The Talent Partner Study:

Inside the VC
October 2018
 Earlier this year, True Search deployed an online survey to Talent Partners1 of
90 leading VC firms based in the U.S. and Europe—predominantly Early
Stage (series A or B) to Late Stage Venture (series C+); 106 Talent Partners
participated, representing 72% of those surveyed.

We work closely with professionals in this function on a day-to-day basis but

found there was little literature or research detailing how the function was
developing, where they spent their time, and how they were compensated—
so we decided to ask them. The insights gathered about this increasingly
prevalent, yet still developing, function are presented in the following report.

True Search appreciates all those that supported and contributed to this effort.

1
We define a Talent Partner as someone employed by a fund on a full or part-time basis whose primary focus is talent related
activities on behalf of the fund and its portfolio companies.

The Talent Partner Study: Inside the VC | October 2018 2

 MOST RECENT FUND SIZE

Introduction $0-100m - 8%
$101-200m - 11%
$201-300m - 6%
We mapped 86 VC funds in Europe (30 with a Talent $301-400m - 9%
Partner (35%) and 93 VC funds in the U.S. (62 with at $401-500m - 3%
least one Talent Partner (66%). $501-600m - 9%
$601-700m - 4%
$701-800m - 3%
$801-900m - 3%
$901m-1bn - 2%
$1.1-1.25bn - 5%
$1.26-1.5bn - 13%
$1.56-1.75bn - 3%
$1.76-2bn - 3%
$2bn+ - 15%

TOTAL ASSETS UNDER

MANAGEMENT (“AUM”)
$0-500m - 16%
$501m-1bn - 18%
$1.1bn-2bn - 15%
$2.1bn - 3bn - 8%
$3.1-4bn - 4%
Investment Stage Locations $4.1-5bn - 6%
Our findings show the most prominent location for Talent $5.1bn-6bn - 9%
Most respondents were from Early Stage $6.1-7bn - 7%
(Series A or B) to Late Stage Venture (Series C+). Partners is currently the U.S. and primarily in the Bay Area $7.1bn-8bn - 3%
(71%; inclusive of SF and Silicon Valley). By contrast, only $8.1bn-9bn - 1%
$9.1bn-10bn - 1%
8% are in Europe (London and Berlin). $10bn+ - 10%

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 Talent Partner Profile Length of Time
Most Talent Partners (58%) have been in their as a Talent Partner
roles for 3 years or less and 90% for 6 years
or less. This shows that, even in the Bay Area,
this role is a young and emerging function in the
VC domain that has seen increased investment
and focus in recent years.

While still a relatively new function, we found that

in terms of professional background, most Talent
Partners have cumulative work experience of
10-14 years. Only 7% of respondents have less
than 5 years cumulative work experience.

Previous Experience Prior to

Participants were asked where they had spent Becoming a Talent Partner
their career prior to becoming a Talent Partner.
The results showed that over 90% of Talent
Partners have either an Executive Search or
Recruiting background, often combined with
experience in other fields.

The Talent Partner Study: Inside the VC | October 2018 4

 A Relatively Young Function
In line with our findings regarding their experience, most funds have only had the
Talent Partner function for 3 years or less. The majority of funds do not yet have a
team larger than 1 or 2 Talent Partners—although there are some notable outliers
that have invested heavily in the function.

We also compared the average number of Talent Partners with AUM. Unsurprisingly,
and on average, the greater the AUM, the more Talent Partners at the fund—more
cash flow from management fees equals more investment in the function.

Team Size

The Talent Partner Study: Inside the VC | October 2018 5

 How Does the Talent Partner
Team Divide Responsibilities?
The majority of funds with two or more Talent Partners split responsibility
between the team members by function (e.g. Board / CEO and Sales /
GTM, etc.), seniority of the hire, industry sector or geography.

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 How Do They Allocate Time Across Priorities?
We asked Talent Partners to highlight their strategic priorities for 2018 and then compared this to how they actually spent their time in 2017.
The results revealed that Talent Partners have a highly varied number of responsibilities that can be difficult to prioritize throughout any given year.
This suggests that this is an inherent aspect of the role. The data below shows 2018 priorities compared to time spent on these areas in 2017.

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 Top Strategic Priorities in 2018

1 2 3 4
Advising portfolio Managing the firm’s Managing Advising
companies on collective executive search firm portfolio companies
recruiting matters talent network relationships on compensation
(71%) (61%) (47%) (40%)

Key Insight: Unsurprisingly perhaps, the top four priorities Lowest ranked priority: Internal HR work (16%)
are closely related to talent acquisition for the portfolio. Percentages shown based on total respondents.

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 Greatest Influences
We wanted to learn who has the greatest influence on how
Talent Partners spend their time. Based on their responses, in
most cases they set their own agenda. This indicates the need
for highly autonomous, self starters in the role with the ability to
prioritize and execute consistently.

Predictably, the second biggest influencer on time is their

investment professional colleagues, who lead and manage the
investments.

Where respondents selected “Other,” comments indicated a

combination of fund needs and their own judgement.

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 Involvement with Portfolio
In any given year, the majority of Talent Partners (60%) will work
with between 25-75% of their portfolio companies. This was
interesting to see given venture returns are typically generated
by a small percentage of the overall portfolio. It indicates that
Talent Partners work with a high number of companies to help
them realize their potential.

Respondents also shared that they typically interact with the

management teams of the portfolio companies they work with
on a weekly or monthly basis. The cadence of interactions
often depends on how recent the investment is, with
more attention being directed to more recent additions
to the portfolio.

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 Challenges to Success
Almost 60% of Talent Partners identified their biggest
challenge to success is the sheer variety of tasks required
by the function. This was closely followed by resource
constraints in terms of the headcount needed to execute
against these tasks. The challenge of demonstrating ROI
for the function given many of its activities does not
necessarily carry a quantitatively measurable outcome.

Despite resource constraints being identified as a clear

inhibitor to success, approximately 60% of Talent Partners
confirmed that they have no plans to expand the size of the
talent team in the short term (next 12 months).

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 Key Challenges

Defining Resource Difficult to define ROI Building stronger

priorities. constraints. and success metrics. relationships.

More than 60% revealed
that their biggest challenge
to succeed is the variety of
tasks within the Talent
Partner function.
60% indicated The top three ways that respondents
no plans to expand recommend to better assess ROI are:
their Talent Partner
team in 2019. 1. Increase CEO engagement level
2. Increase the size of their executive
network and executive introductions
3. Complete executive searches indirectly
or directly across their portfolio
Majority of respondents
shared that developing
better partnerships with
their portfolio companies
and investment professionals
is needed to succeed
in their role.

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 What Does the Future Look
Like for Talent Partners?

MORE TECH/ STRATEGIC GROWTH + DEAL STAGE

DATA DRIVEN + ADVISORY SPECIALIZATION INVOLVEMENT

Automated processes,
predictive psychometric tools,
tracking candidates, companies
and relationships, leverage data
to improve the quality
of searches.
Evolving to a more strategic/
advisory role vs. a tactical/
execution oriented role.
Increasing the team size to
lead to more specialization
in the role.
Helping to win deals as a
strategic advantage in
pitches or actually moving
to more deal sourcing or
deal enablement.

The Talent Partner Study: Inside the VC | October 2018 Based on the top four comments received. 13
 “There will be more of a focus “It will become a key role for “This will morph with “This role will evolve to be a lot
on contributing to deal VC/Investors in Europe; in the USA how investors work in more advisory rather than tied
sourcing/deal enablement.” it is already a key role.” the next 5 years.” directly to recruiting.”

“Will be recognized as a key contributor of value

“It’s going to become slightly drowned
and rewarded appropriately. Will increasingly have
out as each firm has their own set of
presence on Boards and pitched as part of portfolio
Talent Partners and companies have
support to entrepreneurs.”
multiple rounds, investors, etc. Talent What does the
Partners will either need to work together,
or work even closer with their executives
future look like for
“Similar to a CISO, top Talent Partners will be
to bring value to the table.” deal enablers (different from sourcing).” Talent Partners?

“The key challenge will be a transition from transactional value to strategic value and
working more proactively across a portfolio vs. more reactionary to current needs.” “Seed = more hands-on
Venture/Growth = more strategic
Both = more talent CRM-enablement to
“Firms will devote “With more data and better systems, having “This will become a productize Talent Networks and
more resources to this better informed discussions with CEOs to help must-have function in achieve more-with-less.”
function over time.” influence their talent agendas.” every VC firm.”

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 Compensation

Total Annual Cash Compensation

We asked Talent Partners to indicate their total annual cash compensation
(base salary + bonus) and compared against a set of data points in order to
ascertain whether cash compensation varied depending on any of the following:

(a) size of fund (total AUM)

(b) size of last fund raised
(c) total years of experience
(d) years of experience working as a Talent Partner

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 Compensation: by total AUM

The Talent Partner Study: Inside the VC | October 2018 16

 Compensation: by size of last fund raised
The firms with the lowest, most recent fund size had the lowest compensation range. It was only where the most recent fund size hit the $900M+ mark that we saw
compensation of $750K or more for a Talent Partner.

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 Compensation: by total years of experience
The more years of overall experience, the greater the compensation. Only Talent Partners with 20+ years of cumulative experience received compensation of over $1M.

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 Compensation: by years of experience working as a Talent Partner
A similar trend emerged with years of experience as a Talent Partner. Although it’s more difficult to draw conclusions here, as we found that very few Talent Partners had
more than 15 years of experience.

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 Long-Term Compensation

Using the same data points noted below, we compared long-term

compensation (carried interest + other forms):

(a) size of fund (total AUM)

(b) size of last fund raised
(c) total years of experience
(d) years of experience working as a Talent Partner

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 Long-Term Compensation: by total AUM
For funds with less than $3bn in AUM, there are greater ranges of long-term compensation, in some cases going up to $7M-$7.5M. This is also true for funds with the
largest AUM amount of $10bn+. As noted earlier, the range in compensation at larger funds could be attributed to the varying levels of experience found in a bigger team.

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 Long-Term Compensation: by size of last fund raised

The Talent Partner Study: Inside the VC | October 2018 22

 Long-Term Compensation: by total years of experience
Long-term compensation of $7M+ was only paid to Talent Partners with at least 15 years of cumulative work experience.

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 Long-Term Compensation: by years of experience working as a Talent Partner
It is difficult to draw conclusions here as generally speaking most Talent Partners have less than three years of experience in the role.

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 Measuring
Talent Partner ROI
We asked respondents how their funds measure the ROI
of their activities. The general consensus was that it is
challenging to measure ROI consistently and there is no
one way of going about it. Most funds combine a number
of different metrics to track and measure success.
Interestingly, the most popular metric was an increase in
the level of CEO engagement while overall fund and
company performance were ranked less important.

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Measuring ROI
We also asked respondents whether they thought
there were ways that the fund could better
measure Talent Partner ROI. While the majority of
respondents agreed it is challenging to do this
successfully, we wanted to share some of the key
comments.
A popular comment was that CEO / portfolio
company feedback is the best way to measure
ROI. Another comment identifies that hiring
retention rates for hires made when a Talent
Partner was involved could be used, although
there was no consensus here.
The Talent Partner Study: Inside the VC | October 2018
“Expansion of the network, more broadly
and the number of these nodes that are
“Management team feedback, success of
hiring and other HR metrics.”
verified via references as “top” talent.
We’re often too reactive.”
“I don’t think it’s fully appreciated or could be measured by
how important the part is of managing relationships with
“Founder/CEO
recruiters and recruiting firms. It can make or break
NPS is #1.”
important hires depending on the results. It’s a big part of
the job but I find it’s not that known or valued.”
“Brand equity, though hard to measure.”
How could ROI
“...all they (investment professional colleagues) care be measured?
about is that the founders/CEOs are getting value
out of the talent team. No desire to track anything
else like # of meetings, placements etc.”
“We don’t overthink ROI since it
“Directly asking “How helpful was X?” A lot of is hard to measure, and I am
talent support is hard to measure numerically, so very integrated in everything the
qualitative feedback might be a better measure.” deal team is doing.”
26
 Key Findings

Measuring success is challenging. The variety of tasks required of Talent

Partners and the difficulty with setting clear priorities makes accurately
measuring ROI challenging.

Investment is apparent. More and more funds are investing in the function
as a way of helping their portfolio companies hire great people. The
investment in the Talent Partner team will be a critical ingredient to achieve
success as they undergo rapid growth.

The function will be a key expectation. We foresee more funds choosing

to add resources in the talent arena going forward as it becomes a key
expectation of entrepreneurs when selecting funds they want to work with as
they strive to become market leaders.

Research led by Will Bruce, Partner, EMEA, Ben Dewar, Partner and Head of the People + Talent Practice

The Talent Partner Study: Inside the VC | October 2018 27

True Search is part of True Talent Advisory, a global portfolio of products and services centered on talent.