VC-backed start-ups and scale-ups in London often rely on contractors and interim roles to fill crucial positions within their organisations. These types of roles can be extremely valuable for these companies, as they offer a number of benefits that can help the company achieve its goals and drive growth. In this blog, we will explore the various funding rounds that a VC-backed start-up or scale-up in London might go through, and how contractors and interim employees can be beneficial at each stage.
One of the key considerations for any start-up / scale-up company is how to make the most of limited resources. This is especially true for companies that are backed by venture capital (VC), as these firms are often under pressure to deliver results quickly in order to attract further investment.
Contractors at seed funding round
The first funding round that a start-up might go through is the seed round. At this stage, the company is typically focused on developing a proof-of-concept and building out its initial product or service. Seed funding can come from a variety of sources, including friends and family, angel investors, and VC firms.
One of the main benefits of using contractors in the seed round is that they can provide specialised expertise on a short-term basis. For example, a start-up might bring on a contract software developer to help build out its MVP (Minimum Viable Product), or a contract marketer to help with early customer acquisition efforts. These contractors can bring valuable skills and experience to the table, and can help the company make progress quickly without committing to a full-time employee.
Contractors at Series A funding round
As the start-up progresses to the next funding round, the Series A, the focus shifts from product development to customer acquisition and growth. At this stage, the company may bring on more full-time employees to help with these efforts, but contractors can still play a valuable role. For example, a company might bring on a contract salesperson to help with business development efforts, or a contract customer success manager to help retain the customer base and a Head of Marketing to drive new customer acqusition.
Contractors at Series B funding round
In the Series B and beyond, contractors can continue to be valuable as the company scales and grows. As the company expands into new markets or launches new products, it may need specialised expertise on a temporary basis.
In addition to the specific skills and expertise that contractors can bring to a start-up or scale-up, there are a number of other benefits to using contract or interim roles. For one, these types of roles can be a more cost-effective option for the company, as they do not require the same level of investment in terms of benefits and other perks that come with full-time hires.
Many employers are nervous to start contract recruitment or look for interim support – the main reason for this is cost. Interim contractors can appear to charge high daily rates for their expertise. However, it’s important to consider the total cost to the business when looking at fixed term contractors. Costs including holiday pay, sick pay and employee benefits (life insurance, health cover, income protection insurance) do not need to be considered, meaning interim recruitment isn’t as costly as expected.
Contractors can provide a level of flexibility and agility that can be valuable for a rapidly growing company. If the company needs to pivot or change direction, contractors can be brought on or let go as needed, without the same level of long-term commitment as full-time hires.
Another benefit of using contractors is that they can bring a fresh perspective and new ideas to the table. Contractors who have worked with a variety of different companies and industries can bring valuable insights and best practices to the start-up or scale-up, which can help drive growth and innovation. Contractors are not tied to the company in the same way as permanent staff, which can allow them to approach problems with a more objective viewpoint. This can be particularly useful for start-ups that are looking to find new solutions to problems or are trying to pivot their business model.
What day rates should I expect to pay contractors?
Day rates will differ on a case-by-case basis, depending on the role, location, the business needs, the project objective and contract length.
Check out our guide to day rates for product, product design & UX, marketing and eCommerce disciplines.
In conclusion, contractors and interim roles can be extremely valuable for VC-backed start-ups and scale-ups in London at every stage of the funding process. Whether the company is in the seed round and focused on product development, or in the later stages and focused on scaling and growth, contractors can bring specialised skills and expertise, cost-effectiveness, flexibility, and fresh perspectives to the table.
We are a specialist contract / interim recruitment agency within product management, product design & UX, marketing, digital and eCommerce. Contact us today if you are struggling to find the right contractor for your business needs. We manage the hiring process from start to finish, including advice on day rates and IR35 rules. We also help to navigate the offer stage, any counteroffers and offer acceptance process.