If factories and warehouses were the major assets of old economy companies, for new-age tech companies, it is human capital. So much so that venture capital firms are now creating in-house capabilities to look after human capital at their investee companies. “We’ve not frequently seen VCs bring a strong HR person on board for their investee companies, they will bring in someone from a commercial, financial or business background, but not usually HR,” says Yogesh Sood, CMD, BYLD Group, an HR consultancy. Preetam Salian, founder, HiringMonk, echoes this. “VCs don’t usually recommend people for HR. Founders don’t have enough bandwidth as a company grows to more than 50 people, so they eventually hire someone to do the job for them,” he says.
Conventionally, VCs provided start-ups access to their network and assisted them in top-level hires, but with the increase in portfolio size and start-ups’ rapid-growth trajectory, this is changing. They are now creating a separate human capital vertical in their organisational structure. Accel Partners hired Narayan Thammaiah as their chief people officer in March 2015; Matrix Partners hired Alexander Peter as their human capital lead in October 2015, whereas SAIF Partners is on the lookout for someone full-time to manage HR at their portfolio companies. “The environment has now changed from fund raising to building a business. So one key area of investment for us is in building of teams,” says Tarun Davda, managing director, Matrix Partners.
HR interventions, though, are dependent on what stage the start-up is at. “During ideation and conceptualisation, the focus is more on operational issues. Once the organisation moves to validation, role of HR becomes tactical and strategic. I think once the entrepreneur starts spending more than 20-30% of time on task or transactions, we recommend hiring a HR,” says Thammaiah.
The HR interventions performed by Accel include creating a platform and vendor ecosystem for portfolio companies to attract talent. These include hackathons, return to India and campus-connect