Avoid massive hiring after successful fundraising

Most founders will hire a large number of additional staff after successfully raising capital, without knowing that this can do more harm than good.

With plenty of money, plus pressure from investors, partners and their own expectations of growth, many founders choose to hire 20-30% of new staff after receiving investment capital.

However, in reality, if the model is not good enough, the founder's management capacity is not sufficient, the start-up will not take full advantage of the potential of the newly recruited staff. This will only cost the start-up more, while the sales will not be much. Even the surplus of staff makes some departments ineffective, thereby reducing the overall performance of the company.

In addition, another obvious consequence of massive recruitment is the disruption of corporate culture. In the early stages of establishing a start-up, corporate culture is often formed by the founders and the first group of employees. They share a common vision, overcome difficulties together and are committed to long-term goals. However, when recruiting too quickly without paying attention to team harmony, these core values can easily fade. From there, conflicts may arise within the business, making it difficult to achieve common goals.

For experienced founders, after 3-4 months of not seeing results from recruitment, they choose to cut down drastically. But for inexperienced founders, most continue to keep them because they feel safe when the company has a full board and leadership. They are also afraid that when the company grows in the future, they will have to worry about recruiting new staff.

“If you keep hesitating like that, you might run out of money in just a few months,” startup expert Hai Nguyen shared in an online seminar.

According to Mr. Hai, instead of using capital to hastily expand the staff, founders should be smart in choosing a recruitment strategy. With the same budget, they should keep the staff at the bottom, only recruiting a few senior positions. At the same time, startups can outsource.

For startups that have hired too many people but are not effective, and their cash flow can only last about half a year, the most urgent solution is to quickly cut down the newly recruited team.

Mr. Hai gave the example of the start-up Vua Cua - a chain of stores specializing in selling crab dishes. After joining the board of directors, this expert advised the founder to cut 2/3 of the staff. As a result, the start-up lived "healthier", sales increased better. Instead of having to focus on resolving internal conflicts, the founder had time to raise capital and expand the market, thereby promoting the start-up's products to the US market.

Source: https://baodautu.vn/tranh-tuyen-dung-o-at-sau-khi-goi-von-thanh-cong-d239501.html