CapitalG’s Growth Profiles series spotlights difference-makers such as our talent partner, Lauren Illovsky. Read on to learn how Lauren helps the fast-growing companies we invest in fine-tune their executive talent strategies, why startups should be willing to invest in recruiters, the importance of proactively reviewing employee compensation, and more.
What is your role at CapitalG, and what did you do previously? What motivated you to join the VC world?
Lauren: As a talent partner, I work with our portfolio companies on their executive hiring, their organizational development, and building their boards. My work kicks off with them from the moment we make the initial investment until they exit in some capacity. This period can last several years and typically involves periods of intense growth at all levels of the organization. I help them hire executives capable of leading their transition from growth stage startup to a publicly-traded company. This typically involves encouraging them to add independent board directors, build out their C-suite and VP layers, and develop the processes and team necessary to scale their talent acquisition efforts.
When I’m not actively engaging with our portfolio companies, I spend the rest of my time building out our executive network to make sure we know the stars and rising stars of the tech world in areas like leadership development, People Operations, engineering and product. These individuals often become key members of the CapitalG ecosystem for the long haul in the form of executive hires, new customers, or expert advisors for our portfolio companies.
As for my history working in VC, I’ve been in it for several years, having worked at both Andreessen Horowitz and Accel. I joined Alphabet in early 2020 and officially came over to the CapitalG team in 2021. Earlier, I cut my teeth on the executive search side at Spencer Stuart, a global search firm that works across all industries. I learned from some of the best search partners in the TMT (technology, media, and telecom) practice and worked with VC-backed companies, public companies, and private companies in emerging markets. At the time, in 2011- 2012, executive search hadn’t become as large in the VC world as it is today, and I absolutely loved it.
While working at Spencer Stuart, I was introduced to the team at Andreessen Horowitz where I fell in love with the industry and the talent partner role. I haven’t looked back since.
Beyond relevant experience, how do you go about matching up talent (executives and board members) with companies? How much does “culture fit” play a role in these decisions?
Lauren: Ultimately, a great executive who wants to find a fit at a company like Expel or MANTL needs to talk directly with those companies. My role is to get to know the executives more personally as an introduction to CapitalG and our portfolio companies. My goal is to be the first call when an executive thinks about her next career move, first board seat, or anything else that is keeping her up at night. These conversations will always feel casual because real relationships are built when the transactional pressure is removed.
For example, I just spoke to a top CRO (Chief Revenue Officer) candidate, and we talked about where he grew up, where his son is going to play Division 1 baseball next year, and what his goals are for his next role. I want to know about the person and feel their chemistry. I want to know what gets them up in the morning and drives them to be the best version of themselves. For some executives, that is a discussion about a son’s baseball career; for others, it involves learning how they worked their way through college and made specific career choices based on their passions or the economic realities of their specific situations.
I don't screen for culture fit or strive to match executives on “culture.” Instead, I get to the guts of their accomplishments, management style, and aspirations. When a conversation is organic, the details that I’m able to learn are so much more authentic; this approach enables me to learn the real story instead of a glossy rehearsed one. Ultimately, I want to gather enough information so that I can make the best possible guess about what might be interesting to them in the portfolio, as well as who might be interested in them.
Where do most startups get talent wrong? How should they be looking at it instead?
Lauren: One of the things that I see companies doing wrong is being overly frugal on recruiting costs even after they've raised money. Hiring talent is one of the main expenditures that these companies are raising money for since it’s their key growth driver. Some founders who don’t want to put money into recruiting instead decide to work their network, hoping they can get lucky with a great executive hire. Yes, it can happen, and it can be magical when it does — but hiring within a network still comes with a cost. If you're not using a search firm, that hire is likely a direct referral from a board member or current executive, and therefore can often be very similar to the person doing the referring. That is not an ideal process if you're trying to build a diverse leadership team.
I have no issue when founders strive to hire from their networks, but I always tell them to engage a search firm as insurance. Spending $130,000 to hire the right leader can save a founder months of time and energy and ensure that her company won’t fall behind the competition. It’s more than worth the investment. In this market, the right person isn’t necessarily going to come banging on your door no matter how cool your technology is, how important your board is, or how awesome you think your culture is. You have to go out and fight for the talent you want.
How would you describe the current talent environment? Specifically, what’s your view of ‘The Great Resignation’?
Lauren: Personally, I can’t stand the term “great resignation.” It’s incredibly one-sided. It implies that the employer is passive, and the employees simply decide to quit as if it is all completely out of the company’s control. The reality is that if your employees believe they’re working at an amazing company, they’re not likely to leave. Too many employers are blaming the great resignation on external factors instead of looking internally. Companies experiencing high levels of attrition may have been unwilling to modernize or listen to their employees. Organizations that don’t grow (in terms of mission, compensation, flexibility, and more) become stale. That’s what causes people to look elsewhere.
How can founders and companies get ahead in the coming years?
Lauren: Many startups are so focused on hiring new talent that they forget about their loyal employees who are choosing to stick around. If you want to be a great employer throughout this volatile talent market, provide a great place for your employees to work, pay attention to the employees who stay, and compensate both new and existing employees fairly.
When you’re hiring new people at a higher salary because of the market, and your current employees make less, you must increase the salaries of your existing team in the form of corrections. Women and BIPOC employees can be disproportionately affected by the market, as they often do not advocate for themselves as loudly as others and are often punished when they do. Proactively correct your employees’ salaries — do not wait for them to ask. Listen to your team, and make the changes that you feel are appropriate for your situation. It’s your job as a founder or CEO to read between the lines. You may not make everyone happy at once, but do what you can to respect your employees. Your people will always be your biggest asset.