| The venture capital industry competes in a volatile | | | | role in vetting a prospective investment. "We know |
| marketplace typified by high risk and high reward. | | | | our strengths and weaknesses," Pai says. |
| Venture firms invest millions of dollars on seasoned | | | | "Sometimes venture firms know it's best to look for |
| executives and entrepreneurs who present great | | | | outside help." |
| promise of creating significant shareholder value with | | | | A top executive search firm can also play a critical |
| the identification of the next big idea or innovation | | | | role in helping investors source attractive investment |
| that will revolutionize an industry. | | | | opportunities. "Due to the many privileged |
| Whether an investment yields financial rewards | | | | relationships that we share with leaders of industry |
| depends on the delicate balance of innovation, | | | | and sources of private equity and venture capital, we |
| market conditions, leadership strategy and countless | | | | find ourselves at the intersection of human capital |
| other uncertainties. In making the complex calculation | | | | and investment capital. Because of the limited number |
| of whether to invest in a promising new venture, | | | | of quality deals that are truly worthy of investment |
| many venture capitalists often overlook one critical | | | | backing, venture capital and private equity firms rely |
| factor - the human capital component. After an | | | | on being introduced to titans of industry with the |
| investor invests capital behind a concept, it takes the | | | | next big idea," says Donald Law, Managing Director of |
| right management team to get a company off the | | | | nationally recognized executive search firm Venerable |
| ground and execute the company's strategy. | | | | Partners. |
| Raj Pai, a principal at CID Capital, a 26 year old | | | | Pai says CID Capital recognizes the critical value of |
| Midwest based venture investment firm that | | | | human capital, so now the firm hires an executive |
| manages over $300 million of investment capital and | | | | search firm like Venerable Partners to assist with |
| specializes in life sciences, information technology and | | | | nearly 70 percent of its investment deals. One of |
| business services, says he has seen human capital | | | | those successful investments was in Red Sky |
| "make or break" investment deals. | | | | Technologies, a Chicago-based company that |
| Pai remembers an investment his firm made in a | | | | provides emergency response telecommunications |
| technology company that fell apart because the right | | | | services. |
| management team wasn't in place. Pai says the | | | | Pai says his firm hired executive search firm |
| company's founder had problems with communication | | | | Venerable Partners to make sure Red Sky had the |
| and delegation that didn't come to the surface until | | | | human capital to thrive. |
| after CID Capital made the investment. Even though | | | | Pai says executive search firm Venerable Partners |
| the technology was innovative and the market was | | | | was able to identify several seasoned industry |
| ready to receive it, Pai says the company couldn't | | | | leaders who might be interested in contributing to |
| survive without the right leadership. | | | | Red Sky. In the end, executive search firm |
| "You can go from everything's okay, to all hell is | | | | Venerable Partners recruited a high-ranking Fortune |
| breaking loose in one month, and that's what | | | | 50 executive to serve as a board member to advise |
| happened with this company. We had to shut the | | | | the company's management team. "What we need |
| whole company down, and lay everyone off." | | | | to hear from them is the big macro shifts that are |
| Pai says that identifying the best management talent | | | | occurring in the industry, and you can't buy that |
| takes more than just sifting through stacks of | | | | talent," Pai says. |
| resumes. Innovative leadership - the kind it takes to | | | | Pai says CID Capital would not have been able to |
| turn a bright idea into a profitable company - | | | | recruit an executive with such a high level of |
| depends on all kinds of intangible factors, such as | | | | expertise on its own had it not been for partnering |
| how an executive copes with stress or how she or | | | | with a top executive search firm like Venerable |
| he interacts with the board of directors. | | | | Partners. |
| Many of the most successful venture capital and | | | | "I don't think we would have been able to tap a |
| private equity firms partner with a top executive | | | | person like this to help. But somebody's got to bring |
| search firm to help ensure the success of their | | | | the horse to the water. This particular executive got |
| portfolio companies. In addition to recruiting senior | | | | involved because he bought into the idea, but it was |
| executives to serve as management team and board | | | | executive search firm Venerable Partners who |
| members, an executive search firm can play a critical | | | | brought this industry veteran to the water" says Pai. |