From Spotify’s latest executive hire to Uber’s latest C-suite level departure, we are surrounded by news about management changes in the private markets, where fast-growing tech companies and their venture capital investors operate.
Big names like Uber and Spotify represent just a small corner of a market that is growing at a breakneck pace. Last year alone, venture capital activity increased by 17 percent globally, while investors allocated €300 billion to privately held companies in the EU, deploying 40 percent more capital than they did just a decade ago.
Each one of these new companies will likely increase headcount and expand their leadership teams as they mature and receive additional funding, which is why they are some of the most valuable clients out there. So how can executive recruiters gain a foothold with these high-growth companies?
Specialise by industry and geography
As information becomes more accessible and the economy grows, more and more recruiters—attracted by a low barrier to entry and potentially high commission—are looking towards the venture and startup space. To stand out in what is quickly becoming a crowded environment, many firms are specialising by geography or industry, focusing exclusively on tech or recruiting in tech-rich regions.
For example, say a London-based startup receives another round of funding and—to prepare for its next growth phase—its cofounders are looking to add a chief operating officer to the leadership team. Is it more likely to hire a generalist headhunter or a firm that specialises in placing top talent specifically within EU fintech?
By gaining industry and geographic expertise, firms can stand out from the competition, avoid commoditisation and better serve their clients. The difficulty, of course, is both developing that niche expertise and changing focus based on client needs or market shifts. After all, you might be an expert at placing candidates within fintech, but you still might need to quickly scale your knowledge of an emerging trend—like the rise of cryptocurrency, for example—to stay ahead of activity in your space.
Gaining expertise is a challenge, but one that can be overcome with data that offers a complete view of an entire industry or region: What are some emerging trends? Which companies are growing fast? What verticals are investors betting on? With both high-level and granular information on high-growth industries, startups, venture capitalist investment and more, executive recruiters can easily develop a valuable competitive advantage: niche knowledge of (and access to) the tech world.
Reach out to startups that need your services
With more capital readily available from investors and technology that helps companies get off the ground fast, the number of startups has increased exponentially. Although this leaves executive recruiters with a large sales pool, it also means that (no matter how many marketing automation tools they use or how many LinkedIn messages they send) they are likely contacting tens, if not hundreds, of startups before landing on a single viable prospect—perhaps only to learn that the startup is too small or running too lean to hire an external firm.
To successfully tap into the tech market, executive search firms need to prioritise their outreach. With PitchBook, they can reach out only to prospects that need their services by seeing which startups recently received financing—signs a company is growing and has capital to spend on hiring new employees and building leadership teams. Plus, PitchBook has contact information for 1.6 million entrepreneurs, founders, executives and other private market professionals, so executive search firms can get all the information they need in one place.
Whether they are gaining industry- or geographic-specific expertise or strategically reaching out to companies that need their services and have capital to spend, better data can help executive search firms service fast-growing startups. Does your firm have the data you need to tap into the tech market? Check out our guide to see.
