In this episode, learn how to discuss equity as part of the candidate compensation package, how to balance interviewing and selling during the hiring process, and how to create a wonderful offer experience (as an extension of the candidate experience)! This video is part of our free, online 6-video crash course on “How to Hire At Your Startup” available on our YouTube channel.
How To Hire: Closing Your Top Candidates (Part 6)with Sasha and Jake
About the Episode
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Hey, thanks so much for joining us again. I’m Sasha, I’m Jake, and this is Venture Scaler today. We’re talking about closing your candidates and this is a tough thing. Sometimes I never liked to hear no when I’ve found my ideal person that I want to bring into the organization. So we’re going to take you through three things that we’d like to focus on to get them to say yes, yes. To the dress that I like to say, say yes to the dress. Um, so our three big things always be closing. We’ll talk about how to do that throughout the entire interview process. How to tell an equity story, if that’s something that’s part of your compensation offer. Yup. Um, and then how to create a really incredible offer experience as an extension of the candidate experience. Right? So those are the three things enjoy. Yeah.
So in terms of always be closing, you know, it’s like a sales term, that’s kind of how we’re thinking about a little bit of this is dopey. So this process now you’re to a certain point with a candidate as, like a hiring manager, I’m sure as head of people where you just have that top candidate, you want to close them. I know when I have those conversations, I flip in the, in the sales mode. So we’re gonna talk about some of the things you can do and that you can like pepper in throughout the interview process, but also at the end to try to solidify the yes. And to help really like, you know, maximize the potential for the close.
So the thing that I think about is creating FOMO. What could you tell or share with this candidate that would make them feel like, Oh, like I need to be a part of this team, either their team or their culture, their growth, maybe it’s comp, maybe it’s the role itself? Maybe the state of the business. What about us is so fabulous that they can not say no and how to create this environment of FOMO? Yeah.
I think about it coming from like a startup ops background of finding the value proposition for the candidate. So what about this? What about our company? What about this role is really going to speak to something that they’re looking for as a kid.
Yeah. Unique to them. And if you watch one of our previous episodes on screening your candidates, there’s one question that we always ask in the first interview, which is around why this role, why this company, and usually in that they’ll start dropping hints, right? Unintentionally about what’s important to them. So maybe they’ll say, Oh, I saw an article or a video of your team culture online. It looked amazing. I’m just looking for a great team. I just want to work with amazing people. Maybe they’ll say like, I’m obsessed with building startups. I saw that you just raised funding. I want to get you from here to here. Or maybe I’m trying to think of other examples of I’m coming up short.
One really good example that I’ve actually had recently was I had a candidate who talked about how excited they are about learning and how important that is for them. So they just like, hyper-focused on, like, they’re reading all these books and blogs and different things. So the goal there though, is to find that thing that they’re really excited about and tell the story about how this job, this company can offer them that. So for learning, I started talking about, oh, think about like, here are all the opportunities within this job that you’ll have to learn. And the things you’ll be able to learn and areas you’re going to be able to level up in and things that I can get you exposure to that are might fall slightly outside of this role to help you learn all these different areas. So yeah, I think about it in terms of the value proposition for the candidate, FOMO, the fear of missing out the same idea. You’re, you’re finding something that they’re excited about and building that up as a selling point.
Yeah. One thing I will say as a caveat, be super honest with everything that you say do not over-hype, there’s nothing worse than over-promising and under-delivering on expectations that you set with the candidate. We’ve drawn analogies to a sales process. It’s the same when a salesperson promises things and a product or a service and they can’t deliver and it feels super crappy. So
What happens when that, when the salesperson over promises, you lose the customer and they churn and the same, I’ve seen it happen. The same things happen with great candidates when you oversell them the opportunity and they come in and they’re like, this isn’t even close to what you talked about. The culture is not there. The rules and responsibility, like the responsibilities of this role, not even close, uh, we don’t have like the budget, the team and you lose that person. And now you need to go back and do it all over again. So yes, a hundred percent Hondo P we’re getting it trending very, be very transparent and honest with those expectations, right? So part of always be closing and selling them one piece of that’s going to be comp. There’s a lot of different things you can talk about when it comes to comp and getting them excited, right. Base salary, the benefits, some of those like fringe benefits that kind of like tie into the culture and the workplace and that experience. But another big piece, which is number two that we’re talking about is the equity that may come with your compensation package. So
Equity dance. I’m going to make that a thing. Every video we do. And we talk about equity.
For backup, what is equity for those? Yeah. Oh, Oh, Oh, I’m sorry. I gotta back it up. Make it up. When you talk about, like, what does that mean when you say equity for, for candidates or for employees? Great question.
There’s probably deserves a whole other episode that we’ll probably do later. Maybe the links like right here. Um, when we talk, when I talk about equity, so most people don’t know what that means. Uh, unless they’ve worked at a startup that offered equity, uh, stock options. ISO’s, uh, unless they’ve had those before, they might not understand what it is. And even the folks I’ve had folks who have had options and equity and they still don’t.
I still don’t fully understand everything. Let’s be cool.
So talking about equity, the idea is that a part of your, like all the stock options of the company that as of typically as a venture-backed company, when you’re raising rounds of venture capital, part of the shares, and part of that, that equity pool is carved out as a stock option pool. Typically like in any round, you’re carving out 10 to 15% of the round as stock options for future employees, right? So those options that are provided as a part of the compensation package of a certain value at a certain strike price, all those things, but that’s part of the compensation package and those, those shares, and the story that you tell around those is that as the company grows and becomes more valuable and gets higher valuations, those options become more valuable and you can buy them and then sell them at a higher price and earn potentially a lot of money.
Yeah. And so we will do another episode on more deep diving into that. And we will bring on some fancy people who know more about it. Yes. But educating your employees on what stock options are and how to exercise and do they owe anything and are they mine? Like you get questions all the time. So make sure to properly educate your employees, especially once they’re on the team, but there’s the storytelling component. Then, I feel like just, I don’t want to sell them on it, but the storytelling of the opportunity, like what these could be is a big piece.
Because as a startup, you might not be able to compete with some of the larger companies. You’re not going to be able to compete with Google or Facebook, or like those types of offers because you’re probably not going to be able to compete on base salary or bonuses or things like that. So as a smaller company, that’s on the path of growing and scaling and it’s venture-backed equity becomes a really big piece.
It’s a long-term upside of their compensation package. Yep. So, sorry, I didn’t mean to cut you off.
No, I was just, I think let’s talk about like, how do you position, especially I got at Trainual, because you are posting series a, you’re looking in the future of raising another round. So the companies planting, growing, scaling the valuation will go up four Oh nine a will increase. How do you position and talk to future candidates? Yeah.
So I’m super careful not to over-promise. Yes. That’s big in everything that I do, don’t want to over promise and under deliver. So I never say you, we will be here or we’re going to get to X number of dollars in, um, our share price. But I will try to tell a story and I’ll give an example in a second, but I want them to I’ll give them all the information like right now, our strike price is X, R 49. A valuation is why you have this many numbers of shares. And oftentimes we’ll share the percentage of the option pool that they have. So they can do some math. We are going to be really transparent.
Yeah. That’s very transparent. That’s great. That’s great.
Um, but for people that have never had options before, they’re like, this is not money in my bank right now. I can’t buy fro-yo with it, which is how what I use most of my money for. Um, so why, why do I care? And so I like to use examples from either past roles or other startups that I’m aware of. And I’ll say like, Hey, like when I was at X company, I started when they were, uh, immediately post series a, we are 15 people. You’re a million in revenue was way underpaid. And I had options and they ended up having multiple events, equity events, where I was able to exercise my shares, and assuming they understand this language, I was able to exercise my shares in a cashless transaction. So in one day, I made my entire annual salary and I could pay for my down payment.
And these, like, these are huge wins. It takes a lot of hard work and a lot of time. So it’s not something that’s going to happen next year. But if this is a company that you want to build, this is a place you want to be. These options are yours. And if we build something incredible, you get to share in that when you get to share in the success story of your, of our business. And so it’s, it’s driving the right incentives, creating this feeling of ownership across the organization from like super, super junior customer service reps up through your most senior executives and the lighting incentives. We’re all building a business and we’re optimizing for the value and create, and that’s by creating value for customers, creating an incredible employee experience. All of these things factor into that valuation, which is like, I care about this a lot, but I care about it through the people lens. How do we make sure we have great people who are working really hard and incentivized to help make the company more valuable?
Yup. And like to put a button on it that the TLDR to a candidate is you get to share in the upside of our company’s success if we’re successful. So you get a piece of that, that value. If we can create a really valuable company, and I’ve seen that resonate very strongly with the right candidates. So it’s definitely a part of the story that you want to tell. All right. So that’s number two, the equity story. So number three is around creating a really great candidate experience and an offer experience.
Sure. And we had another video earlier on the candidate experience. So we won’t get into that, but the offer experiences is one piece of it, and continuing to provide an incredible experience for the candidate. And again, FOMO throughout just pepper and, and FOMO where this is such an amazing place. You can’t not be here, but Jake, tell me, what does your offer experience look like? Walk me through, step-by-step say I was interviewing for a role in your team. What does that look like?
Right. So after the final interview, ideally have already outlined what all the steps are in the process, right after that final interview set an expectation around when they should expect to hear back about a decision being made. Okay. Clear communication. Right. Very key. Right? Clear communication, set expectations on when they should expect to hear something back, the worst thing you want to do is just ghost them. And then all of a sudden they’re done with that last interview and they’re like, Hey, what’s, what’s going on? Did this go to somebody else? Do you not like me that I bombed that last interview? So I try to be in that community and being in communication set the right expectation. And then before I send off the actual written offer, I like to get on the phone and do a verbal offer. So I think it’s super important.
I actually tried to, like, I want to get on the phone with them. I don’t want to send them an email. I don’t want to, you know, do anything over, over text, or anything like that. Yeah. I think it on the phone, zoom calls is fine. That’s great too. But I try to get on the phone and have a conversation with them about extending the offer. Yeah. So, and it’s, I usually just cut right to it. Just like, Hey, like really? I have really exciting news. I want to let you know that we are ready to extend the offer to you, that you got the job. Um, I try to, sometimes I try to ask the question of, even ahead of that phone call of, Hey, if we were to make an offer, if we were to extend this offer to you, would you accept?
Yeah. Right. So then, you know, getting like buy-in and a yes. Upfront having that verbal offer call and on that call setting the expectations around what is comp based salary, stock options, any bonuses, all those pieces. So setting the expectation, like here’s what the comp package is. Here’s what the start date is. Those are usually the two big things that you get negotiation back and forth on love to hear your, your experience with that. But that’s what I’ve seen. So I try to have a conversation around those things to fast forward through that negotiation step of all right. Here’s what bases, here’s their start date. Does that all sound good? Make sense? It’s like, yeah. Like I was really like, yes, very excited. And can’t wait or, Oh, you know, like I thought the salary was going to be here. Could you have any wiggle room on this? What about like, I have questions about X, Y, and Z. So on that phone call, I mean, I’m able to get all the information I need before I draft and send a written offer and have to go through that negotiation and back and forth and sending PDFs and getting my people ops team involved and all that stuff. So I try to do that verbal offer prior to the written offer.
And we’ve talked about discussing compensation and timeline and logistics throughout the entire process they’re candidates where we’ve had a slightly longer process for whatever reason. And I’m texting or calling them once a week. She’s like, Hey, just want to check-in. Is this still the right timeline? Is this comp still? Okay. And if anything changes on our end, I’ll give them an update. Um, cause I think that’s super important and setting expectations, nothing irritates me more. This is a personal pet peeve, but it probably doesn’t apply universally. But when I make an offer, after having this clear communication throughout the entire process where I’m clear on our budget, they’re clear on their expectations and then they try to negotiate. I’m like, I’m about to rescind that. And I don’t know why for me, it’s so irritating because I’m big on transparency upfront and it’s the honesty and rapport building.
Like I’m being real with you. Be real with me. Let’s figure this out and make sure it’s the right partnership. I think that’s not necessarily normal. Some people don’t love it and they’re told to negotiate, but I want to know like going into that, that we’ve already discussed comp. We’re cool with it. We’ve discussed the timeline ish. We’re cool with it. If we need to push by a week or two, that’s fine. Um, but you really shouldn’t have a ton of those like crazy comp conversations. Like we’ve talked about when you wait for the entire process before bringing it up,
They don’t hear about compensation until they get a written offer letter. Right. You’re just setting yourself up. If you do it that way to either land on a final candidate where you’re not aligned on comp and you lose him or her, or you set yourself up at that point too. Okay. Now the negotiation process starts. Now let’s have conversations about comp and benefits and let’s go back and forth. And like you could, the idea is that you do all that work upfront from the very first conversation, right back to that first screening call so that you can run a really tight streamlined process and you’re not spending any more time.
Yeah. And for the most part that works for me, I’ve had a couple of people negotiate or ask if there’s any wiggle room. And again, we’ll do more, more videos on the comp I’m hyper-focused on fairness and parody internally. So when we set a budget, that’s the budget for the role. And we’re looking for a specific skill set to do something we’re very disciplined in that, but that may not be the case for other organizations. And there may be wiggle room. Sure.
There may be wiggle room. I applied. I was like in the conversation with the company and they were able to come back and say something along those lines. When I asked for an increase in base, like, look, we have bands for this position and it’s across the company. Yeah. Like every one of your peers is within this range or at this level. And it’s like, alright, fair. I respect that again, coming back to transparency along the way, uh, they were very upfront as well about that. So there, so in summary, closing your top candidates, let’s go through a top, top three,
Stop three things always be closing. That means starting from your first call, whether that’s, um, selling the company culture, answering their questions in a really cool way, tip that we didn’t talk about before. Make sure you have really intelligent, fabulous people doing your interviews because you want to put your best foot forward and go away like go really. You want people that are a representation of your brand and make the candidate want to work with that person. And they have all the fields and they feel so good. So from the very beginning, have a grab great people on the phone, talk about the culture and the team and the growth in a really special way, craft your own story, work with your marketing team to get a story so they can talk about it and intelligence,
But also try to find things that are unique to that candidate, right? The value prop.
This is number two, number two, tell the equity story, um, be honest and upfront about equity. If that’s something that you’re able to offer as part of your compensation package, but then be able to craft a narrative and not just talk about strike price and investing. And here’s our schedule. And like no one cares. Actually, people do care. That was a lie, people care, but there’s something really special about telling that story and getting them excited. And it’s part of the selling process. And then number three, the offer experience, making sure you’re clear, transparent throughout the process, but then get them super jazzed. Hopefully get the yes on the phone before you send the offer letter and you go back and forth negotiating and set the right expectations, which then kicks off an incredible onboarding experience, which we’ll talk about later, um, to make sure that like a customer, you have an incredible experience throughout your sales and onboarding. So you don’t turn or they don’t leave and you have to back the phone. Okay. Great. Okay. Well, thanks for joining us and sticking with us. Hope this was helpful. If you have any questions, feel free to reach out. We’ll see you next time.