Startup Foundations: Why Primary invests in people first
About a year ago, I received a call one Sunday afternoon. It was Ilir Sela, Founder of Slice, just one of NYC’s many hustling entrepreneurs who works round the clock to turn his vision into reality. Ilir’s story is a bit unusual among the startup crowd, having bootstrapped his business - a platform to help independent pizzerias better compete with big pizza chains - with no outside capital and having attained profitability by the time he set out to raise for the first time.
But Ilir had never run a big tech company, so when he started fundraising, he was looking for more than a source of capital; he needed a strategic partner to help him build a serious business. After an introduction to Primary Venture Partners through Wiley Cerilli, CEO and Founder of SinglePlatform, and now of Good Uncle, Ilir had learned of our reputation as very hands-on investors, committed to helping our portfolio companies navigate the inevitable hurdles of early startup life. We’re thrilled Ilir selected us as that strategic partner, and we’ve since dug in our heels on many fronts to help Slice achieve success.
When Ilir called me that Sunday, just a few days after he had closed his initial round, it was to discuss his most pressing issue: hiring. He had been running with just a handful of employees for some time, and had amassed a mountain of operational debt. Within a matter of a few weeks, we had introduced the Slice team to a number of outstanding folks from the NYC Tech community, and they made their first critical hires - including a CTO and CCO - from a talent pipeline they wouldn’t have been able to easily or quickly access on their own.
A company is only as good the people who live and work in it. As early-stage investors, Primary is a people-first organization. We believe that great businesses are built on their ability to attract, retain, and engage the absolute best talent in the marketplace. No matter how compelling the idea, a company won’t get anywhere without the right building blocks.
Unfortunately, startups at this stage never have the resources to hire a People Operations expert - someone who can help them codify what “culture” means and who can guide them strategically through foundational team building and org development. Given the importance of getting those first hires right, and the tendency of most early startups to prioritize product and go-to-market timelines over talent development, we at Primary committed, through our Talent Program, to pouring in as many resources as possible to help our companies avoid common early pitfalls and usher them to the next stage.
Driven by myself and another dedicated resource, our program goes well beyond the typical recruiting pipeline; it is a high-engagement support structure designed to provide our portfolio companies with the following:
- Hiring support for their first 5-15 people, and setting the foundation for more efficient, better-informed hiring decisions going forward.
- Access to strategic HR and talent acquisition advice - everything from performance development to competitive compensation.
- Unparalleled access to the sharpest minds in the city via our Primary Expert Network, a group of 200-plus operators established to give founders firsthand exposure to best practices across a broad range of functional areas.
Most of my time is spent with 4-6 portfolio companies over 6-9 months on average, working on whatever propels their business forward during that time. I sit on-site, get to know their people, and function as an extended part of their leadership team. By the time my term is done, the goal is to have properly taught them “how to fish”, arming founders and early leadership teams with the skills and strategies necessary for effective, long-term organizational and recruitment strategies. So far, this approach seems to be working; in 2016 alone, we saved our portcos close to $2 million in external agency fees, and facilitated close to 60 hires.
So what does Day 1 look like? When I first sit down with a portfolio company, my goal is to get a deeper understanding of the current team and set appropriate goals for the duration of our time together. In general, our conversation covers these points:
- Critical hiring
- Figure out what you’re good at and find both strong complementary skill sets and people who will push you to see new POVs.
- Study your existing team and evaluate what you have before you start endlessly chasing ideal LinkedIn profiles.
- Use business milestones to help define hiring needs.
- Learn how to balance selling versus interviewing.
- Talent infrastructure
- Define your company’s culture and create a talent brand that showcases those values.
- Train your team before hiring.
- Implement internal processes and tools to establish a collaborative hiring environment.
- Organizational development
- Set competitive compensation and equity approaches.
- Think about performance development and cultivating a feedback-oriented culture.
- Invest in what seems like common-sense management training.
These are the high-level themes that all startup leaders should consider as they start to build their foundational team. Stay tuned as we expand upon each of these core talent objectives over the coming months.