Of course this does include their own talent, but as the statistics in the quote below (and the full article) show, how the leadership and operational excellence of a ‘Portco’ deliver far more value these days than financial engineering. This also applies to VC's and their portfolio companies, perhaps more so, as there are less opportunities for financial engineering and debt for early stage VC backed companies. It is for this reason that we at Hyperion Executive Search are frequently brought in by our VC partners, and others, to assess and help add leadership talent across the Board, C-Suite, VPs and Heads of level of their portfolio companies.

It's also very true that the dynamic has changed in the key requirements of that new talent. The ability to integrate and execute against a plan are still fundamental, but as the author of the article reflects, ‘A decade ago hiring specs emphasized a cluster of capabilities and characteristics having to do with flexibility, adaptability, and change management. Now companies increasingly have to look for executives who are also adept at managing, motivating, and inspiring people, who are authentic and credible, and who possess high EQ and people skills.’  These skills are critical in today's leadership teams, and not always present in founding teams, or if they are, the founders are too busy and stressed to develop and demonstrate them. 

The long and short for both PE and VC firms, to maximise your returns, the key is increasingly the capabilities, and the authenticity of the executive teams in the firms you acquire or invest in.

If you want to explore how we support investors and their portfolio companies through hiring leaders with the right balance of IQ, EQ, experience and execution skills, a coffee is always available, virtual or actual.

David