When venture capital investors seek companies they might want to invest in, they frequently look for some experience to fill out the management of these companies—experts who can be brought in to balance out the existing management team’s limited real-world management experience.
This is part of the ‘value add‘ they can bring as investors, providing talent in addition to capital, both to sweeten the deal and to improve the prospects of their own investment.
But what adds the most value: sector experience, technical prowess or a steady hand?
Something new?
When VCs look for additional experience to bring to existing operational teams, the talent they bring doesn’t always align with what might be the best fit. Usually they want to bring in a sector expert, somebody who is familiar with the relevant technology or someone who has references for the target market. They look niche.
This is classic VC behaviour. VCs love to invest in early-stage innovation companies and then sit around the board table urging the management team to bring in new people with the relevant niche expertise. But this isn’t always possible. Often a company is presenting a unique business proposition: something ‘new’. It could be that nobody will have the exact, point-by-point experience that relates to their particular scenario.
Experts who ‘get it’
What VCs really want, but aren’t always too great at articulating, is people who can come into the company, ‘get it’, and then very quickly use their knowledge and experience from similar business set-ups to execute whatever is needed.
For example, when a company brings in a marketing officer, they need somebody who can create and build a brand using the relevant marketing systems, supporting the company through the various stages of its journey—but not necessarily a marketer who is a specialist at the specific technology used by the client.
Instead, VCs and companies could be looking for experts in a more general sense: for example, problem-solvers with strong credentials and the ability to work fast. From a sector or category perspective, marketers need to demonstrate that they understand what drives a client’s category and be able to show affinity with their problem.
Deep knowledge
VCs should be looking for solutions from those with experience in multiple sectors, such that they know how to handle all kinds of different set-ups, situations and potential crises. This is how experts have the knowledge to quickly ‘get it’ and deliver real value.
More often than not, this means hiring people who are old bones, in a business sense—those who have the right experience to deliver a steady hand when it comes to big decisions. On the other hand, investors and companies should watch out for young guns claiming ‘fashionable’ expertise in super-specific areas. What matters more in steering a company is an industry expert who has ‘aged’ well and has the broad business acumen to get the job done.
Lance Hiley is a technology marketer working with The Marketing Centre, with 30 years’ experience of delivering crucial marketing and product plans across public, start-up and growth environments. Get in touch to discuss your marketing needs.