If you don’t invest in your offer process, the best candidates will be snatched up elsewhere. After months of work to find a suitable candidate, here’s how to maximize your chances of closing:
Make Offers at the Interview
Speed is one of your greatest advantages when hiring, you can complete the entire process in a few days. In contrast to your startup, large corporations can take months to make an offer. If the candidate is truly excellent, why wait? Here’s how to do it:
- Track the interview in real time — Use a collaborative document editor (I use Google Docs) and have interviewers track a) questions, b) answers given and c) the interviewer’s rating. During the interview, if a candidate appears weak in an area, you can direct subsequent interviewers to investigate further. You can also stop the interview once an outcome is clear, saving time if it’s a pass and starting to sell if it’s a fit.
- Make the offer in the last interview—Ideally the CEO goes in to make a verbal offer. You should explain that you’re excited and want to make an offer today. Then use this time to answer their questions, get an idea of compensation expectations and sell the company’s vision. Tell the candidate you will call them back today with a specific verbal offer.
Make 3 Offers
Once you’re making an offer to a candidate, you want to maximize your communication with them. Great candidates receive multiple offers and you’ll need to accelerate the negotiation to counteract the competition. Making 3 offers can increase your communication with a candidate and make compensation negotiation a lot faster:
- Verbal offers — After a successful candidate has left the office, you should quickly agree on the equity and salary ranges you’re comfortable with for the offer. Once these are set, call the candidate same day and present 3 offers:
i) High Equity / Low Salary
ii) Low Equity / High Salary
iii) Mid Equity / Mid Salary
Don’t negotiate at this moment, instead ask the candidate to take a day and decide which offer they want in writing — of course they can change this at any time. Schedule a quick call for the next day, to get their decision.
- Paper offer — Once you know which of the 3 offers they want in writing, send it to them and schedule another meeting to discuss any questions or concerns they have about the document. If you can, do this meeting in person to continue strengthening the relationship. In the conversation, focus on their barriers to signing, make a list of their needs and start addressing them ASAP. If compensation is an issue, you can resolve it quickly, given you have the pre-approved ranges for equity and salary, and you know which the candidate cares most about, given their offer selection.
During the closing process, resist any temptation to overstate your startup’s current success. Instead focus on being completely transparent across the business’ realities. Everybody knows, no company is perfect and this openness generates trust.
- Metrics and Runway — Be sure to take the candidate through the company’s core metrics over the last 6 months. You want to ensure there’s no negative surprises when the candidates starts, as this can lead to friction early or, in extreme cases, resignation. You should also make the company’s runway extremely clear based on both the current and expected monthly burn. Everyone deserves to know when they might have to look for another job.
- Equity Value — Do not exaggerate the value of equity. The candidate should not be joining your startup for a small chance to get very wealthy. Instead, sell them on the things you can offer versus a large corporation: more ownership of their work, more chances to learn, more recognition of their results. You can offset the current, and minimal, value of the equity by highlighting you’re also an equity holder, so increasing its value is in everyone’s interest.
Finding the right candidate can take months, but finding that person is not the end of your work. Getting people to sign requires significant time and effort. Use these tools to ensure the best people will join your team.
This article is part of a series on Startup Hiring & HR.
Where to Find the Best People
How to Hire Great People
How Interview Projects Stop Bad Hires
How Startups Make Offers People Sign
7 Reasons to Give Employees More Equity
Why You Have to Fire Fast
How to Cut Your Startup’s Costs Without Layoffs
Doing Layoffs the Right Way
Sterling Road invests in pre-seed B2B startups based in North America. Full process here: sterlingroad.com/process.
You can reach me here: firstname.lastname@example.org
Thanks to Kaego Rust and David Smooke for reading drafts of this.