Using Investors to Find the Ideal Startup Job

TL;DR: If you want to work at a startup, email a VC or angel investor and ask them for company recommendations. Because of the well-aligned incentives between investors, founders, and job seekers, investors are a great resource for finding the perfect job.

Caveats

This post is about incentive structures for various job-search assistants (friends, external recruiters, and investors). In any industry, whether recruiting or investing, there will be bad players who only care about maximizing personal gain, and good players who will do the right thing even if it runs counter to their financial incentives. That said, I do think investors have better aligned incentives for recruiting than other alternatives.

Finding Jobs through Friends

Pros:

  • A friend can vouch for you, which makes your job application significantly stronger.

  • A friend has your best interests in mind, not just their employer’s, which means they will help you avoid a poor fit.

Cons:

  • Each friend works at a single company, which means they don’t know if their company is the best fit for you, only whether or not it’s a good fit.

Finding Jobs through (External) Recruiters

Pros:

  • A recruiter will do their best to find you a job because they only get paid if you find a job.

  • A recruiter can recommend multiple companies for you to work at.

Cons:

  • A recruiter probably doesn’t have in-depth knowledge about the companies they’re recommending (in my experience, this can vary based on the recruiter).

  • A recruiter’s compensation is based on maximizing their commission per unit of effort, so they’re incentivized to recommend companies that: 1) pay higher commissions, 2) make hiring decisions quickly, 3) are more likely to give you an offer (even if the position isn’t what you really want), and 4) are more likely to have you accept the offer (maybe because the the job is a good fit, but maybe because it’s a bad fit but pays very well or because the company is good at hyping up its job openings).

  • A recruiter gets paid for each position they fill, so they might funnel many candidates to a single job opening, which increase your competition for each job.

Finding Jobs through Investors

Pros:

  • An investor typically works with at least a handful of companies, and they meet with many, many more. If an investor knows your skills and interests, they can make a well-tailored recommendation based on their knowledge of what each company needs and what kind of projects each company is working on.

  • An investor is incentivized to make good referrals to companies. Making bad recommendations hurts the investor’s reputation and relationship with a founder, while making good recs improves both.

  • An investor is incentivized to make good recs to a job seeker because if the rec works out, the investor might have the chance to place the same person at another portfolio company in a few years, or that person might start their own company (and would hopefully want to work with the investor).

  • An investor wants to help all of their companies, but especially the ones performing the best. Let’s say an investor acquired 5% of two companies when they were valued at $5m, and now one company is worth $10m and the other is worth $50m. If a key hire would increase a company’s value by 10%, the investor would prefer to help the company worth $50m.

  • An investor often understands job openings better than a recruiter. I chat with most companies in my portfolio at least once a month. If you ask me which one has the best data mining opportunities, I’ll have a pretty good idea of whom I’d recommend, and I can even talk about the types of projects you might work on at a company. In my experience, that’s rarely been the case for external recruiters.

Perceived cons that are not actually cons:

  • An investor will typically recommend their portfolio companies over non-portfolio companies. However, it’s more important for an investor to make good recs and build/strengthen relationships than to make shitty recs. I’d much rather introduce you to a company I didn’t invest in that you’d love, than introduce you to a company I did invest in that you’d hate. Furthermore, investors recommend their portfolio companies not just to be self-serving, but because they genuinely believe those are the best companies around. That’s why they invested their capital (and reputations) in those companies in the first place.

Cons

  • High bar for getting introduced to a company. Investors don’t want to waste your time or a founder’s time.

  • Investors are incentivized to help the companies where they have the biggest stake, because helping those companies has a bigger impact on fund returns. Most investors seek a similar sized initial stake in each company, but some do not. As mentioned above, this incentive can be a pro (because recommendations will skew toward more successful/faster growing companies), but it can be a con, too.

A lot of people have observed that it’s hard to get in touch with a VC without a warm intro. A small perk of using investors as recruiters is that getting in touch is much easier. Instead of asking for something (“will you fund my company?”), you’re offering something (“do you want to help one of your portfolio companies and increase your portfolio’s value?”). In the process, you are also establishing relationships that can help you in the future if you’re looking for work again, or if you eventually decide to start your own company.

How do you pick which investors to talk to?

Look for investors who focus on areas that you’re interested in. Want to work on big data infrastructure? Talk to Data Collective. Interesting data mining? Try IA Ventures or Susa Ventures (my fund). B2C? Maveron. Hardware? Root Ventures. Moonshots? DFJ. eCommerce? Cowboy Ventures. Democratizing access to technology and information? Homebrew. And so on.

(Each focus area above has many more investors you can talk to, and each investor mentioned above invests in multiple areas. These are just examples.)

How does the process work?

I don’t know how it works with other investors, but here’s how it would work with me:

  1. You get introduced to me through a mutual friend, or send me a cold email.

  2. We chat on the phone for 15-20 minutes, which consists of brief personal intros, after which you tell me a little about your background and your interests, and maybe the 1-2 biggest professional accomplishments that you have to date. I’ll then ask some questions about your ideal job: what size company do you want to work at? What verticals interest you? What would your ideal role be? What kind of culture are you looking for?

  3. Within a day or two, I’ll send you a list of 3-5 companies that I think you might like, along with notes explaining why you might like them. If you want to talk to some of those companies, I’ll introduce you; if you aren’t interested in any of the companies, that’s fine, too. My recs tend to come from my portfolio, but I’ll recommend other interesting companies as appropriate.

What’s the catch?

The one catch, which was already mentioned above, is that you have to be good at what you do. My goals are to help you (so that you want to ask me for job recs or funding or whatever else in the future) and to help my portfolio companies (so that they like me, refer their other founder friends to me, let me invest more in their future rounds, and so on). If you’re not a good fit for the companies I know about, I won’t want to waste your time or the founders’ time (but you’re still welcome to apply to companies independently if you really want to).

So if you’re a (good) marketer or engineer or salesperson or __ who wants to work at a startup, email a VC or angel investor. Chances are you’ll learn about some interesting opportunities that you might not have discovered otherwise.