Early-stage Recruitment Funnel + Hiring 101

For July’s Outlandish Speaker Series, Alex Camacho taught early-stage recruitment 101.

Watch the replay for all of his best practices for building successful early-stage teams or hit the highlights from our Q&A below.

Alex is the CEO and Founder of AC Consulting Group, a recruiting firm specializing in scaling early-stage venture-backed startups. He works directly with founders and functional leaders to fill their highest priority roles with the highest-quality talent in tech. Through his hundreds of hires for many dozens of tech startups via AC Consulting, Alex has seen just about every recruiting scenario a startup might find itself going through. 

Though most of Alex’s clients are Seed and Series A, he’s successfully worked with clients ranging from late-stage growth companies down to building Pre-Seed companies from scratch. His hires range from just about anything you can imagine an early-stage company would need— including non-tech roles like Head of Recruiting, VP Sales, VP Marketing, and many more—with a primary focus in engineering and product recruitment. 

Overview

Challenges of early-stage startup recruitment:

I’ve spent a lot of time in the early-stage recruiting space and have had the pleasure of working with some fantastic VCs and founders. The way I look at it is the future Zuckerberg’s and Musk’s are in this tech space, and I’m a huge believer and investor in technology because, of course, it’s the future. But focusing almost exclusively on early-stage startups’ recruitment comes with a unique set of challenges. 

First, it is extremely difficult for an early-stage startup with minimal notoriety to get responses to job postings. Second, a growing number of professionals—especially in the technical realm—just don’t reply to recruiters. Instead, they want to hear directly from the startup’s founder, which leads us to the third challenge: recruitment is a full-time, specialized job that founders do not have time for. 

And that’s where I come in. Using a dummy founder email address, I’m able to execute recruitment marketing campaigns to source and filter through candidates on behalf of the founder. Then, founding teams meet with the top candidates and—more often than not—invites them to join their early-stage team. Since I began recruiting this way, I’ve iterated and perfected my early-stage recruitment funnel method.

Best practices for structuring an early-stage startup recruitment funnel:

1. Create a broad, flexible profile of your ideal candidate with the goal of finding the highest number of viable leads. The keywords here are broad and flexible, meaning your profile is not rigidly set in specifics. For instance, I recommend being as language agnostic as possible. If the person doesn’t fit exactly what you’re looking for but seems really sharp, adaptable, and autonomous, then keep in mind that the ramp-up time to get them up to speed might be shorter than the time it takes to restart a search to find someone with the specific skillset already.
   • Example: Finding someone who already knows React could take months of additional recruitment versus the four to six weeks of ramp-up time for a candidate who is only familiar with modern JavaScript frameworks but is otherwise an excellent fit for the company.
2. Build email marketing campaigns that are short and compelling. Begin with 2-3 sentences that convey traction; leverage growth metrics, impressive VCs or employees involved, etc. that will make them think, “This is a startup I cannot miss out on.” Follow with your layman’s pitch, which should answer 1) What is the huge problem your startup is solving? and 2) How is your startup the best positioned to solve that problem? Keep it short (~800 characters or less) and avoid vague cliches that could apply to any startup.
3. Design your interview process to keep high-quality candidates engaged. Early-stage recruitment is a candidate-centric market, meaning the onus is on you to sell your startup to the high quality and in-demand candidate and not vice versa. Your ultimate goal is to convert somebody into a hire and feel good about what they’re bringing to the table.
   • Do: Prioritize a quick interview-to-hire timeline with in-person interviews. Sell them on your startup’s vision at every step of your interview process. Be honest about your strike prices, rough fair market value, and valuation.
   • Don’t: Add unnecessary obstacles to your interview process, i.e. preparation beyond asking them to show up. Assign take-home challenges unless absolutely necessary. Ask the candidate to sell you on why they want to work for your company.
   • An ideal interview process will more or less follow this pattern: a 20-30 minute introductory call with the candidate, an optional 30-60 minute technical screening, a 45-60 minute interview with 4-5 stakeholders, and an offer.
4. When closing the deal, remember that you are competing in a candidate-centric market to convert ideal candidates to employees. So make them an offer as soon as possible, and pay at a percentile that matches the percentile you want to recruit. High-quality candidates in the 99th percentile will be more expensive than the 50th percentile, and they’re going to have a lot more demand, so if you want to hire high-quality people, don’t pay the 50th percentile.

For more details on structuring your early-stage recruitment funnel, watch the replay of Alex’s live explanation of the funnel here [6m 49s].

Q&A

What is the one question you would ask above all others when hiring the first executive-level employee at a startup?

For candidates with a background in startups, I’d ask, “What is the best example of a time when you single-handedly changed the trajectory of a company that you work for?” and then push them for excruciating detail. They should be able to explain the impact top-down—a good executive person would understand their impact on everyone’s roles all the way down the line in low-level detail. 

For candidates without a background in startups, the first question may be less relevant. So instead, I’d ask them, “What was the most impactful thing you’ve done in your previous roles?” and then push them for the same level of detail as the first question.

In whatever way makes the most sense, dig into their previous experiences to learn what size/kind of impact they’ve made in their previous roles, how they did it, who helped them get there, and, ultimately, will they be able to recreate that impact? Will they be able to tackle major challenges, implement a plan, and then execute on it? Are they willing to roll up their sleeves? Do they need a team? You need to get a sense of how they functioned in previous roles and whether that function makes sense in the context of your company.

How much equity should we think about for early-stage hires, and do you think it’s necessary to include it in all hiring offers? 

In my opinion, you should give equity to everybody on your team. Even if it is just a few shares, it will make them feel bought into the startup’s success. As far as how much you give, that really depends on your valuation and the market value of the employee, i.e. their position and value-add to the company. 

Our most significant recruiting pain point is the competitive recruiting market. So how do we incentivize long-term retention?

People will retain themselves if your company does well, so treat your current employees well and hire good people around them. From a recruiting perspective, treating your team well means avoiding any stagnation of headcount and losing good team members unnecessarily. I always say, “Losing people based on compensation is very expensive.” If somebody wants $10K, $15K, or $20K more, and that makes you a little uncomfortable, trust me when I say that the people who work at your company want to see that potential for growth within the company. So paying current employees a little bit more to retain them will help you in the long run. 

So treat your current employees well, give refreshers, give raises, and grow your company! 

Our most significant recruiting pain point is finding executive leadership acumen with a startup operations mindset. So how do we find/connect to talent outside of Atlanta, such as recruiting from bigger markets like LA, SF, NY? 

I highly suggest building remote teams. The concentration of tech folks in the San Francisco market versus the next market down—such as New York, Seattle—and sub-markets like Austin, Denver, Portland, Boston, etc. is night and day. Plus, with remote learning becoming more and more accessible, the perfect fit could literally be anywhere. If you want to scale a technical startup, you need to look outside your local geo and figure out how to incentivize top-tier employees from top-tier markets.

I’m a little bit biased, but my advice would be to hire outside help to recruit from these markets. Beyond that, I’d suggest leverage your network—and especially your VCs networks—to find candidates from outside your geo that are worth the investment of recruiting and converting to hires.

What are the best practices for recruiting inside sales?

Find hustlers. Find somebody willing to grind and who is sharp and capable and has a chip on their shoulder. Somebody who is a little money motivated because, for inside sales, they’re going to need to be. In my opinion, try to hire someone right out of school who cares about growth and being the best at what they do. Hop on LinkedIn and shoot out some messages, then it should be easy to find folks who fit this personality.

What are the best practices for recruiting co-founders? 

It’s the same as recruiting anybody, but you need to spend a lot more time with them. Generally, the more senior the position, the more acceptable it is to have a more prolonged and intensive interview process. The standard interview process doesn’t apply to co-founder recruitment because you need to spend way more time with them and really get to know them. For example, my former co-founder spent like 20+ hours walking around the park and doing all kinds of stuff to get to know me better. This is the person who will be co-running your startup, aka your baby, with you, so you need to spend a lot of time getting to know them as a person before pulling the trigger. Ideally, you should probably consider potential co-founders that either you already know super well or someone you know and trust also knows and trusts them, too. 

For more expert advice on building and scaling your startup, check out our event library and Field Notes.