HireLabs Perspective: The Leadership Talent
4
Increasing Returns by understanding Talent The VCs must ask themselves if their companies are run by management teams¹ that capable of driving companies as the recession bottoms. Studying the shift in the current unemployment rates in the US, HireLabs can forecast a recovery in the international labor market – lead by the US – sometime around Feb 2010. Very few CEOs of venture-backed companies have the experience of riding a company out of a recession successfully. The first sign that a management team is not performing at optimum is when market conditions are blamed for loss of productivity. The questions that investors should ask their management team is whether the competition was able to monetize on the opportunities in the given market conditions. Lesser experienced management teams have a tendency to fall prey to confusion when they see a decline in orders, leading to chaos. Our research suggests that of 64 management teams facing a financial crisis, 36 companies had line managers who reported a lack of corporate direction. From a standpoint of human behavior, this can be attributed to dissent amongst the management team. In such times, possible opportunities are missed as the team is preoccupied in solving personal differences. At this crucial time, if the VC has prior knowledge on the behavior of the team, the VC can use preventive measures ahead of time to secure their investments. VCs who are looking to capitalize on the market recovery should predominantly understand the teams that are running the companies, and assess the teams’ ability² to analyze market conditions and perform. Saleem Qureshi, President and COO, HireLabs Inc. ¹ Including CEOs with a clear understanding of the financial drivers of an organization. ² Across the board assessment programs will ensure competent workforce and leaders who can prove critical in long-term sustenance strategies. Understanding the talent is the key to capitalizing on a market recovery. VCs invest millions of dollars in companies, but do they really know the psychological profile of the talent that they are investing in? When VCs invest, they invest in the ability of a team to execute the business plan that is presented. Unfortunately VCs rarely understand the team’s ability to perform under various types of stress. These include unpredictable market conditions, as well as emotional pressures such as discontentment and jealousy. HireLabs | Perspective A HireLabs Inc. research report August 2009 The Leadership Talent – A must-have for VC firms HireLabs | Perspective VC Series 2.0
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Increasing VC returns by understanding Talent -The first sign that a management team is not performing at optimum is when market conditions are blamed for loss of productivity. The questions that investors should ask their management team is whether the competition was able to monetize on the opportunities in the given market conditions.Lesser experienced management teams have a tendency to fall prey to confusion when they see a decline in orders, leading to chaos. Our research suggests that of 64 management teams facing a financial crisis, 36 companies had line managers who reported a lack of corporate direction. From a standpoint of human behavior, this can be attributed to dissent amongst the management team. In such times, possibleopportunities are missed as the team is preoccupied in solving personal differences. At this crucial time, if the VC has prior knowledge on the behavior of the team, the VC can use preventive measures ahead of time to secure their investments....
Transcript of HireLabs Perspective: The Leadership Talent
Increasing Returns by understanding TalentThe VCs must ask themselves if their companies are run by management teamssup1 that capable of drivingcompanies as the recession bottoms Studying the shift in the current unemployment rates in the USHireLabs can forecast a recovery in the international labor market ndash lead by the US ndash sometime aroundFeb 2010 Very few CEOs of venture-backed companies have the experience of riding a company out of arecession successfully
The first sign that a management team is not performing at optimum is when market conditions areblamed for loss of productivity The questions that investors should ask their management team is whetherthe competition was able to monetize on the opportunities in the given market conditions
Lesser experienced management teams have a tendency to fall prey to confusion when they see a declinein orders leading to chaos Our research suggests that of 64 management teams facing a financial crisis36 companies had line managers who reported a lack of corporate direction From a standpoint of humanbehavior this can be attributed to dissent amongst the management team In such times possibleopportunities are missed as the team is preoccupied in solving personal differences At this crucial time ifthe VC has prior knowledge on the behavior of the team the VC can use preventive measures ahead oftime to secure their investments
VCs who are looking to capitalize on the market recovery should predominantly understand the teams thatare running the companies and assess the teamsrsquo abilitysup2 to analyze market conditions and perform
Saleem Qureshi President and COO HireLabs Inc
sup1 Including CEOs with a clear understanding of the financial drivers of an organizationsup2 Across the board assessment programs will ensure competent workforce and leaders whocan prove critical in long-term sustenance strategies
Understanding the talent is the key to capitalizing on a market recovery
VCs invest millions of dollars in companies but do they really know the psychological profile of the talent that theyare investing in
When VCs invest they invest in the ability of a team to execute the business plan that is presented Unfortunately VCsrarely understand the teamrsquos ability to perform under various types of stress These include unpredictable marketconditions as well as emotional pressures such as discontentment and jealousy
HireLabs| PerspectiveA HireLabs Inc research reportAugust 2009
The Leadership Talent ndash A must-have for VC firms
HireLabs | Perspective
VC Series 20
bull Does the CTO understand the business logicbull How frugal is the CFObull Does the COO understand how to handle the stress of people managementbull Does the CEO understand recruitment
By assessing the management team the VC can reduce the risk of its investment by implementing preventativemeasures as needed Understanding the talent is the key to capitalizing on a market recovery
VCs should assess their talent
Talent management forms a critical business function in the current economic climate
A companyrsquos talent includes everyone from the management down to the intern all of whom can either become thesavior or the bottleneck Talent assessment can provide measurable insight into a workforce The visibility will beunique in that it can
bull Reveal top performersbull Identify weak linksbull Identify critical-to-job success skill setsbull Intelligently provide measurable data
The quality of the management team drives exceptional business performance Talent management forms a criticalbusiness function in the current economic climate VCs who are currently using talent management systems with adedicated talent assessment tool stand a greater chance at enhancing value to their existing systems by improvingobjectivity in talent acquisition and retention
Since a recession-proof model is a myth VCs should secure their investments by understanding and predicting theirmanagementrsquos decision making process and provide guidance appropriately This will prove beneficial during boththe economic downturn as well as the rebound stage
What should VCs look for in their talent
To ride into recovery VC should assess their management teams for the following abilitiesbull Ability to collaborate and create revenue-share modelsbull Ability to be identify and purchase undervalued assetsbull Ability to expand their deal pipeline by going after the deals of competitors who are facing a liquidity crisis
Talent Assessments Lower Costs-Reduces time to hire-Reduces cost of hire-Decreases turnover-Increases retention through quality of hire
Talent Assessments Increase Productivity-Aligns core competencies- Metrics identification-Data points for reporting-Global benchmarks mirroring
Increasing the accuracy of your human capital valuations will improve your investmentperformance
In a presentation at the ABVCAP on April 16 2008 Kevin Thompson of Global Private Equity and Venture CapitalPractice rightly identified what Saleem Qureshi terms as critical factors in identifying core business modelssup3 of aventure prospect
Rarely the following questions are asked
HireLabs | Perspective
Since high growth prospect are entertained with enthusiasm at times the VC can overlook the management teamrsquosdynamics
- Understanding of new investment areas requires understanding of strong indigenous talent prior to acquisition- Today most deals are shopped thus leaving few opportunities for proprietary deals or getting ahead of the investorpack- Executive key attributes for driving performance vary from deal to deal
Needs Analysis- Consider alternate fee structures where both parties ldquoshare the riskrdquo of dealinvestment happening- Understand potential leadership needs ahead of investments- Establish new ways to capture and deploy talent beyond traditional executive hiring- Instigate talent mapping of future investment areas incorporating knowledge that is both published and that which isldquoungoogleablerdquo- Increasing the accuracy of your human capital valuations will improve your investment performance- Determine most viable method using executive search firm contacts to identify deals in prime investment sectorsahead of the general market
sup3 Since talent is key to determining any organization directional change to better manage it asustainable business model must be in place to acquire develop and retain key talent
VC money flowing into well-managed Talent Management companies
The market has seen a sudden influx of capital into companies that address talent management Saleem Qureshi hasidentified that as the market rides into recovery there will be opportunities in the talent management space Severalwell-managed companies such as SilkRoad and Trovix will be paid top dollar for future profits Other undervalued
the management team truly increases the valuation of the company
Funding and valuation will depend on the management teamrsquos vision and their ability to execute their business plan
Authoria a talent management solutions provider closed a fifth round of funding for $225 million in October 2007led by the maverick Tom Taulli other investors include Horizon Technology Finance Velocity Financial GroupMenlo Ventures Austin Ventures and Van Wagoner Capital Management
SilkRoad technology a provider of talent management solutions under the management of Andrew Filipowskirecently announced the successful close of $54 million in venture funding in May 2008 The round was led byFoundation Capital and Azure Capital Partners
Trovix a resume parsing technology under the management of Jeff Benrey was purchased by Monster for $725million in mid 2008
ItzBig also a resume parsing technology in contrast has seen its valuation drop to as low at $1million after thedeparture of Hank Stringer and Jim Hammock
Moving towards the SaaS Space
Savvy management is rapidly moving towards the SaaS space Brian Sommer CEO of TechVentive noted that
SuccessFactor and Taleo take an on-demand approach That is the technology is delivered via the Web which tendsto be cheaper and easier More importantly itrsquos a red-hot trend in tech as seen with Salesforcecom Inc (NYSECRM) and Taleo Corp (NASDAQ TLEO)
With a plethora of IPOs filings for on-demand software ndash which include companies like NetSuite ndash a similar demandfor SaaS will be seen
- Top talent is always of interest to Private EquityVenture Capital firms in sectors of choice (current and future)acquisitioninvestmentwhile fee structures restrict awarding assignments until after- At times traditional executive search is too slow for the hiring needs for Private Equity and Venture Capital firmsKey Issues
SaaS is king in HR talent management and other related solutions Companies like Authoria HireLabs
technologies such as the resume parsing company ItzBig can be picked up for pennies on the dollar This is the time
HireLabs | Perspective
No portion of this document may be produced in any form without the prior written approvalpermission of HireLabs Inc
wwwhirelabscom
All productsservices names providers and solutions mentioned herein may be the trademarks of their respective owners
Copyright copy HireLabs Inc 2008 All rights reserved
16504925007 USsupporthirelabscom
workforce developmentbuilt over the last 9 years and built a highly scalable technology which is currently provided as a SaaS solutions forHireLabs is a talent assessment company that grew out of Stanford University It has used itrsquos intellectual property
Sigma He holds a number of patents in the quantification of human behavior His techniques of pairing and matching
About Saleem Qureshi
Mr Qureshi a serial entrepreneur devised a methodology of quantifying human behavior through a process of Six
About HireLabs Inc
Sigma in building intelligent systems to predict human behaviorFilms and HireLabs Mr Qureshi conducted research in cellular biology His interests reside in using concepts of Sixstrong background in operations and finance has earned him a seat on the Board of Directors of Medicove Intelligentand government agencies that are looking for an integrated human resource solution to better manage their talent His
have been used in talent identification and at leadership development programs at organizations including
HireLabs | Perspective
LeadershipDNA where he served as Vice Chairman He recently developed the lsquo iHRrsquo concept for institutional clients
bull Does the CTO understand the business logicbull How frugal is the CFObull Does the COO understand how to handle the stress of people managementbull Does the CEO understand recruitment
By assessing the management team the VC can reduce the risk of its investment by implementing preventativemeasures as needed Understanding the talent is the key to capitalizing on a market recovery
VCs should assess their talent
Talent management forms a critical business function in the current economic climate
A companyrsquos talent includes everyone from the management down to the intern all of whom can either become thesavior or the bottleneck Talent assessment can provide measurable insight into a workforce The visibility will beunique in that it can
bull Reveal top performersbull Identify weak linksbull Identify critical-to-job success skill setsbull Intelligently provide measurable data
The quality of the management team drives exceptional business performance Talent management forms a criticalbusiness function in the current economic climate VCs who are currently using talent management systems with adedicated talent assessment tool stand a greater chance at enhancing value to their existing systems by improvingobjectivity in talent acquisition and retention
Since a recession-proof model is a myth VCs should secure their investments by understanding and predicting theirmanagementrsquos decision making process and provide guidance appropriately This will prove beneficial during boththe economic downturn as well as the rebound stage
What should VCs look for in their talent
To ride into recovery VC should assess their management teams for the following abilitiesbull Ability to collaborate and create revenue-share modelsbull Ability to be identify and purchase undervalued assetsbull Ability to expand their deal pipeline by going after the deals of competitors who are facing a liquidity crisis
Talent Assessments Lower Costs-Reduces time to hire-Reduces cost of hire-Decreases turnover-Increases retention through quality of hire
Talent Assessments Increase Productivity-Aligns core competencies- Metrics identification-Data points for reporting-Global benchmarks mirroring
Increasing the accuracy of your human capital valuations will improve your investmentperformance
In a presentation at the ABVCAP on April 16 2008 Kevin Thompson of Global Private Equity and Venture CapitalPractice rightly identified what Saleem Qureshi terms as critical factors in identifying core business modelssup3 of aventure prospect
Rarely the following questions are asked
HireLabs | Perspective
Since high growth prospect are entertained with enthusiasm at times the VC can overlook the management teamrsquosdynamics
- Understanding of new investment areas requires understanding of strong indigenous talent prior to acquisition- Today most deals are shopped thus leaving few opportunities for proprietary deals or getting ahead of the investorpack- Executive key attributes for driving performance vary from deal to deal
Needs Analysis- Consider alternate fee structures where both parties ldquoshare the riskrdquo of dealinvestment happening- Understand potential leadership needs ahead of investments- Establish new ways to capture and deploy talent beyond traditional executive hiring- Instigate talent mapping of future investment areas incorporating knowledge that is both published and that which isldquoungoogleablerdquo- Increasing the accuracy of your human capital valuations will improve your investment performance- Determine most viable method using executive search firm contacts to identify deals in prime investment sectorsahead of the general market
sup3 Since talent is key to determining any organization directional change to better manage it asustainable business model must be in place to acquire develop and retain key talent
VC money flowing into well-managed Talent Management companies
The market has seen a sudden influx of capital into companies that address talent management Saleem Qureshi hasidentified that as the market rides into recovery there will be opportunities in the talent management space Severalwell-managed companies such as SilkRoad and Trovix will be paid top dollar for future profits Other undervalued
the management team truly increases the valuation of the company
Funding and valuation will depend on the management teamrsquos vision and their ability to execute their business plan
Authoria a talent management solutions provider closed a fifth round of funding for $225 million in October 2007led by the maverick Tom Taulli other investors include Horizon Technology Finance Velocity Financial GroupMenlo Ventures Austin Ventures and Van Wagoner Capital Management
SilkRoad technology a provider of talent management solutions under the management of Andrew Filipowskirecently announced the successful close of $54 million in venture funding in May 2008 The round was led byFoundation Capital and Azure Capital Partners
Trovix a resume parsing technology under the management of Jeff Benrey was purchased by Monster for $725million in mid 2008
ItzBig also a resume parsing technology in contrast has seen its valuation drop to as low at $1million after thedeparture of Hank Stringer and Jim Hammock
Moving towards the SaaS Space
Savvy management is rapidly moving towards the SaaS space Brian Sommer CEO of TechVentive noted that
SuccessFactor and Taleo take an on-demand approach That is the technology is delivered via the Web which tendsto be cheaper and easier More importantly itrsquos a red-hot trend in tech as seen with Salesforcecom Inc (NYSECRM) and Taleo Corp (NASDAQ TLEO)
With a plethora of IPOs filings for on-demand software ndash which include companies like NetSuite ndash a similar demandfor SaaS will be seen
- Top talent is always of interest to Private EquityVenture Capital firms in sectors of choice (current and future)acquisitioninvestmentwhile fee structures restrict awarding assignments until after- At times traditional executive search is too slow for the hiring needs for Private Equity and Venture Capital firmsKey Issues
SaaS is king in HR talent management and other related solutions Companies like Authoria HireLabs
technologies such as the resume parsing company ItzBig can be picked up for pennies on the dollar This is the time
HireLabs | Perspective
No portion of this document may be produced in any form without the prior written approvalpermission of HireLabs Inc
wwwhirelabscom
All productsservices names providers and solutions mentioned herein may be the trademarks of their respective owners
Copyright copy HireLabs Inc 2008 All rights reserved
16504925007 USsupporthirelabscom
workforce developmentbuilt over the last 9 years and built a highly scalable technology which is currently provided as a SaaS solutions forHireLabs is a talent assessment company that grew out of Stanford University It has used itrsquos intellectual property
Sigma He holds a number of patents in the quantification of human behavior His techniques of pairing and matching
About Saleem Qureshi
Mr Qureshi a serial entrepreneur devised a methodology of quantifying human behavior through a process of Six
About HireLabs Inc
Sigma in building intelligent systems to predict human behaviorFilms and HireLabs Mr Qureshi conducted research in cellular biology His interests reside in using concepts of Sixstrong background in operations and finance has earned him a seat on the Board of Directors of Medicove Intelligentand government agencies that are looking for an integrated human resource solution to better manage their talent His
have been used in talent identification and at leadership development programs at organizations including
HireLabs | Perspective
LeadershipDNA where he served as Vice Chairman He recently developed the lsquo iHRrsquo concept for institutional clients
- Understanding of new investment areas requires understanding of strong indigenous talent prior to acquisition- Today most deals are shopped thus leaving few opportunities for proprietary deals or getting ahead of the investorpack- Executive key attributes for driving performance vary from deal to deal
Needs Analysis- Consider alternate fee structures where both parties ldquoshare the riskrdquo of dealinvestment happening- Understand potential leadership needs ahead of investments- Establish new ways to capture and deploy talent beyond traditional executive hiring- Instigate talent mapping of future investment areas incorporating knowledge that is both published and that which isldquoungoogleablerdquo- Increasing the accuracy of your human capital valuations will improve your investment performance- Determine most viable method using executive search firm contacts to identify deals in prime investment sectorsahead of the general market
sup3 Since talent is key to determining any organization directional change to better manage it asustainable business model must be in place to acquire develop and retain key talent
VC money flowing into well-managed Talent Management companies
The market has seen a sudden influx of capital into companies that address talent management Saleem Qureshi hasidentified that as the market rides into recovery there will be opportunities in the talent management space Severalwell-managed companies such as SilkRoad and Trovix will be paid top dollar for future profits Other undervalued
the management team truly increases the valuation of the company
Funding and valuation will depend on the management teamrsquos vision and their ability to execute their business plan
Authoria a talent management solutions provider closed a fifth round of funding for $225 million in October 2007led by the maverick Tom Taulli other investors include Horizon Technology Finance Velocity Financial GroupMenlo Ventures Austin Ventures and Van Wagoner Capital Management
SilkRoad technology a provider of talent management solutions under the management of Andrew Filipowskirecently announced the successful close of $54 million in venture funding in May 2008 The round was led byFoundation Capital and Azure Capital Partners
Trovix a resume parsing technology under the management of Jeff Benrey was purchased by Monster for $725million in mid 2008
ItzBig also a resume parsing technology in contrast has seen its valuation drop to as low at $1million after thedeparture of Hank Stringer and Jim Hammock
Moving towards the SaaS Space
Savvy management is rapidly moving towards the SaaS space Brian Sommer CEO of TechVentive noted that
SuccessFactor and Taleo take an on-demand approach That is the technology is delivered via the Web which tendsto be cheaper and easier More importantly itrsquos a red-hot trend in tech as seen with Salesforcecom Inc (NYSECRM) and Taleo Corp (NASDAQ TLEO)
With a plethora of IPOs filings for on-demand software ndash which include companies like NetSuite ndash a similar demandfor SaaS will be seen
- Top talent is always of interest to Private EquityVenture Capital firms in sectors of choice (current and future)acquisitioninvestmentwhile fee structures restrict awarding assignments until after- At times traditional executive search is too slow for the hiring needs for Private Equity and Venture Capital firmsKey Issues
SaaS is king in HR talent management and other related solutions Companies like Authoria HireLabs
technologies such as the resume parsing company ItzBig can be picked up for pennies on the dollar This is the time
HireLabs | Perspective
No portion of this document may be produced in any form without the prior written approvalpermission of HireLabs Inc
wwwhirelabscom
All productsservices names providers and solutions mentioned herein may be the trademarks of their respective owners
Copyright copy HireLabs Inc 2008 All rights reserved
16504925007 USsupporthirelabscom
workforce developmentbuilt over the last 9 years and built a highly scalable technology which is currently provided as a SaaS solutions forHireLabs is a talent assessment company that grew out of Stanford University It has used itrsquos intellectual property
Sigma He holds a number of patents in the quantification of human behavior His techniques of pairing and matching
About Saleem Qureshi
Mr Qureshi a serial entrepreneur devised a methodology of quantifying human behavior through a process of Six
About HireLabs Inc
Sigma in building intelligent systems to predict human behaviorFilms and HireLabs Mr Qureshi conducted research in cellular biology His interests reside in using concepts of Sixstrong background in operations and finance has earned him a seat on the Board of Directors of Medicove Intelligentand government agencies that are looking for an integrated human resource solution to better manage their talent His
have been used in talent identification and at leadership development programs at organizations including
HireLabs | Perspective
LeadershipDNA where he served as Vice Chairman He recently developed the lsquo iHRrsquo concept for institutional clients
No portion of this document may be produced in any form without the prior written approvalpermission of HireLabs Inc
wwwhirelabscom
All productsservices names providers and solutions mentioned herein may be the trademarks of their respective owners
Copyright copy HireLabs Inc 2008 All rights reserved
16504925007 USsupporthirelabscom
workforce developmentbuilt over the last 9 years and built a highly scalable technology which is currently provided as a SaaS solutions forHireLabs is a talent assessment company that grew out of Stanford University It has used itrsquos intellectual property
Sigma He holds a number of patents in the quantification of human behavior His techniques of pairing and matching
About Saleem Qureshi
Mr Qureshi a serial entrepreneur devised a methodology of quantifying human behavior through a process of Six
About HireLabs Inc
Sigma in building intelligent systems to predict human behaviorFilms and HireLabs Mr Qureshi conducted research in cellular biology His interests reside in using concepts of Sixstrong background in operations and finance has earned him a seat on the Board of Directors of Medicove Intelligentand government agencies that are looking for an integrated human resource solution to better manage their talent His
have been used in talent identification and at leadership development programs at organizations including
HireLabs | Perspective
LeadershipDNA where he served as Vice Chairman He recently developed the lsquo iHRrsquo concept for institutional clients
