Hiring and Building Out Your Startup Leadership Team

There is a moment in time when many early stage startup founders realize their unique zones of genius aren’t best spent managing finance, overseeing payroll, or getting into the weeds managing every team member. More than just not being their zone of genius, often there is a business need to hire a senior leader who can bring their expertise to the team and up-level the business to another tier of maturity and success.   

One of the more common conversations I have with founders is around when the right moment is to bring on that senior executive hire so the founder can focus on their most impactful scope of work. 

As with almost everything, there isn’t one right answer. It is exceptionally dependent on pace of growth, size of team, complexity of the business, and so forth. Generally, when a company is around 25-50 people in size, we’ll see an initial core leadership team developing and from there, gaps are identified where certain executives are needed. 

Promoting internally versus hiring externally

You might find that some of these roles can be filled by people who are already on your team and are ready to level up. Likely, there will be a few leadership roles that you’ll be able to, and may want to, promote from within, and then a few where you should bring on that senior external experience that is lacking around the table today. 

Knowing what great looks like

As a founder, you likely feel like you’re always recruiting. And the fact is, you are. You are the most effective at inspiring and closing new candidates to join your team. Consider the leadership roles you’ll need to fill in the next 12-24 months. What responsibilities and strategies can – and should – they take off your plate and lead more impactfully than you are today?  

Start building a list of people or companies you think highly of. Then, ask your network to connect you with experienced leaders in the functional area you’re looking to fill. Schedule informational calls to gain a deeper understanding of the role’s responsibilities and the ideal candidate background. 

For example, to hire an exceptional CMO, you need to know what an exceptional CMO looks like in action. This will help you understand how to hire one and define what “exceptional” means for your team. 

Once you know what the “greats” look and sound like, you can develop your own hiring criteria and network to identify excellent candidates. This will allow you to form an informed – and more honest – opinion about what you’re looking for and recognize the right candidates during your own interview process.

When to partner with an executive search firm

After making the decision to hire a truly senior executive, most of the time it pays to hire an executive search firm. Begin by activating your network and asking for referrals. And if you really want to know who is out there – the best of the best – an executive search firm will be an exceptional partner in mapping the market, identifying top talent, and, importantly, managing a white glove experience for senior candidates. 

While contingency search firms may be less expensive, they are often more adept at finding talent with less experience than the executive level. Senior talent, on the other hand, likely won’t take calls with contingency firms. The executive search firms are likely to have existing warm relationships they can tap into to help you find the right person. Contingency firms also require much more hands-on management that likely you and your team don’t have the capacity to manage seamlessly.

What to expect from an executive search firm

When you partner with an executive search firm, they will handle research, vetting, initial interviews, scheduling, interview preparation, and the designing of the interview process and questions for you. They’ll also handle references, back channeling, and help with closing. 

Most of the time, contingency firms make the intro and the rest is up to you, whereas an executive search firm works on an exclusive retainer to find you senior leaders. They’re definitely pricier than contingency firms, and rightly so given the white-glove experience they will offer you as their client. Executive search firms will run your weekly meetings. They’ll conduct pre-interviews with all of the candidates and send you a dossier on each candidate with their overview, the pros and cons of each, and what to drill down on during interviews. 

Contracts with executive search firms typically guarantee that the firm will not work with any direct competitors during your search, so you don’t have to worry about your recruiter having any conflicts of interest when it comes to your candidates. 

Pricing for executive search firms

Many executive search firms will charge between $90-120K for an executive hire, which is often paid in thirds. The initial installment is paid at the beginning of the engagement, another installment midway through, and the third upon completion of the search – in many cases.

You do get what you pay for and working with an executive search firm is often the preferred path for scaling startups that are serious about making an executive hire that will have an outsized impact on the success of the business. Consider how expensive it can be to fire and replace a bad hire. It’s better to invest up front if you can and find an ideal fit that’s less likely to churn because you put in the money and time during the hiring process.

Successfully onboarding an executive

After making your leadership hire, the most important part of the process begins: successful onboarding and integration of a new senior executive into your team and business. You’ll want to be thoughtful about communicating expectations, behavioral norms, and establishing a strong relationship built on trust and transparency so you can move quickly and get this person to be effective as soon as possible. 

Often that can include onboarding touchpoints at 90 days, 120 days, and a year in with goals and expectations to establish a baseline of shared understanding of the role and its impact. While many of the onboarding metrics will likely be quantitative, you should also include qualitative organizational goals around team, trust, integration, and leadership. Over-index on regular meetings and touchpoints, especially during the first 90 days so you can share the organizational information and social capital with them that they’ll need to get up to speed as fast as possible. Expecting anyone to successfully onboard by themselves is a recipe for disaster. 

Your new leadership hire will need to have influence, respect, and their own social capital, and the easiest way for you to help with that is to lend some of your own credibility, as the founder, to give the new leader a chance of thriving. In the meantime, you’ll be assessing your new hires on their ability to learn, listen, adapt, and apply.

Many, many founders who have walked before you have led executive searches and have made successful executive hires. So if you’re struggling to figure out who to talk to in terms of understanding what great looks like, talk to other founders. They have gone through the journey, have seen what great candidates look like, and may even have suggestions for search firms or candidates themselves.

Madeline Minshew is True’s VP of culture. Having filled various people leadership roles at venture-backed companies prior to joining our team, she now helps the True Founder community think intentionally about designing their cultures, hire and manage high-performing teams, and level up their own leadership skills. Once you’re backed by True, Madeline is one of the many experts available to you on Team True.