Many people assume that retained executive search is primarily used by global organizations to fill the C-Suite.  That might have been the case once, but it is certainly not true now, with many recruiters involved in executive search for startups.  In this blog from our friends at Stanton Chase International, Arto Sormunen talks about the key considerations associated with hiring a CEO in a startup context.

Arto highlights several points but probably the one that stands out to me is Corporate Governance.  When a business goes from led by a founder to a more professional management team led by a CEO, everything changes.  Arto talks about the structure of the board and senior leadership team and discusses how the different individuals interact with other stakeholders, including investors.

Startup firms is a phrase that can be used to describe a host of different types of businesses in various stages of development.  A key aspect of executive search for startups is ensuring that all involved in the recruitment process understand:

• The level of competition, but domestically and internationally
• Product maturity – is it market-ready?  This will have a significant impact on the skills required by any new CEO.
• Sales & Marketing – Many startups are developed by “techies.”  As Arto comments, many startups are weak in this area and so “sales competence and experience in sales process building either as a direct seller or reseller are highly valued in the new CEO.”
• Finance – Clearly, for many startups, the primary issue is cash.  Finding it, spending it, finding more.  The CEO needs to oversee this while continually dealing with current and future investors.

The blog goes on to discuss the likely competencies that will be required by the new CEO before moving on to compensation.  Compensation is more complicated in the startup scene for a host of reasons.  The CEO role is a new one, and so there is no prior data to act as a starting point.  The business may be loss-making and cash-burning – which means the ability to pay significant salaries might be a constraint – but the opportunity for the company might be huge, and so some form of equity stake is often brought in to the discussion.

A number of our clients at GatedTalent offer executive search for startups, and we’ll be sharing more blogs on this topic in the coming weeks.   Follow us on social media to ensure you don’t miss out!