Venture Capital Firms Encourage HR Outsourcing to PEOs

Is your Start-up Company attractive to Venture Capital Funding?

So your fledgling company is ready to grow. You have a great product, strong sales growth and a business plan to dominate your market. The only thing you need now is funding to make it happen. So you may be considering venture capital to fund your expansion. If you have made the decision to consider funding from a VC firm, and you want their investment, then you must understand the criteria they will use to make their decision about whether to invest in your company. Volumes have been written about this subject of getting noticed by VC firms and how to get funding, but there is one aspect you may not have considered: Demonstrating your focus.

Pretend you are the Venture Capital Analyst

Just for a moment, pretend you are the person reviewing a start up company and are considering making an investment in the company with your own money. What criteria will be most important in that decision? There is a long list that we will not review here, but certainly one of the criteria will be: Am I confident that the start up will use my funds to grow the company quickly and not burn it up with the distractions of implementing an administrative bureaucracy and meeting regulatory compliance. As a venture capitalist you want the management team to demonstrate single minded focus on product, service and growth.

Why Venture Capital Firms like PEOs

So how can you demonstrate to VC funds that your focus will not be distracted by the administrative tasks of running your start up company? Hire a Professional Employer Organization (PEO). A PEO will handle payroll, workers’ compensation insurance, health insurance, supplemental insurance and a myriad of regulatory obligations associated with being an employer. Outsourcing these tasks to a PEO demonstrates that your company is focused in the right place, and your management team will not be distracted from your company mission. In addition hiring a PEO can provide instant access to a suite of employer benefits that make your start up company a great place to work.. important for encouraging people to join your team. According to our contacts, General Atlantic Partners (one of the largest VC firms) has roughly one quarter of their investment portfolio using a PEO.
Why Entrepreneurs Should take a look at hiring a PEO

Finding the right PEO

StaffMarket has helped thousands of business owners and managers find the best fit PEO for their company. With over 700 PEOs operating in the USA, finding the best fit PEO at the best price can be a challenge. StaffMarket has profiled the service and benefits offerings of most of the PEOs in the USA and can help your company quickly target the top PEOs (your short list) and then get competitive quotes to assist your decision making process. Put our team of PEO experts to work for your company. Together we’ll help you find the right PEO for your company.