December 19, 2000, 9:57 AM — Differ though they may over hiring criteria, one thing venture capitalists agree upon is that recruiting executive talent never has been as challenging as it is today.
With record amounts of venture capital fueling an equally unprecedented number of new companies, there simply aren't enough proven performers -- the ubiquitous person "who has done it before" -- to fill the executive rosters of high-tech start-ups.
"It's the expansion draft problem," says Bill Hulley of Adams Capital Management. "You go from 10 teams to 22 teams, and the talent pool doesn't expand as rapidly."
"I've been doing this for 21 years, and 1998 and 1999 have been the two most difficult," says high-tech executive recruiter Charles Potachi of Heidrick & Struggles/Fenwick Partners in Lexington, Mass. "It's taking longer to find good people.
"People want more," he says. "There's a free agency mindset. People who historically don't have the risk profile to be considered for a CEO or high-level executive slot are getting signing bonuses, guarantees. They have leverage because the most valuable commodity in a start-up is talent."
One way venture capitalists are coping with the talent shortage is to lure executives from big, established vendors, many of whom want to capitalize on the Internet economy, says Norwest Venture Partners' Promod Haque.
While hiring good talent will always be a difficult job, Hulley says the search process becomes a little easier if the venture firm targets the most promising markets.