Recruiting Before, During, And After A Funding Round

Often, companies utilize funding rounds to generate interest in the open roles. It's a great way to gain traction and draw candidates who maybe wouldn't have considered your company while looking through their feeds.

Research shows that it can be a win-win for the candidate and the employer when done right. Candidates get to learn about an opportunity that might otherwise not have found them.

Stages of funding - The Series 

Pre-seed or Seed Funding

This is when you're just getting your company off the ground, so you'll probably be working with a small team and a small budget. You may need to consider outsourcing some work, such as IT support or content creation. Hiring an agency is always a good option if you can afford it.

Series A

At this point, you're going to want to think about creating a talent acquisition strategy that focuses on recruiting strong candidates who can handle more responsibility than those hired in earlier stages. 

You'll also want to consider hiring managers and leaders who will help mentor those newer to their jobs or roles and help them grow within the company.

Series B

You'll want to focus on roles that can help you expand your market share and scale faster. These roles may include sales and marketing executives who have experience working with companies like yours.

Series C, D, E

Companies need to maintain growth after a Series C funding round. This means they may want more capital to expand the company, remain private longer, and achieve goals and milestones outlined in previous rounds. 

Failure may result in a "down round" when a company raises capital at a lower valuation than its last funding round.

How to use the rounds of funding to generate interest in your open roles:

Before your funding round

The period before a funding round can be stressful. Do you have the right partners? Is your business plan complete? Are there any open items needed to be addressed?

One of the critical pieces that often gets overlooked is the recruiting plan. Many companies don’t think about their hiring needs until they close their round. But by then, it may be too late.

It is your responsibility to prioritize the roles that will help your company achieve its goals. If you wait until after your funding round, you may not have enough time to recruit for those roles and ensure that each position is filled with a quality hire by the end of the year.

How do you avoid this mistake?

Research what roles you need for the coming year

Talk with your internal stakeholders and figure out how many people they want to hire and what roles they want to fill. 

Once you have an idea of what roles need prioritization, start thinking about who should fill those roles and how long.

Many people think that a company’s success or failure hinges on its ability to secure funding. However, if your business cannot attract and retain talented employees, you're unlikely to succeed no matter how much funding you have.

You can attract talent by offering competitive salaries and benefits. But just before the funding round of your business, you will have some limitations on what you can offer. So your goal is to be as transparent as possible about those limitations upfront, so people know what they're getting into when they start working at your company.

During your funding round

There are certain times in the life of a company when it's imperative to be recruiting. One of those is during a funding round. 

When raising money, there are two main reasons to ensure that recruiting is a priority: hiring for roles aligned with investor expectations and getting ahead of your hiring needs.

First, when you're trying to raise funds, you're going to want to show investors that you will put their resources to good use by being able to hire the people who can help your business grow. This means knowing what new hires you'll need before you go into fundraising and knowing which roles will be crucial for moving the company forward. 

If something comes up during the fundraising process and your company is asked about a specific area of expertise or skill set, having someone already lined up will make all the difference.

Of course, part of recruiting is attracting and retaining new talent during this round. Be ready to pay your employees generously. Many companies are reluctant to pay their employees more than minimum wage until after receiving funding. 

You need to pay your employees as much as you're willing to take from investors. After all, money isn't everything—but it helps attract the right talent.

After the funding round

So you just closed your funding round, and now you want to hire the team that will take your company to the next level. 

A lot of change is coming your way, and it's going to be a crazy time as you adjust to managing a team and navigating new challenges. 

Here are some tips for making your hiring experience a positive one:

First, leverage the publicity from your funding round in everything you do. This is a big deal for potential hires. If they see that other people are excited about investing in your company, it increases their confidence in your ability to succeed. Ensure that enthusiasm is at the front and center of all your recruiting materials.

Second, grow your culture with your team. If you want to attract talent who will embody your company’s values, ensure those values are vital to your current employees first. 

You can also work on recruiting candidates with similar backgrounds or experiences as those already on staff—this creates a natural point of connection and can help candidates acclimate very quickly when they join the team.

Lastly, keep in mind the power of a diverse and inclusive workplace when making hiring decisions.

Conclusion

Funding rounds are a complicated, exciting, and essential part of growing a business. It's equally important to consider recruiting the right talent during this time. There's no reason why your business should limit you. Keep an open mindset about the benefits of hiring, and reach out to potential employees.