Adapt your Hiring Plan to Your Fundraising Stage: Recruiting Before, During, and After a Round

Hiring the right talent for your business comes with many considerations, and one of the most important factors is where you are with your startup fundraising.

Successful startups often go through several rounds of funding, and each one radically shapes how the business operates on multiple levels, including recruitment. Acquiring significant funding and venture capital can open up entirely new possibilities when it comes to locating, assessing, and hiring new team members, but it’s essential to understand your capabilities and what’s realistic at each point.

In this playbook, we’ll look at how you can adapt your hiring process to each stage of fundraising to optimize your recruiting, ensure you make the most of each phase, and maximize your chances of bringing on board the very best talent for your team.

Why should you adapt your hiring plan to each fundraising stage?

There are several reasons why you should tweak and adapt your plan according to your fundraising stage. Let’s take a look:

Your needs and priorities are different at each stage. For example, an early-stage startup awaiting its first round of funding doesn’t need to hire for a range of highly specialized positions — but each hire is more important, as they’ll likely need to wear multiple hats and be able to grow their teams over time. As funding increases, this will change.

Your abilities and resources change as funding grows. The average hire costs a company $4,000, so at earlier stages, your recruiting and hiring processes may be limited by budget. However, as you acquire more funding you’ll gain more capabilities when it comes to advertising positions, screening and interviewing, and bringing people on board.

You should always be focused on hiring, but you need to be realistic about what’s possible and what makes for an appropriate goal at any given point. Otherwise, you risk wasting valuable opportunities or overextending yourself too early.

How to adapt your hiring plan to each fundraising stage

Before a round of funding

Before a round of funding — especially an early round — your resources will likely be limited and you will be constricted when it comes to the hiring activities you are actually able to implement.

However, this doesn’t mean there’s nothing you can do. These early stages of the fundraising process are extremely important as an opportunity to prepare and plan for your future hiring activities. What’s more, intelligent hiring is arguably even more crucial at this point since your resources are limited and each decision is far more impactful.

Here’s what to do before a funding round.

Get a clear strategy in place. Set concrete goals for your hiring plan — both short-term and long-term — and make a roadmap to get there. Build flexibility into your strategy — be prepared to change course and adapt and avoid getting locked into one approach.

Be efficient with your hires. At this stage, you need to be careful with your resources. Focus on where talent is needed the most, and only hire when necessary to do so.

Focus on budget. More money will come when the round of funding is complete, so take advantage of this time to create a budget and ensure you are prepared and ready to go when funding arrives.

Invest in marketing and brand awareness. The early stages of funding are a great opportunity to focus on your marketing and establish a strong presence, so everything is in place to mount a successful hiring campaign as soon as you can afford it.

Harness the power of referrals. Referrals from your existing employees and other people in your network (like fellow business owners and entrepreneurs) are a great way to connect with potential talent at any stage. Prior to acquiring funding this is an especially powerful method, since it’s much cheaper than many other recruiting methods and can result in high-quality hires.

Grow your network and connect with potential employees even if you don’t have the means to hire them yet. Building relationships costs nothing and ensures you have a ready-made array of people to reach out to as soon as hiring begins. There are many ways to do this like engaging on social media platforms like Twitter and LinkedIn, attending industry events, and presenting at University careers events.

During a round of funding

As funding begins, it’s time to start the hiring process. At this point, you may still lack the budget to hire on all cylinders, but you now have a lot more certainty compared to the early stages and can start taking more concrete actions.

Put a hiring process in place. Decide on your outreach strategy, your interview process, key initiatives, and the metrics and milestones you’ll use as assessment criteria.

Ensure you have an onboarding strategy in place. Do you have the space, resources, and infrastructure to handle your hires? Are your current team members prepared for bringing potentially large numbers of new people on board and integrating them into the community?

Be agile. Things can change fast at this stage, so it’s important both to stay on top of developments and have the capability to change course and adapt rapidly to new circumstances.

Make DEI a priority. Ensuring your hiring process is diverse, equitable, and inclusive has many powerful short- and long-term benefits for your company. It’s best to focus on prioritizing DEI from the first stages of hiring. Find out more about how to do that.

After a round of funding is complete

Once funding is complete, your hiring activities can really begin in earnest for the first time. This is where you start to act on the plans you made earlier, funneling your newly acquired resources into finding, connecting with, and hiring new talent.

This stage will be very different from previous ones, for a number of reasons:

During later stages of funding like a Series A round, you may no longer be hiring to fill immediate needs — you now need to hire constantly, filling positions in anticipation of growth rather than reacting to current demands.

Hiring switches to a company-wide activity. At this stage, many companies establish dedicated teams and even departments to focus solely on recruitment, with their own processes and plans. Deciding when to do this is a personal choice, although there are some benchmarks you can use. Startup recruiter Heather Brouwer suggests that when hiring takes up more than 25% of the startup founder or CEO’s time, it’s time to hire a full-time recruitment expert.

You’ll need to consider expanding your hiring systems and processes as you grow. For example, applicant tracking systems and outsourced tech screening are examples of tools that can help you scale your hiring activities and handle a much greater volume of work.

You may decide to implement an employee referral program so your existing employees can help in the quest to bring the best new talent on board

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In this final stage, it’s likely that your entire recruitment system will change radically. There is a lot of work to do here, which is why it’s so important to plan and prepare thoroughly during the early stages of funding.

Most importantly, always remain adaptable. As a startup hurtles through the various stages of fundraising and into the next round, things can change quickly and you need the flexibility to adapt your plans and seize opportunities as they arise.

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