Executive search for VC-backed companies
The search itself is not very different. What is different is that the decision is not the founder's alone, the package has a component the board controls, and the person being hired will be reporting to people who were not in the interview. Ignoring any of those is how an accepted offer falls apart in week three.
The UK market charges 25 to 33 per cent of first-year salary for retained search and 15 to 25 per cent for contingency. What sits inside that number is set out openly, which is unusual in this market and deliberate.
What changes when the buyer is VC-backed companies
The board is a decision-maker and should be one from the start
If a board seat has approval rights over an executive appointment or its equity grant, that is a step in the process rather than a formality at the end. The failure mode is a founder running a clean search, choosing a candidate, and discovering the grant needs approval at a meeting three weeks away while the candidate holds another offer. Put the board's involvement in the timeline at kickoff.
The option grant is negotiated with people who are not in the room
Pool size, strike price, vesting, acceleration on a change of control and whether there is an exercise window worth having are all live questions for a senior candidate, and several of them are governed by documents the founder did not write. Know the answers before the first approach. A candidate who senses the equity conversation is improvised discounts the whole offer.
Investor references are an asset, and they cut both ways
A backer's network shortens a search and lends credibility, and it also means a candidate can reference the company as easily as the company references the candidate. Assume anyone serious will call a founder in the portfolio. That is a reason to be honest in the process rather than a reason to avoid the network.
The hire inherits a reporting cadence nobody mentions at interview
Monthly board packs, investor updates, a data room kept current, and metrics defined the way the last round defined them. A first-time executive from a large company may never have carried this and will not realise it is part of the job. Say it out loud in the process: it is a real part of the week and it filters candidates usefully.
The process, where it differs
Founder and board agree the scope, the band and the grant range before anybody is approached, so the offer does not need renegotiating after acceptance.
The market at that package, including whoever the investors would put forward, assessed on the same standard as everybody else rather than waved through.
Direct approach, with the funding position and the runway stated plainly rather than discovered in diligence by the candidate.
Against the written scope, with at least one board member meeting the final two, because they are part of the decision anyway.
Grant approved on a timeline that fits the candidate's decision, not the board calendar's convenience.
What to ask a search firm
- Who has to approve this appointment and this grant, and when do they next meet?
- What is the pool, the strike and the vesting, and who can answer on acceleration?
- Which of our investors would you approach, and how would you assess anyone they put forward?
- What does the board expect to see from this person in the first two quarters?
- Have you placed into a portfolio company for this fund before, and how did it go?
Where it goes wrong
- Running the search to offer and then discovering the grant needs board approval
- Treating an investor introduction as pre-qualified rather than assessing it properly
- Leaving the reporting cadence out of the brief and surprising the hire in month one
- Describing the runway optimistically to a candidate who will see the real number in week two
When a search is the wrong instrument
If the round has not closed, a permanent senior hire is a commitment against money that does not exist yet, and candidates can tell. Fractional cover until the wire lands is the honest version, and it costs less than an offer withdrawn.
Common questions
Do investors usually pay for or influence the search?
Influence is common and payment is not. Many funds keep a talent function and will introduce candidates at no cost, which is genuinely useful and is not the same as a search. Whoever pays, the assessment standard should be the same for a fund introduction as for anybody else.
What does executive search cost for a VC-backed company?
The same UK market range as anywhere else, 25 to 33 per cent of first-year salary for retained work, 15 to 25 per cent for contingency. Being venture-backed changes the process and the approvals rather than the price.
Should the board meet candidates?
At least one board member should meet the final two, for the practical reason that they are part of the decision and the hire will be reporting to them in effect. Introducing the board only after an offer is accepted turns a supporter into an obstacle.
Permanent, or the part-time version first
Retained search runs a full-time appointment end to end. Operator Search answers the same brief fractionally in five business days, which is usually the faster way to find out whether the seat is real. Or browse the bench and approach somebody direct at no cost.