Startup to Scale-up: VC influence in executive placement

Austin Ogilvie

5 min readOct 16, 2023

Executive placement is one of few things VCs can help w/ apart from cash.

Execs weigh opportunity cost in startup or scale-up

Senior execs don’t jump from high-pay, high-prestige jobs to join small startups willy-nilly. No.

In fact, they put an incredible amount of thought and research into that kind of decision:

They talk to trusted investors and CEOs
They talk to customers of the company
They covertly go through the sales process
They spend time personally using product.
They meet w/ competitors and their customers to gain perspective.

They put in the work and often have a number of options to choose from.

VCs and the power of networks

Most good VCs are quite well-networked. Great ones spend a lot of time maintaining strong relationships and invest heavily in making valuable connections for their companies. The best VCs are total pros at manifesting valuable opportunities across their portcos via networks.

Say, for instance, a company is hiring a CTO or a CFO or a VP of marketing for the first time. Great VCs will recommend, refer, and introduce top candidates at the start of the search process. Equally, at the end of the process, great VCs often create incredible leverage sealing the deal once an offer has been extended.

Investors have unique perspective

Consider how unique and valuable an investor can be in getting a candidate excited and injecting a particular kind of confidence into a big career move:

They’ve invested a substantial amount into this biz with high conviction and after a lot of research. They are uniquely positioned to explain the commercial opportunity as they see it
They spent many tens or hundreds of hours getting to know the team, so they can attest to whatever ‘it’ factor sets this team apart.
And because investors look at hundreds of companies and have seen vastly more metrics and KPIs for comparison, their impressions on the strength of execution, growth rate, and traction relative to competition are considerably well-informed.

Influential, yes. But in which direction?

The messages (1, 2, and 3) can be highly influential in helping get senior leaders excited about joining a startup. When done the right way, that is.

Flip the coin around, and negative VC involvement can and does put risk on a candidate process all the same.

Even if details aren’t broadcast on twitter, word of negative interactions between an executive candidate and a particular investor gets around in a big way. Executives who are turned off or offended or got a bad vibe from an investor, they pass. And then they talk about it. A lot.

Trust me. I hear these stories regularly.

Example: when things go wrong

A two-time founder interviewing for a VP of sales role at a well-funded but barely post-revenue startup shared this anecdote with me just last week:

Context: the candidate previously started two companies and exited one to a big company where he ran a large sales team post-acquisition. He’s not actively looking for new roles but got to know this startup for the past year.

He’s a big fan of the founders and founding team and almost nobody is as close to or familiar with the space as he is. The startup really wants him to join to run their sales team. They’ve done a fantastic job getting him to lean-in, spend time learning about the biz and getting to know the team, and he’s seriously considering the opportunity.

So far so good, right? Well keep reading…

Whoopsie

As part of the process, he met with a “AAA VC” on the board. It did not go well.

Among this investor’s “useful” contributions:

Not having looked at the candidate’s LinkedIn beforehand
Having no awareness of how relevant the candidate’s prior startup (the exited one) to this investor’s portco (it was a fundmaker for several great VCs)
No familiarity with this startup’s target audience/customer let alone to this candidate’s notoriety with the same

We’re not done…there’s more:

This investor asked “Are you disappointed you didn’t read more about my background before this call?” To be sure, this investor isn’t exactly on the starting lineup. He’s more of a bencher that I suspect most, like me, had never heard of. Unclear to me what background there is to research exactly.

The candidate, of course, had many questions of his own. He asked about competitive dynamics and was met, strangely, with “you’re asking the wrong guy. I just know [the CEO] personally. I don’t know anything about the space.”

Surely competitive dynamics in the space would be among the top variables a high-commitment investor would have some opinion about.

I mean, c’mon. This is embarrassing.

Negative investor interactions harm portfolio companies

Arrogance, self-importance, looking down on others as though they are obviously unimportant. These are bad behaviors in any situation.

This particular investor seems like a real jerk to me.

But let’s set aside my own personal opinions and think purely from a practical and commercial perspective: this interaction was a train-wreck.

How many other hard-to-recruit people have been turned off like this? How deeply unproductive was this conversation towards recruiting an executive for a hard-to-fill role?

This VC single handedly set back–if not totally derailed–all positive progress this early-stage team had already made in getting this executive excited.

Why do I care to write about this?

I choose to tell this particular story not simply because of how cringe-worthy it is, but because it’s such a common trope. This happens all. The. Time.

If you poll a few thousand venture backed founders about challenges at various stages, the data will show that building the team is overwhelmingly the most important and most challenging part. Key hires change the game. Excellent culture leads to loyalty that often is the means of survival through inevitable periods of hardship that all startups go through. Great people are the magnets that attract other great people.

A VC blowing up a candidate process by focusing on their own self-promotion vs. promoting the company and energizing the candidate is the biggest of whoopsies. And to any VCs reading this: yes. You have teammates that do this kind of thing. And it has cost you.

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