Advice on choosing an exec search firm

Yesterday BVP’s Head of Talent, Miia Laukkarinen, was asked by one of our portfolio company CEOs for some advice on what factors to consider when choosing a search firm. I liked her response and I thought I would share it. I’ve edited it slightly to remove some company-specific information.

Here are some basic things you should consider when hiring a search firm:

  1. Relevant search experience. Ideally someone who has done similar work either functionally or in the industry space.
  2. Off limits. Ask them what companies they would target, and discuss any companies that YOU like in particular. Ask them if any of those companies are off limits to them (former clients/can’t recruit from)
  3. Fees. Ask them for a contract proposal so you see what they are suggesting for fees, guarantees, etc. Try to negotiate the fees so that they are capped (so you know what you will pay in the end); and how they guarantee their work (I recommend negotiating a free redo if the placed candidate doesn’t work out or leaves within one year)
  4. Who is in the search team? Many big firms have associates who run the search behind the scenes. That is not necessarily a problem, but ask to include the associates on all calls so that you can meet them (at least by phone) and ensure they know how to sell your company. They are the first interaction the candidates get so it’s essential you have a strong associate.
  5. Capacity. Ask how many searches the partner is working on now. I wouldn’t hire someone who is working on more than 5 searches unless they are close to a hire on some of them. Ask them how long those searches have been open: if less than 6 weeks, they are on a very time-consuming mode, which leaves less time for you.
  6. You should like and respect the person you are working with!

For back references, you can see if you know/have a connection to any of his former clients (from his search list) and contact them to get their opinion. If you’d like, I can also introduce you to one of our portfolio company CEOs where he did a similar search last year.

Needless to say, Miia has been a great addition to our team. She’s not only been a great resource to our portfolio company CEOs and exec teams and a strong liaison to the executive search community, but she’s also helped to ensure that super-star executives stay within the BVP family of companies. We realized a few years ago that some of the most talented entrepreneurs in our orbit had worked at numerous BVP-backed companies throughout their careers (serial BVPers). Miia helps us to systematize the process of identifying and maintaining these serial BVP entrepreneur relationships.