VC Minute – quick advice to help startup founders fundraise better
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One of the things that has also become much more commonplace over the last few years, for early-stage companies in particular, is to look at fractional talent.
Fractional talent is a fancy way of saying part-time talent. Even before COVID, but certainly in the wake of COVID where people can work from home, they can work from anywhere. More and more people are working gig-style.
And that includes super-talented coders who just maybe they’re a little bit bored with one thing and they want to work on a couple of projects at the same time. And it happens with any position, including senior executives.
Fractional talent is a great way to access talent you might not otherwise be able to afford on a full-time basis, but you can certainly afford them on a part-time basis. And you may think it’s weird, like, hey, having a CFO 1 day a month or 2 days a month? Or having a Chief Revenue Officer two days a week—how could that possibly work?
The reality is that it works. It is one of the things that my company does; Bolster places for actual executives with startups all the time. And there are some amazingly talented people who just want to work that way now. It gives you access and opportunities that probably didn’t exist five or 10 years ago.
One best practice to pay attention to when you’re talking about fractional talent is that you generally want to treat them like their full-time talent. If you hire someone as your fractional CFO and they’re only there a couple days a week, they’re still your CFO. You have to just agree upfront with them very clearly on what the scope of their role is. Are they managing people? Are they not managing people? What are the things they own? So you’re not giving them the job and then stepping all over them on the days when they’re not there.
The pitfall to avoid is confusing the need for an individual contributor with, what I would say, the lure of a fractional executive.
The classic example of this comes up all the time in sales. We’ve had a number of clients that have come to us and say, I need a fractional Chief Revenue Officer, and my budget is $200,000. I’ll say to them, well, that’s great. How big is your sales force? Expecting them, even at a really early stage to say, well, you know, I have 3 reps or 4 reps or something like that, and I really need a boss for them. And they’ll say, oh, I don’t have anyone yet; I do all the selling. And the answer is like, well, actually, you don’t need a fractional chief revenue officer; you need some reps. So, take the 200, 000 dollars and go hire an AE or two.
And if you need help thinking about how to structure things like, territories and compensation or other things cuz you’ve never managed a sales team before, hire a chief revenue officer to do a project for you. Hire them to come in and teach you the things you need to know to manage your two account execs.
So again, fractional talent is a great way to access talent, including really experienced senior executives.
Thank you, Matt, for an incredible week of insights and actionable advice. We love that here on the VC Minute.
I’ve long admired Matt’s work, and Startup Boards is an excellent read. Even if you’re not yet building a board, it’s something that you should think about. And if you have a board, you should definitely read it to get the most out of it. Remember, reach high for those board members.
Thank you, everybody, for spending another week with the VC Minute. Time is our most precious asset, and thank you for spending it with us.
Bolster is the new way to find the right executives. We supercharge startup growth by matching CEOs with transformational leaders—without the hassle of traditional talent sourcing. Built by entrepreneurs for entrepreneurs, the Bolster marketplace is packed with diverse, highly qualified talent ready for executive, advisory, or board roles. Our no-nonsense, no-frills approach makes it easier than ever for startups to find the right leaders and for leaders to find the perfect next opportunity. Start your search at bolster.com.
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