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CHAPTER 2

PREPARING FOR YOUR SKIN IN THE GAME JOB SEARCH

This book has good advice for any job seeker or PEG hiring authority. However it was written for skin in the game Chief Officer (C-Level) executives to help them become hired by PEGs for one of their middle market portfolio companies. That’s my expertise. I have no retained search experience handling skin in the game C-Level assignments for any Venture Capitalists (VCs).

If you are entrepreneurial, a risk taker, and have a C-Level background in technology, visit NVCA.org and click on “About NVCA” then on “Members” and open up their list of over 400 mostly VC and some Leveraged Buyout (LBO) firms. Click on a VC’s website and click on “Portfolio”. See if any of their invested companies are a match with your credentials, experience, and industry background. If so, click on “Team” and then locate the person to email, such as the Partner in Charge or Managing Partner, General Partner, or Partner. Let them know you are a C-Level executive (give specific title sought) and attach your resume. Would they be interested in discussing you putting some skin in the game in the right VC company in exchange for some equity? What would the next step be? Take it from there and do plenty of sound due diligence. Consult an attorney and tax accountant about any eventual agreements involving money, stock acquisition terms, and written job offers.

THE DIFFERENCE BETWEEN PEGS AND VCS

PEGs raise funds from Limited Partners, accredited investors, endowments, insurance companies and the firm’s Partners. Such funds are not open to the public. Lower middle market PEGs often use LBOs to acquire existing companies in the $10M-$50M sales range. Middle market PEGs acquire private companies typically in the $50M-$250M sales range. Companies come from all industries. They will provide growth capital, as required, to increase the return on funds. PEGs typically hold their equity investments in companies for four to five years. Then they successfully sell their holdings to either a strategic buyer or financial buyer and share the equity profits according to each investor’s stock holdings. This is called the “exit” or liquidity event. Most of my C-Level hires have multiplied their initial skin in the game investments in my client PEG’s portfolio companies for lucrative payouts.

VCs pursue riskier startup ventures and will loan capital at 20%-30% interest rates. Companies who default on their exit loan payments are obligated to exchange VC loans for company equity. VCs also invest capital in equity, focusing on technology companies promising big potential returns. They usually invest their risk capital taking minority equity positions below 50%. VCs may each invest small amounts in a dozen pre-revenue and early stage companies. VCs experience much higher failure rates than PEGs. VCs’ successes can often make up for their more frequent failures.

Ask yourself, “Can I work and thrive in a private equity owned portfolio company after putting some of my own skin in the game?” Do you have the temperament to risk some of your own money in the equity of your next employer?

In one scenario, I was asked to fill a SITG CEO position that had two previous CEOs in sixteen months. It can be a “take no prisoners, all or nothing” environment, depending on what your due diligence turns up in certain PEG investor C-Level job opportunities. However, working for the right PEG can have growth challenges, growth opportunities, and spectacular financial results. In the mid-1990s, I filled a search for a SITG CEO with a New Hampshire manufacturer owned by a prestigious, profit-oriented, successful PEG. My candidate, Al S., invested $100K in equity, performed well, received additional equity bonus shares, and earned more than $11M at the company’s liquidity event five years later. I have been involved with dozens of successful SITG C-Level hires. They have put up to $100K in skin in the game for company equity, amassed additional stock options, and earned millions for helping increase PEG companies’ targeted EBITDA growth levels at the time of their liquidity event.

That is why I have written this book. During your networking efforts to meet PEGs through mutual contacts, try to be in contact with SITG C-Level executives about their own PEG employment experiences. Ask for PEG referrals.

In tight lower middle job market cycles, like the 2008-2014 era, highly qualified competition for C-Level job opportunities have been the norm in a number of industries. If you have an undergraduate degree and an MBA from one of the branded schools, and have been in the top 10% of your classes, your resume will attract immediate attention with certain PEGs and their headhunters.

If your employment record demonstrates you have moved up the promotional ladder with branded companies, again, you will generate instant interest from a number of PEGs and their headhunters, especially if you are still employed. You may have influential branded contacts. If so, they will positively impact your chances of being interviewed by a PEG. Congratulations, you are off and running. Hopefully you can duplicate this winning formula until you make a match with the right PEG to secure a SITG C-Level job. In my experience, such top branded job candidates do not typically undergo deeply probing interviews or comprehensive reference checks by the PEGs. PEGs will typically leave most or all of a branded candidate’s references to be checked by their search firm.

The following is a good example of the tough competition in the current job market if you are a non-branded (though highly qualified) C-Level job applicant/candidate vying for similar jobs. A job competitor might submit a more impressive resume than yours, claiming many accomplishments, or have their MBA or MS degree from a prestigious university. Your competition may be well positioned in that they are fully employed with sterling resumes without breaks in their employment dates nor frequent job changes. You may also be a lot older than most SITG job competitors.

Such challenges for job openings face non-branded but qualified candidates. This also applies to typical retained search firms flush with resumes of qualified, interested, and branded job candidates. These candidates are often surfaced by the big branded search firms’ research departments.

Ask yourself: do you think your well-prepared resume alone is likely to secure you an imminent phone or face-to-face interview if it’s screened by a headhunter for a PEG’s C-Level job, or by the PEG itself?

If you follow my advice and prepare yourself properly for the skin in the game job search campaign, you will become a formidable contender for the right job opportunity. I suggest you follow the chapters sequentially so you understand my overall strategy, and then execute my instructions. My advice requires effort on your part with no short cuts and will help you overcome your lack of top school branded education or and having worked for unbranded companies. Furthermore, these chapters help overcome any unfortunate short tenured employment periods and will alleviate your “old age” concerns. Expect keen competition for any potential job for which you may be considered. You’ll be ready to deal with the competition after you have finished this book.

I will prepare you for the PEG interview, if it’s a job you really want and for which you are qualified. I will help you gain confidence with referral sources, even those you do not know well, who will in turn recommend you to PEGs.

After forty years of retained searches predominantly for Fortune 500 clients, privately held companies, and lower middle market PEGs, an alarming number of interviewers do a poor job of screening candidates. Too many interviewers are ill-prepared, relying only on the candidate’s resume, their gut feeling, mutual chemistry, and whether the candidate is a dynamic interviewer saying all the right things. A significant number of C-Level executive job interviewers include those that are unqualified, surly, or simply incompetent. In certain cases I have asked to sit in on the candidate’s interview with the hiring authority to try to keep the interview process on track and productive. Fortunately none of my referred candidates were allowed to interview with our client PEGs before undergoing significant reference checks and credentials screening.

To counter this major hiring problem, I offer our PEGs a complete turnkey hiring process. I do the dirty work myself. I handle everything from getting the Non-Disclosure Agreement (NDA) signed to producing a life bio on each candidate (later named the Indiana Jones Bio). I verify the candidates’ academic degrees and certifications. Almost every search turns up at least one phony MBA or a candidate omitting a past job or two from their resume. I have each search candidate rate themselves from one to ten on their degree of qualifications for the key aspects of the C-Level job for which I am screening them. I complete a written interview of twenty-five questions for each candidate to answer, and I do all the major reference checks in writing before any candidate’s information binder is sent to our client. The end result has been an average of four search candidate binders referred per completed search assignment. My successful hire completion rate has been in the ninetieth percentile over the past twenty-eight years.

Why am I describing my search process to you? Because I am applying my proven due diligence C-Level job search approach to your successful pursuit of a skin in the game job.

Occasionally, PEGs will complain that they didn’t know what to ask my candidates in a face-to-face interview after reviewing an SITG candidate’s 3 ring binder from me. My philosophy is the more details a client is presented about my candidates, the better their hiring decisions.

This book will help you better manage your skin in the game job search process. Remain motivated, focused, humble, and courteous to all, especially anyone in a position to be of help to your ultimate job search goal. There are untold numbers of competitor job seekers after the same jobs you are seeking. Become a well-prepared, organized, and confident “evidential” skin in the game candidate loaded with your due diligence backup. Too often, many potentially good C-Level executive hires are inadvertently sabotaged by someone on the hiring authority’s interview team. These saboteurs have no real stake in the hiring outcome and often go with their gut reaction to a candidate. Many times the latter interviewer is a board member, trusted friend, or someone in charge of another business owned by this PEG. Often such a person doesn’t even have a copy of the C-Level job specs. You will be ready if that happens if you follow my preparation advice before interviewing. If you do the work, you’ll see positive results.

Let’s say you are a senior executive seeking the right skin in the game job opportunity. You’re impatient, you want action. You want a steady flow of networking meetings, job interviews, and SITG C-Level executive type job offers. You are ready to write your equity check, start working, and lead your team, producing results towards your upcoming liquidity event. Okay, I hear you loud and clear. Let’s get started now!

HERE’S YOUR MASTER JOB SEARCH TO DO LIST:

 If you lack a home office then rent an inexpensive, established, private temp office set up with a receptionist, desk, file drawers, computer, email, fax, and long distance phone with voicemail.

 Write your Indiana J. (optional), especially if you haven’t looked for a job in many years. Your IJ Bio should help strengthen your interviewing skills and your resume whether you have it done professionally or do it yourself.

 Write your powerful, influential resume reflective of your credentials, results, contributions to company growth, sales, profits, and functional title(s). Instead of listing just responsibilities, mention obtained results. Avoid adjectives. Provide data, key performance indicators (KPIs), performance measures you tracked, critical key metrics achieved such as EBITDA, and sales growth. Keep the PEG hiring authority target for your resume in mind (see chapter 5).

 Write a focused, influential, persuasive cover letter (see chapter 5).

 If you want expert help writing your resume, check out the three qualified and proven professionals I recommend in chapter 5 and select one to best assist you with your resume and cover letter (mention that I referred you).

 Select references that you have worked with and for, and mail them your resume to obtain reference letters from them. Ask for at least a paragraph on their letterhead confirming any of your accomplishments stated in your resume that they can verify (see chapter 7). Most PEG clients I have represented view typical reference checks with a grain of salt. Exceptions would be other PEGs that employed my clients and people known to my clients. My approach to references has been successful through trial and error for over twenty-five years. It’s based on you producing a people profile who know you professionally and are authoritative within their company. Even list those individuals you might prefer the PEG not to contact for reasons discussed later. For many skin in the game job seekers, chapter 7 may be the most difficult chapter to emulate.

 Set up your LinkedIn profile (see chapter 8).

 Are you consulting part time while seeking skin in the game job opportunities? PEGs often engage specialist consultants on projects that can lead to full-time opportunities. Make up and order 100 inexpensive tasteful consulting brochures and business cards (see chapter 10).

 Prepare your presentation portfolio for PEG meetings. Order a dozen Esselte Oxford Poly 8-Pocket Folder-Letter Size (see chapter 10).

 Rehearse your three minute personal elevator pitch (see chapter 8).

 Organize your networking plan (see chapter 6).

 Order 500 business cards with your name, address, city, state, zip, your email, cell phone, and home phone (with 24/7 voicemail capability) on the front. On the reverse side print your skin in the game function and whatever industry or industries you are focusing on.

 Do your research for targeted middle market PEGs to contact and targeted PEG portfolio companies in industries your background matches (see chapter 9).

 Once you’re ready for a job offer, check out chapter 11.

 Conclude your to skin in the game job search (see chapter 12).

Maybe you are one of the lucky ones who is a graduate of a branded school with high class rankings and have your MBA. You are employed with no job history gaps and you have the right connections, a dynamite resume, and you interview famously. If there is a PEG with a SITG C-Level job match for you, congratulations; you will be hired. For the rest of you, this book will help you get there if you are interested, qualified, and can actually do the SITG C-Level job well. The advice I offer in this book will definitely help you if you’re willing to do the work. Good luck!