How to address candidates' concerns about your startup’s financial health
Max Kolysh
CEO @ Dover
August 16, 2024
•
3 mins
Startups are exciting opportunities for job seekers who are passionate about what they do and who want to be part of building something from the ground floor. But startups aren’t always a sure thing, and the stability of a larger corporation can also be appealing. And these larger companies also don’t offer the same culture and unique opportunities as a startup.
However that doesn’t mean potential hires will just jump at the opportunity to join any startup. The last thing candidates want to do is go through the arduous job-hunting process, only for them to need a new job a few months later. Being transparent is better for both the candidate and the company, as you can assure them of your company's stability and gain their trust at the same time. Plus, candidates deserve to know what they’re signing up for.
With that in mind, startup founders and those in the hiring process should be prepared for potential hires who want to know more.
One of the best ways to make potential hires feel more comfortable is by honestly answering their questions about the startup’s health. This also means being prepared for those questions.
Here at Dover, our Interview Specialists conducted over 45,000 interviews across various startup roles over the years. They noticed that questions about financial health have only become more frequent and detailed. Some of the things candidates are asking about include:
Runway - Candidates want to know how long the company can continue operating with its current funding.
Revenue - Candidates want to know about primary revenue streams, how stable revenue is, and if revenue is on track for the future.
Burn Rate - Candidates want to know how quickly companies are spending their capital.
Past Layoffs - Candidates want to know if there were layoffs in the past and why they happened.
Growth Trajectory - Candidates want to know how much the company expects to grow in the coming months and years.
Upcoming Milestones - Candidates are interested company's goals. They want to know about upcoming milestones for company hopes to hit and past milestones they’ve achieved.
Candidates are increasingly unafraid to ask these questions, and for good reason. Every potential here wants stability and top talent is going to carefully consider where they land. Startup founders can prepare for these questions and give honest answers that make candidates feel more comfortable moving forward with the company.
Transparency is crucial for modern startups that want to bring on passionate, high-quality candidates. When you give candidates honest answers about your company’s financial health and future, they’re more likely to trust the company, accept an offer, and stay with the company for longer.
Transparency also helps to build a culture of trust in your startup, which is essential as you build and grow your company. Transparency and communication with leadership is something that your new hires can depend on going forward, and it also helps them feel more comfortable providing feedback and reaching out to leadership when they hit obstacles. Overall, transparency and trust help to fuel communication, collaboration, and innovation in a startup environment.
As you build this culture of trust, your team will also be more comfortable referring other top talent to your company, helping you to build a startup with employees talented, committed, and passionate about what you’re doing. It also helps differentiate you from other startups that neglect transparency, giving you a competitive edge when it comes to attracting top talent.
How to communicate your startup’s financial health effectively
So, we know transparency is important, but how do you effectively communicate your financial health to candidates? The key is preparation. Keep in mind that candidates are often the ones to lead these conversations, so being prepared for their questions will show them you value transparency and are happy to keep them apprised of how the company is doing. Here are some good ways to prepare and communicate with candidates effectively:
Prepare Key Financial Metrics - Make sure you have key financial metrics like revenue, runway, and burn rate on hand.
Discuss Funding Rounds and Investors - There’s a good chance a qualified candidate might ask about funding. If your startup has secured funding recently or brought notable investors on board, this can reassure candidates of your credibility and financial future.
Talk About Challenges - Be open and transparent about any challenges your company has been facing. You might even be hiring the candidate to help with these challenges, so this can get them prepared for the work ahead. It also shows them that leadership doesn’t try and hide challenges and that they use the skills of their team to help address them.
Talk About the Company Mission and Plans for Growth - Share your company’s mission, vision, and milestones for growth. This not only gives the candidate more context for your company but helps you find out if they align with your startup’s mission and if they’ll be a good culture fit.
Provide Context for Past Layoffs - If the company has had layoffs, explain the reasons behind them and what has been done to prevent similar situations in the future. This can help candidates understand the context and see that your startup has learned from past experiences.
Leverage Dover’s expert recruiters & interviewers
Navigating the startup hiring pipeline can be difficult, especially if you don’t have the resources or the team to interview highly qualified and inquisitive candidates. That’s where the help of an external recruiter can make a big difference. Dover can help by connecting you with our Recruiting Partners.
Dover’s Recruiting Partners are expert full-cycle startup recruiters who can handle conversations with candidates, screen resumes to find top talent, and get you great hires. Your Recruiting Partner will act as an in-house recruiter and extension of your company for a fraction of the price. Our recruiting partners are priced for startups, with an hourly rate where you can use them as little or as often as you need. Bring on one of our partners today to help you with the sourcing, screening, and interview process.
Try Dover’s free ATS for founders
Another great way to improve your hiring pipeline is by using an applicant tracking system (ATS). An ATS can help you streamline communication with candidates, compare notes with hiring stakeholders, source candidates, sort resumes by best match, and much more. The only downside is that some applicant tracking systems can be expensive.
With Dover, you can get the benefits of an ATS for free. Interested in learning more? Give Dover a try today!
