Nov 18 2012
Venture capitalists (VCs) are paying more attention to the structure of the marketing teams they invest in and when hiring for CMO jobs. Why? Because marketing plays an increasingly influential role in the success of their portfolio companies. To ensure that the marketing department can generate the kind of leads that drive sales, they want to see a particular profile in a marketing executives.
Whether you’re a company seeking venture capital or a marketing executives looking to make the leap to a startup or expansion-stage company, it’s important to understand what VCs look for in a marketing leader. At Software Advice, I recently caught up with a couple of VCs to ask them what they’re ideal marketing candidate profile looks like. Here are five characteristics they prioritize in a candidate.
1. They Think and Speak in Metrics
Today, we hear a lot about the need for a left-brained marketer that is comfortable analyzing data and crunching numbers. VC’s gravitate towards marketing executives that are comfortable with metrics. As Greg Goldfarb, Managing Director of Summit Partners, puts it “Marketing is not a mysterious function, it’s not a creative-only function. It’s a function that has to deliver quantitative results to the business and drive sales.”
VCs want someone who can talk about concrete business terms and discuss things like the conversion rate of marketing material and their contribution to the growth of marketing-qualified leads. For instance, they want a candidate that can say, “I grew marketing-qualified leads from 2,000 per year to 7,000 per year and reduced the cost per lead from $60 to $35.”
2. They Can Succinctly Sell a Story
Of course, in a VC-backed company environment, the left-brained qualities need to be complemented by right-brained storytelling capabilities. This means they can quickly explain how the company’s offering solves the customer’s pain-- and why they should buy from this company rather than a competitor. But they have to be able to frame this in 30 seconds or less. If it takes 30 minutes to do all this, then VCs figure that they’ll have trouble telling a convincing enough story to sell.
3. They’re Well Connected
It’s also important for the marketing executives to be well-connected. This means knowing people within the company’s industry, as well as influencers in the press and analyst community. In my industry, enterprise software, this would mean knowing individuals at analyst firms like Gartner and Forrester--and getting placement in one of their industry breakdown reports, like the Gartner Magic Quadrant. But it’d also mean having a record of getting attention at tech publications like TechCrunch and GigaOm.
4. They’re Versed in Modern Marketing
Individuals with a background limited to traditional marketing channels (e.g. print media and billboard advertisements) are generally considered the wrong fit for a VC-backed company. Instead, VCs want individuals that focus on marketing strategies like search engine optimization (SEO), pay-per-click advertising (PPC), conversion rate optimization and email marketing.
One skill that’s in particularly high demand is adeptness with marketing automation. This is a preferred skill because individuals used to working with these systems are used to tying their marketing efforts to a discrete return on investment--which is ultimately what VCs are expecting their portfolio company to generate. Candidates who can use these strategies to improve brand awareness are particularly valuable.
5. They Have C-Suite References
VCs also want to see that the higher-ups in a candidate's previous company give their stamp of approval. In particular, VCs want to hear from CEOs and heads of Marketing that the candidate has a track record of driving top-line growth. These references are important because these individuals are the best able to judge the candidate's contribute to incremental revenue and their ability to drive a return on invested capital.
While this isn’t an exhaustive list, it helps get companies and marketing executives looking for CMO jobs a good head start in understanding what is expected of a marketing leader in a VC-backed startup or expansion-stage company. What’s your experience on this topic? If you have an tips or insights, please let us know on Twitter @BlueSteps.
BIO: Derek Singleton is an analyst at the Austin, Texas based research firm Software Advice. Derek joined Software Advice after graduating from Occidental College with a degree in Political Science. He reports on technologies topics and trends related to B2B marketing, CRM, marketing automation and sales trends. His writing has appeared in various tech publications such as Sandhill, Sys-Con and ZDNet.