The venture capital industry competes in a volatile marketplace typified by high risk and high reward. Venture firms invest millions of dollars on seasoned executives and entrepreneurs who present great promise of creating significant shareholder value with the identification of the next big idea or innovation that will revolutionize an industry.
Whether an investment yields financial rewards depends on the delicate balance of innovation, market conditions, leadership strategy and countless other uncertainties. In making the complex calculation of whether to invest in a promising new venture, many venture capitalists often overlook one critical factor ? the human capital component. After an investor invests capital behind a concept, it takes the right management team to get a company off the ground and execute the company's strategy.
Raj Pai, a principal at CID Capital, a 26 year old Midwest based venture investment firm that manages over $300 million of investment capital and specializes in life sciences, information technology and business services, says he has seen human capital "make or break" investment deals.
Pai remembers an investment his firm made in a technology company that fell apart because the right management team wasn't in place. Pai says the company's founder had problems with communication and delegation that didn't come to the surface until after CID Capital made the investment. Even though the technology was innovative and the market was ready to receive it, Pai says the company couldn't survive without the right leadership.
"You can go from everything's okay, to all hell is breaking loose in one month, and that's what happened with this company. We had to shut the whole company down, and lay everyone off."
Pai says that identifying the best management talent takes more than just sifting through stacks of resumes. Innovative leadership ? the kind it takes to turn a bright idea into a profitable company ? depends on all kinds of intangible factors, such as how an executive copes with stress or how she or he interacts with the board of directors.
Many of the most successful venture capital and private equity firms partner with a top executive search firm to help ensure the success of their portfolio companies. In addition to recruiting senior executives to serve as management team and board members, an executive search firm can play a critical role in vetting a prospective investment. "We know our strengths and weaknesses," Pai says. "Sometimes venture firms know it's best to look for outside help."
A top executive search firm can also play a critical role in helping investors source attractive investment opportunities. "Due to the many privileged relationships that we share with leaders of industry and sources of private equity and venture capital, we find ourselves at the intersection of human capital and investment capital. Because of the limited number of quality deals that are truly worthy of investment backing, venture capital and private equity firms rely on being introduced to titans of industry with the next big idea," says Donald Law, Managing Director of nationally recognized executive search firm Venerable Partners.
Pai says CID Capital recognizes the critical value of human capital, so now the firm hires an executive search firm like Venerable Partners to assist with nearly 70 percent of its investment deals. One of those successful investments was in Red Sky Technologies, a Chicago-based company that provides emergency response telecommunications services.
Pai says his firm hired executive search firm Venerable Partners to make sure Red Sky had the human capital to thrive.
Pai says executive search firm Venerable Partners was able to identify several seasoned industry leaders who might be interested in contributing to Red Sky. In the end, executive search firm Venerable Partners recruited a high-ranking Fortune 50 executive to serve as a board member to advise the company's management team. "What we need to hear from them is the big macro shifts that are occurring in the industry, and you can't buy that talent," Pai says.
Pai says CID Capital would not have been able to recruit an executive with such a high level of expertise on its own had it not been for partnering with a top executive search firm like Venerable Partners.
"I don't think we would have been able to tap a person like this to help. But somebody's got to bring the horse to the water. This particular executive got involved because he bought into the idea, but it was executive search firm Venerable Partners who brought this industry veteran to the water" says Pai.
For more information please visit http://www.venerablepartners.com.
Mark Kupryjanczuk writes articles about executive search process. He is an executive search firm professional with unorthodox views on investment introduction, executive recruiting and the role of executive recruitment firms.
Online Marketing Expert Reveals How to Capture More Profits, Faster, Better and with Less Human Effort with Teleseminar Marketing
Alex Mandossian, one of the top Internet direct marketers in America, has just released a new article on his web site. The article, "Ask and You Shall Receive: How to Use Your Market to Take Your Teleseminar Training to the Next Level for Big Bucks" is available for immediate download at www.AlexMandossian.com.
Human Capital Institute and HCR Software Solutions Team-up to Advance Strategic Talent Management
The Human Capital Institute (HCI), a global professional association and educator in talent management strategies, and HCR Software Solutions, developers of compensation and performance management applications that help organizations better align employee performance with overall business objectives, announced today that HCR Software Solutions will support HCI initiatives as a global underwriter, helping bring the latest human capital education, metrics, and tools to leading corporations.
You Owe Your Laptop And PC To To Basic Human Ego And Its Frailties.
One of the most important developments leading to the personal computer revolution was the invention of the semiconductor. Or the transistor in 1949. The feat was accomplished by engineers at Bell Labs. The transistor was nothing more than a solid state electronic switch that replaced the much larger vacuum tubes of the day. The transistor consumed significantly much less power in performing the exact same job as the larger, hot tubes of the day. Thus a computer system built with transistors would be smaller, use less power and be more efficient. And to boot since transistors did not wear out like an electric tube or electric incandescent light bulb, much more reliable.
How You Can Earn Money From Digital Products With Private Label Rights And Master Resell Rights
Master resell rights, private label rights, resell rights... Whenever you do not know what each term means, you can surely discover yourself confused by all the hype. In this article, I am going to explain the different types of resell rights that you'll be able to purchase and discuss how you can make money with them.
Intellectual Property:Trade Mark Infringement - Pharmaceutical Product - Exhaustion of Rights
In the case of Bolton Pharmaceutical Co 100 Limited -v- Swinghope Limited and Others [2005], the claimant was the new owner of a trade mark registered in respect of a pharmaceutical product which was commonly used to treat hypertension. It acquired the product from AZ, another pharmaceutical company, in September 2004, who had previously sold its trade mark rights to a Spanish company.
Randomness of Human Thought
Random thought Sequence in the Human Mind. I want to comment on an article about Random Sequence in the Mathematical Association of America Newsletter in January 2002.
From Democracy to Omniocracy
Clint Eastwood recently plunged into the murky political pond with his statement, "Extremism is so easy. You've got your position, and that's it.
Congressman Danny Davis and Reporters Without Borders Joins Mass Rally on Human Rights in Sri Lanka and Burma
Congressman Danny Davis (D-IL) is scheduled to speak at the human rights rally organized by People for Equality and Relief in Lanka (PEARL) and U.S. Campaign for Burma (USCB) on July 24, 2008. The rally will begin at 12:00pm, and members of congress and human rights representatives are scheduled to speak at 1:30pm. The location of the rally is Russell Senate Park, at the intersection of Constitution Avenue and Delaware Avenue.
Human Rights Leader Completes Fifth World Tour
Ms. Mary Shuttleworth, Founder and President of Youth for Human Rights International (YHRI), completed the final leg of her Creating a Human Rights Renaissance World Tour 2008. Traveling on her fifth world tour and accompanied by videographer Ben Welch, Shuttleworth traveled to Haiti, Venezuela, Morocco, Nigeria, Kenya, Egypt, Pakistan and Taiwan.
Dream Therapy and Learning thru Human Hibernation
Want to learn a new language? Would you like to earn a PhD in Physics; perfect your backstroke tennis swing, golf finesse or fly-fishing techniques, while you sleep? While, your immune system catches your body back up on your lack of exercise, fitness and proper diet? How about if I told you, that you most likely will shed about 20-25 lbs of extra weight while all this is going on? Well, if we further develop our sleep research, human hibernation studies and mind or brain advances we will be able to do all this and more in the near future, perhaps less than 5-years.Let me tell you about a few of the latest new rapidly approaching and potentially converging technologies, which will make all this possible.