Research Triangle Park-based venture fund, Southeast Interactive (SEI), has a trick up its sleeve that just might give their portfolio companies an advantage over competitors. And it´s so simple: a partner, Rick Sears, with a background in human resources.
While major corporations are still struggling with the notion that human resource executives should have a place on the board, SEI is building good HR practices into their companies from the go, particularly at the executive level. The firm recognizes that one bad executive can bring down a company.
Sears journey from HR director at a Fortune 1000 company to partner in a venture firm began after he joined a $750 million automotive company. "I had always worked in the automotive business," he told me, speaking by phone earlier this week. "When I joined this company we decided to take it public. I got bitten by the emerging growth company or private equity backed company bug."
Fast forward and Sears now owns an executive search firm, The Wilmington Group, based in Wilmington, North Carolina, which has a handful of larger companies as clients, but focuses on finding talent for early stage and private equity backed companies.
He meets Norvell Miller, general partner at Southeast Interactive (SEI), and Miller asks him to do an assessment of his own firm. "I gave him a straight forward analysis," Sears said. "I guess that impressed him because he asked my firm to start doing searches for the fund´s portfolio companies."
Eventually, Sears sells The Wilmington Group, nest egg in hand, hoping to retire. Instead, Miller proposes he join SEI as a partner to consult their portfolio companies on management issues and Sears, still suffering form the emerging growth company bug, agrees.
I asked him to describe the difference between looking for talent for Fortune 1000 companies and looking for talent for venture-backed companies. "Traditional organizations typically look for more narrowed focused talent, individuals who are more compliant, not risk-takers." he said. “If it were a CFO, the profile would be an individual whose career has been primarily groomed throughout the financial treasury. Early stage, VC-backed companies need people who more like a good athlete and better overall business person. A CFO for that stage company would have to understand the different disciplines. He may not have the depth of experience, but breathe of experience and must be entrepreneurial.”
I asked if he thought a corporate-bred CFO could make the transition. "If the CFO wants to make the break, it can be successful," he said. "But if they don´t have the sparkle in their eyes and the risk-taking profile it won´t work. You have to learn to get up in the middle of the night and make payroll."