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What is the hiring strategy difference for a startup in different funding stages?

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What is the hiring strategy difference for a startup in different funding stages?
posted Jan 19, 2018 by Deepak Jangid

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Depends ENTIRELY on the company, and the funding structure at any given point.

At Enron Broadband, for instance, I had a $2B commitment and the full weight of a Fortune 50 company behind us from pretty much Day One. There was no "founder's pool" - just an employee option pool, which if I recall correctly was 10%. The most highly compensated individual was the first CEO, who got a full point. My hiring strategy was to hire everyone I knew that was really good and have them help me bring on everyone they knew that was really good. We were in a full-out sprint against six other companies trying to build big fiber and IP networks, which was our publicly acknowledged mission, and competing against a variety of startups creating what became known as content delivery networks, video on demand, broadcast quality real-time video streaming, and a commodity market for bandwidth.

Contrast with NewCross, where two founders had raised a Seed and were just closing Series A when I got there - the key need was to rapidly commercialize some intellectual property acquired from Telcordia. Thus, the strategy was to hire, on a fairly limited budget, the right people away from Telcordia -- where they were heavily compensated and "comfortable". The key was to hire to maximize the ability to further hire later on. Thus, hiring not quite enough people, but getting the "team leaders" - not from the perspective of the Telcordia org chart, but from the hearts of the team - was key. These guys got heavy option grants, slightly-below-market salaries with performance bonuses, excellent benefits, and the chance to take ideas they'd been working on and do something radically different with them

Series B was about scaling the team, which included adding sales and marketing functions, additional product managers, and of course, a lot more developers. These guys got less heavy option grants, at-market salaries, the same excellent benefits and opportunity to do something meaningful.

Series C was about go-to-market, we're broadening the reach was important, and that meant dedicated customer support. These guys got thinner option grants and were otherwise identical to the Series B hires.

Series D was a pivot, which meant hiring new classes of people with new skills to turn the ship and capture new customers off of pieces of the existing product while the dev team focused on re-shaping that into something more marketable. By this point, no one was thinking that options had a lot of value. Which, in this case, proved to be correct.

answer Jan 22, 2018 by Pratiksha Shetty