Venture Capital

What are Operators for Venture Capital?

Being around startups and portfolio companies of private equity firms so often, it is easy for the team to become sucked into our own world, using colloquialisms that may make the average person's head spin. But, if we had to start from scratch with teaching the lingo, ‘operator’ would be the first word on the list.

What are operators?

Operators are the experts, the guys (and girls) that have been dragged through the mud solving problems, earning their stripes in a respective industry. They are subject matter experts in a few key specialties and help push a startup into a new phase of growth, with the help of some invested capital. These operators tend to stay away from the spotlight, and instead spend their time using their already honed skillset to figure out the current barriers facing a company, and how they can drive through those as quickly, efficiently, and quietly as possible. Operators are indispensable for true growth in any portfolio company, where sometimes the existing executive team can feel out of their element as they grow into heights never reached before - which is all in a days work as the former entrepreneur (or “intrapreneur”) operator steps in to guide the startup to greater glory.

While many VC funds do have former operators working on the team, the skillset necessary tends to be quite different, and being a very good investor typically doesn't equate to being a very good operator, and vice versa. It is a symbiotic relationship that helps each thrive, and the operators today are becoming more and more of a commodity as investors stray away from a ‘buy and wait’ approach, and rather take a much more active approach in building portfolio companies, regardless of a minority investment position.

How do operators in private equity and venture capital differ?

If you’ve been following us for long, you will find that ‘operator’ is most likely our most-mentioned word on the site. But, we have two core markets served, private equity and venture capital - and the difference between operators within the markets is significantly different than expected. As a private equity operator, there is a deeper focus on operational improvements, expanding or contracting business segments, and talent improvements. Within venture capital, an operator is focusing on hyper-growth customer acquisition, finding what ‘sticks’ and doubling down on this, and generally much more scrappy in their role i.e. wearing many hats. The simplest way to think about the difference is taking something from 0 to 1 in venture-backed companies and 1-100 in private equity. Both are absolutely necessary, high-impact feats that many simply are not cut out to do, but it requires slightly different skill sets. As a note: skillsets and areas of expertise will vary widely based on a specific industry, and less so based on company size.

How to find operators for a portfolio company?

So, now that we’ve identified that operators are absolutely necessary to 90%+ of investor-backed companies and they aren’t going to come in the same size or specialty, where are they found? How do you identify this key talent that will take your $1-20mm investment and give it a 10x return on invested capital?

Operators are no mythical beings, they can be found working for many of the top, high-growth companies, or building their own. The most common ways to identify them are via executive recruiters, which typically cost 20-40% of their would-be first year’s salary, another way is the slow, steady and much more annoying way of the classic job posting via LinkedIn, which, for a role like this (that may want to be kept secret in the first place) will receive between 200-600 applications on average, making it quite the task to find that diamond in the rough. The final way is to work with Flywheel, where you can find a deeply vetted database of operators unmatched in skillset throughout the country, hiring and searching at will, allowing for a ruthlessly convenient, quality-first tool in the hiring process.

Drop us a message below if you are considering hiring an operator to drive new value within your company, or if you have what it takes to be an operator but don't yet bear that title, request access with us for a brief interview.

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