Where Can Startups Find Executive Talent?

Last Updated Mar 6, 2008 8:57 AM EST

Where Can Startups Find Executive Talent?One pitch entrepreneurs often hear from VCs and other investors is that they will help you find top talent for your organization.

This is only partly true. If you want a CEO or CFO, then, yes, your venture funding partners can help recruit top names. But if you are filling out other executive positions, it might be wiser to broaden your source list for recommendations.

That's the upshot of recent research on startup hiring by Harvard Business School professor Noam Wasserman, who studies entrepreneurial management. If you are in a new firm looking for talent, the numbers suggest you not put all your recruiting eggs in one basket.

In Wasserman's survey of 240 IT ventures, the primary sources for executive hires were the current or past CEO, 39%; a current non-CEO member of the management team, 29%; and investors such as VCs, 18%.

But it turns out the investor referrals were primarily for two positions: CEO and CFO. Wasserman finds that across almost all executive positions, "investors consistently served as the source for 10-18% of executives. The major exceptions were for the CEO and CFO positions, for which the percentages jumped to 28% and 30%."

Why don't investors play more of a role in management recruiting for their portfolio companies? One of Wasserman's blog commentators, a VC himself, suggests the primary reason: "The bottom line is that if a VC brings in the right CEO, the rest of the management hiring needs may be adequately taken care of by the CEO."

Another interesting question from the study. Why don't headhunters rate among the top three recruiting sources for start-up management hires? What do you think?

(Hiring image by madebytess, CC 2.0)

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.