change your technology, but how you treat one another doesn’t usually change.
So how can you determine in a 30-minute interview if someone has the right values and culture alignment? Here are some questions you’ll want to ask:
1. What is essential for you in your next role?
This will really help determine what the candidate is looking for. Get rich quick? Build something from the ground up? Maybe they don’t know what they want so they’re trying a bunch of different things? Whatever the answer is, it will tell you a lot about this person. Really dig into this and have a meaningful conversation, even if it feels tough or vulnerable. There’s no right or wrong answer, it just will give you a key insight into whether or not this person is in it for the long haul.
2. What core values are most important to you?
Your company values should be your north star. They determine your company culture and how business is done. Finding people who align with those values is one of the best ways to minimize turnover.
According to Deloitte's Global Gen Z and Millennial survey, nearly two in five Gen Zs and Millennial workers say they have rejected a job or assignment because it did not align with their values. That’s nearly half, and if they’re not even starting with the job, imagine what they’ll do if they do start the job and discover it doesn’t match up.
When that mission and value alignment isn’t there, employees become disengaged, less productive, and less happy at work. Discovering what values are important to them is really key in determining whether or not a candidate will thrive at your company long term.
3. How do you handle feedback? Share an example.
How a person handles feedback says a lot about them. And every company has a different process for giving and receiving feedback. Walk them through that process to make sure they understand. And then ask them for real examples of a time when they had to receive feedback. Was it difficult? Did they take it personally? How did the person approach the criticism?
If there isn’t an alignment on giving and receiving feedback (something that happens all the time at startups) then that person might not stick around long term.
4. Do you have any deal breakers?
Just as you have some red flags or deal breakers about candidates, they probably have some about companies. Is coming into an office a deal breaker? Is not having a certain benefit a deal breaker? Is a certain salary band a deal breaker? Everyone has circumstances that help them determine what they need in their lives. If someone is a parent, or caring for a sick parent, or has a disability, or is just really picky in their job search (which is actually a good thing for you in the long run!) they might have certain non-negotiables. Find out what they are and see if you can work around them.
5. What is your preferred work style? What kind of style would not work for you?
Each company has their own way of doing things. And what has been traditionally done before (standard working hours in an office) is way more up in the air than ever before. Ask the candidate about their preferred working style:
Be sure to dig into all of these things with the candidate to see if their workstyle aligns with the company culture.
It’s important in the interview process to take the time to really get to know a candidate. Ask them tough questions, share stories, answer their questions honestly, and encourage them to ask you questions to discover company culture. The best thing you can do is be honest about the environment, the work, the people, because if a candidate is mislead, hops on board, and discovers something they didn’t sign up for, they will probably jump off board just as quickly.
Startup is hiring never easy, that's why we're here to help! Check out our first article in this series on crafting great job descriptions for startup jobs, and stay tuned for our next one!
About the Authors
Marcus Fields and Allison Murdock are members of VentureNext, a professional peer group of rising venture capital investors who work with, manage, and run venture capital investment funds. VentureNext members are based across the country and united by an interest in investing in Midwestern companies. VentureNext members get access to monthly deal-flow calls, exclusive networking events, educational resources, and mentorship.
Marcus Fields is an Associate at RC Capital. He primarily works in his firm’s medtech practice which invests capital into growing medical device companies looking to expand its commercial footprint. Marcus has been pivotal in investing capital into several high-growth, high-tech companies to-date including Q’Apel Medical, Checkpoint Surgical, Standard Bariatrics, and SPR Therapeutics.
Allison Murdock is an investor at ID Ventures. Allison manages the fund’s pipeline, develops relationships with entrepreneurs, and leads due diligence on promising investment opportunities. Allison also leads the team’s FAM (Funding, Access and Mentorship) Program which supports underrepresented founders and founding teams of Michigan-based startups in the post-idea to early-MVP stage.