Tech startups around the world are awash with cash right now, thanks to hedge funds, traditional investment firms, and billionaires piling in alongside VCs to back businesses.
Europe is no different, with €3.47 billion (£2.5 billion, $US3.92 billion) invested in tech startups here in the second quarter of the year, according to Tech EU. The UK took the biggest share of that, accounting for €992.9 million (£725.7 million, $US1.12 billion).
As a result, tech startups have an insane amount of buying power right now, particularly when it comes to hiring top talent.
Gordon & Eden is an executive hire firm based in London that specialises in bridging the gap between tech startups and big businesses, with hires going both ways.
Founders Sophie Eden and Sam Gordon tell Business Insider that on several occasions they have seen startups poach executives who were in line to take top jobs at traditional “big corporates.”
Most of the poachers had only raised Series A or even seed funding rounds — meaning these are really, really early stage businesses. Real startups.
On one notable occasion a stock market listed big corporate had offered a candidate an executive role with a base salary of over £100,000 ($US154,000), plus pension and bonus.
Then a startup swooped in, matched the salary, and dangled a big carrot of shares in the business. The candidate joined the startup.
The key, Gordon says, is that startups are realising they have to pay for top talent rather than just offer equity, as startups would have done a few years ago.
Gordon says: “Startups no longer expect people to sweat for equity. And if they do, they’re limiting their talent pool.”
Startups are laying out six-figure salaries for executives even if the company is just starting out.
That’s because tech businesses are realising that in some cases it’s worth getting experienced people from the corporate world to help them grow.
But the key to all this, Gordon and Eden say, is the money. It’s all very well to realise top corporate talent if worth it but if you haven’t got the cash to tempt them you’re stuck.
A few years ago most startups in London wouldn’t have been able to match the salary of a huge corporation. Now they can, thanks to the tonne of investors who are more than happy to stump up the money.
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