No six-figure finance hires without eight-figure run rates
It’s often said that the job of a startup CEO is to make sure there is cash in the bank and the right bums are in the right seats, but too many founders are keen to hire someone to handle those jobs as soon as the first VC wire clears. Don’t be so quick to delegate those responsibilities. Some of the most successful companies I know of are led by CEOs that held onto human resources and bookkeeping well beyond when their less successful peers did.
A few examples:
SeatGeek is fortunate to have investors like Eli Manning and Nas, but the celebrity mindset never seeped into senior management. Co-founder and CEO Jack Groetzinger raised over $100M dollars before he hired a full-time person to manage finances.
PillPack just recently crossed the 200 employee threshold and while they’ve hired some of the most forward thinking engineers, designers, and pharmacists there was no “HR department” until last month.
Chad Laurans bootstrapped SimpliSafe for eight years until he had over 100 employees. Though the company was doing tens of millions of dollars a year in sales, he didn’t hire someone to handle finance until the company raised $57M from Sequoia. Even now that the company has grown to over 200 people, if you visit their Boston headquarters you won’t find someone sitting at a front desk — you need to call the person you’re there to see if you want to get in the door.
Choose what you delegate carefully
These companies aren’t spendthrifts. Their offices are well appointed. All the standard startup perks are on offer. And these founders aren’t control freaks. They’re adept managers in charge of growing businesses and know how to delegate. But they’re also incredibly careful about what they choose to delegate.
PillPack didn’t push formal HR for years and as a result, the unique personalities of founders TJ Parker and Eliot Cohen have suffused the organization. SeatGeek founder Jack Groetzinger is a quant geek to the core and the act of staying on top of the balances has sharpened his insights into strategy. Chad Laurans’ lean example established a culture that no HR rockstar could replicate.
By all means hire a bookkeeper to help file taxes and ask an assistant to update your Trinet account with new hires, but you need less than you think. These companies are complex, and wildly successful, yet have remained scrappy and turned a prudent approach to hiring into a powerful advantage. And it’s an approach that scales — Larry Page reviewed every job offer Google made until at least 2014.
Don’t hire HR until you’ve got 100 people. Don’t make a six-figure finance hire until you’ve got an eight-figure run rate. These suggestions are too broad to be rules, but successful companies show they can be useful guidelines.