Venture-backed startups are pressure vessels.
Investors are looking for rapid growth, market penetration, quick returns. They’ve risked it, they want the biscuit. Founders can’t just build companies at their own pace – they need to achieve the investors’ desired velocity. And investors tend to be speed demons.
One way to hasten success: rethink how you allocate your resources, particularly talent.
You need talented leaders. But do you need them for 40 hours a week? For most early-stage startups the answer is a resounding no.
Enter fractional hiring: a disruptive approach to leadership that’s turbocharging growth for venture-backed startups who dare to be different.
The velocity imperative
Venture funding comes with a neat little feature: the sound of a ticking clock.
The VCs have handed you a bag with a comically large dollar sign on the front. They’re expecting an even larger bag to be handed back, and sooner rather than later. They want quick wins. They want sustained performance. They want exponential growth.
It can sometimes feel like they want the world. You’ll often feel like you can only offer them an atlas.
One reason is traditional hiring, which can form a strong headwind in your quest for speed. Full-time leaders are expensive. Their hiring arrangements are clunky, chunky and inflexible. Often there simply isn’t enough work to justify a full-time hire.
Fractional leadership can switch that breeze around, turning a hiring headwind into a talent tailwind.
Fast, flexible leadership
Fractional leadership allows a startup to inject the precise amount of high-level expertise it needs, precisely when and where it's needed, minus the cost and inflexibility of long-term commitments.
On top of significant savings, fractional leadership offers:
- Instant expertise: Skip the learning curve and bring in battle-tested leaders who’ll hit the ground running.
- Unmatched agility: Short-term commitments allow you to rapidly adjust your leadership team as your startup evolves.
- Better capital allocation: Direct funds away from executive salaries to where they’re most needed: product development, GTM strategy.
- Risk mitigation: Enjoy lower organisational inertia to pivot faster when needed.
These benefits drive the results that VCs are looking for:
- Accelerated product iterations and reduced time-to-market
- The efficient and effective use of capital
- Faster adaptation to market feedback
- Enhanced market penetration
Fractional leaders can produce the tangible outcomes that drive up your valuation and lay the groundwork for successful funding rounds. A fractional CTO could slash development time. A fractional CMO could double customer acquisition.
In short, fractional hiring satisfies speed demon investors.
Areas of fractional focus
Where can a VC-backed startup inject fractional leaders? Short answer: anywhere they’re needed. Examples include:
- Go-to-market strategy: Bring in a fractional CMO to turbocharge your GTM strategy.
- Financial strategy: A fractional CFO can optimise your burn rate, and their hours can easily be increased when required, such as in the leadup to funding rounds.
- Scaling up tech: Fractional CTOs can fortify your systems to handle the hypergrowth you’re aiming for.
Once again, these guns for hire can directly impact the metrics investors care about: user acquisition, revenue growth, capital expenditure, tech scalability and more.
Overcoming investor scepticism
Despite the obvious perks, some investors may question the fractional approach. It’s new, not yet the done thing. Innovation can meet resistance before acceptance.
Counter with:
- Case studies of successful, fractionally-led startups. (Voilà.)
- Data on fractional cost savings and ROI. (Here you go. This too.)
- A clear plan showing how fractional leaders will drive key metrics.
Educate your investors on how fractional hiring perfectly aligns with their goals of rapid growth and efficient capital use. You could even flick them a link to this article.
Implementing fractional hiring
Your investors are on board. Now your task is to leverage fractional leadership and deliver the high-speed growth that you’ve promised. You need access to the right amount of the right expertise at the right time.
In very basic terms, you should:
- Identify your critical velocity bottlenecks.
- Identify the fractional leadership roles that will address those bottlenecks.
- Create a dynamic team structure that can evolve with your startup.
- Set aggressive, short-term objectives for each fractional hire.
While the concept is still in its infancy, fractional leadership is beginning to be recognised as a strategic advantage, particularly by forward-thinking VCs that understand the speed, agility and capital efficiency that it can drive.
The talent to achieve your need for speed
There’s a good reason why VCs are so obsessed with velocity. In startup land, speed is survival, because coming second can simply mean you’re the first loser.
Fractional hires can be the rocket fuel you’re looking for. And at Shepherd we supply that fuel.
If you’re ready to grow, we’re ready to help.
