Creandum’s VP of talent Michelle Coventry: What it’s like being at the other end of Anton Osika’s WhatsApps

0:01Hello, as usual, it's your host, Amy Lewin. A startup is, as all of us in the industry know, as strong or weak as the team that builds it. That's not to say that great teams can't fail, but hiring top talent certainly helps make that less likely. Joining me on this Ift of podcast today is someone who spent the last several decades learning this. Michelle Coventry is VP of Talent at European VC Creandum, where she spent a lot of time over the past year advising super fast scaling companies like Lovable and Black Forest Labs build out their teams and figure out what exactly the scaling playbook should look like in the age of AI.

0:40She also leads on the firm's annual founder compensation report, which will be out by the time you listen to this podcast, and which we'll talk about today. Before joining Prandom four years ago, Michelle was VP of people at self-driving car company 5AI, an advisor to VC firm Kindred, and the founder of Maven, a talent consultancy for European startups. Michelle, I am so delighted to have you. Thanks, Amy. It's great to be here. And this is my inaugural and you're very, I feel very privileged to be here today. Thank you for taking the chance on us and thank you for hosting us. We're here in Creandum's lovely London HQ, which I remember from the last time I was here, always has lovely smelling candles as you walk in.

1:22It's a nice touch. um so michelle little birdies in the ecosystem tell me that leandum is doing very well at the moment the portfolio includes some pretty hot companies as i mentioned in the intro black forest labs and lovable in ai also some unicorns like the hr company factorial and the energy company fuse and the firm has had some big opportunities to get all important returns recently for example setting shares as part of trade republic secondary sale in december so my question is when a company starts really taking off like lovable was this time last year is it just all hands-on get for you helping them out and what does that actually look like day to day what's going on in your emails what's going on on your apps yeah great question a number of years ago I overheard a couple of partners not at Creandum actually previously talking about the very best founders don't need help and bringing that into today I would really challenge that because it is all hands on deck the founders that we back vary in location geography you just mentioned a few I would say that the last the last seven investments have all been native AI companies from all over Europe and the US.

2:45So we're very heavy in the US at the moment. The traditional companies are going through, when I say traditional, I mean traditional of 18 months ago. This is how fast it's going. So yes, it's all hands on deck because in some countries, it's quite hard to actually get people to join you in two days like it is in the US. And so therefore, there's this interim lag period before humans arrive. But everyone's so differently they don't always need humans what's some creative ways that european companies get around that i feel like i've heard of you know people maybe even like being you know what kind of incentives are there or sneaky things can people do to get out of jobs faster and into new roles quicker it depends very much on where the rex team how their legal team feel about certain things and if they're going to a competitor but certainly i haven't seen the the the comeback of embedded or interim players fractional people being used until the actual new joiner comes that's not unusual but it seems that in the last in the last year we've actually deployed more fractional people into the portfolio until someone comes along and we've actually had people who've gone i'm just thinking about um black forest labs that you mentioned we introduced a interim chief people officer and fell in love with the company and then she's there now so people do translate if they find that like company and so when say say lovable or another company you've invested in them they're saying okay we're gonna launch these products or launch in these countries or do xyz do they just do they come to you and say okay Michelle who do we need to hire no it typically so and and this maybe we'll touch on this later about how things have changed but in the good old days of last year you could sit down with the founder the minute the money has hit the account or even before that as part of the DD process about how they're thinking about attracting and retaining and building that team that they often have an eye for where do we need to get to before the next round that could be headcount it used to be headcount it's no longer headcount but it used to be headcount it used to be revenue it used to be which customers and and still to a point the customers matter for the next round of funding we used to sit down and actually say great if you're going to get there then what is the people the group like that are going to get you to that point so is that product that customer success that go to market and it was relatively full relay you did have a paper you could say okay okay, right, so when we go targeting, we need to have X number of AEs by X number of SDRs.

5:28And that's the biggest share that I've seen. And I think we're still working through what that might look like if there's going to be another formula come up again. But it certainly seems on anything that's product-led growth does require much less headcount than enterprise. Enterprise is slightly lagging in terms of reducing quite large enterprise teams being built. but yes everything that we thought we knew last year we've ripped up in the last year and I would say the level was one of the first in our portfolio to set pace on that and we've learned from that very quickly we've iterated we've adjusted but I wouldn't stay set what what are some of the key learnings you've had from working with Loverboard has that helped you get a sense of what a new playbook might look like so it's more about whether you're building publicly or not so So Anton and Fabian, right from the get-go, it was all about building on LinkedIn and really essentially sparking a brand, which was fantastic.

6:28And people caught on to it and they were, you know, trying the software, downloading it, just chatting, building products straight away. And I remember meeting them in November 2024 and they were probably, they just launched some product launch and they were probably a couple of million ARR. And then that was going every single week. And then we suddenly realized that we couldn't do the traditional wait until your head of talent, wait until your chief people officer. We had to bring all of that much faster forward. So all of the timelines are significantly condensed. We used to have 12, 18 months before maybe you layer in some senior talent.

7:09Now that's months because they're raising in months. So everything is much more condensed now. So seniority, it's probably one of those things and having this, getting the right seniority in the context of the role. So that the fundamentals, the principles didn't change, but the pace at which it was happening was just unbelievable. Does that sometimes lead to some trickier dynamics? I'm thinking so many founders in AI in particular seem to be younger than ever, or maybe they haven't run a company before. And they're almost bringing in the quote-unquote grown-ups at an earlier stage than they used to, when they haven't even had so much learning on the job.

7:53Is that something you have to navigate when you're picking the grown-ups to bring in? I think with all the challenges that they're facing, that's probably the least of their worries, if I'm honest. The seniority and context point is quite important to come back to because you can have people that are maybe one or two jobs out of university suddenly becoming the growth engine. I'm just thinking about a couple of other portfolio companies. And so therefore, it's not about years in the workplace. So it's actually about designing the role and identifying the talent that's actually going to sit in that seat for a period of time.

8:32And so therefore being a lot more specific with what that role design is right from the very get go, not necessarily around having senior or grown up. All of the senior folks that have come into the portfolio in the last 18 months in AI companies have typically been people who are great builders and they're happy to get their hands dirty. So they've actually been hiring probably more senior than they a couple of years ago would have. And the thing which they're testing for is can they come down to where we are today and pull us forward? Very hands-on leaders and often very AI literate. experimenting and learning like everybody else is in that kind of company but in portfolio there are other companies that are doing this transformation and i think that's where it's most interesting equally interesting is seeing people who typically have climbed up the leadership ladder the ones are not hanging in there very long are the ones which are not experimenting with new tooling and unfortunately the sort of middle management layer is where a lot of the hits are being taken right now what does good transformation look like what are the team that are saying oh god our company you know is going to get eaten alive unless we change things up very quickly what are they actually doing how do they get that moving how do they get the teams on board so it seems a bit more straightforward to be able to either deploy the technical founder to work on a labs project that might get embedded into the product that seems to be like a natural route that we've seen in the last 12 months on the company transformation that has been experimented with a whole variety of different approaches whether you have the ownership of that digital transformation who does that sit with does it sit with the ceo office and the chief of staff or is the chief product officer or in some cases it's the CTO that sort of runs one of that we've got COOs that are running all of that so looking back at last year and and with the information that we collect from the portfolio every year we did ask them about how they use the AI and there's a lot of new tooling learning happening but who knows it's gonna I can't think to get anyone who we can actually put up as a poster child and say that's the blueprint that we have to follow but tackling it differently but the common denominator is motivation is definitely there and you mentioned how interesting and it feels very different to start with lovable's you know Anton founder CEO of lovable how he's like everyone he hires he does a lovely linkedin post about them i've never seen founders do that before how does that compare to say a black forest labs that seems a much more sort of secretive sort of heads down me so level is um is for everybody as well as companies you've got this b2c pro c and b2b so um there's there's a strong incentive to build a brand and get your product out there and getting in front of many people as possible.

11:55So Black Forest Labs, the approach is somewhat different. You've got some really top world-renowned scientists in there that are famous within their own circle. And that circle is a global horizontal platform of people that already know that this company exists. They use their product, they lost the product. And it's for them to hire probably some of the hardest you know fought and sought after their um individuals in engineering uh and research sites they have i'm not going to say that they have the pick of the bunch because it is hard and there are people in there that are working really hard to make sure that they do the product brand within that community is so strong it actually makes that side a little bit easier than if you're in pure stealth.

12:47That said, if you're in pure stealth, people will vote in or they'll self-select towards what kind of opportunity they want. And what are the main motivations for people to join? You know, whether it's AI, whether it's defense, whether it's deep tech, some of these companies that are very buzzy right now that investors really want in on, but who really knows what's going to happen to those industries. It's quite, I guess, a clear path. What's their motivation for joining those companies and how hard do the companies have to work, whether that's the salary package, the equity they get, et cetera.

13:28What does that look like to get someone over the line? If you think of it like a talent marketplace, then everyone on one side, every company's got something different that's somehow going to match with someone on the other side. And it might be a controversial mistake to say there's no playbook because there are fundamental things like have we got a salary right? Have we got job titling right? Are we looking in the right places? How are we interviewing? How do we discuss, you know, talk about our values? And if you're brilliant at basics, you've got a really good shot at people thinking that was smooth, let's go.

14:05You're competing with AI labs that are very desperate. but they are huge monolithic organizations and as part of the interview process to really sense that i want to work with these people don't spend my time with these people i would say that candidates vote on so many different things actually gets them to come forward that's there we drill a lot of our founders on have you got this checklist of the basics in place just to make sure that they have but then they've already got quite a decent pitch for candidates and talent because they've just raised funding. So we riff off the back of that and then figure out how do you want to position yourself?

14:47What are some of the basics that founders forget? I think when you're caught up with your own mission and you're obsessed with that on a daily basis, it can be forgotten that the individual that they're talking to, the people that maybe they're getting really excited about, why say no? And they forget to all the way across the line because they think and so that therefore maybe they're not as responsive they don't close them down as quickly as they should they think they should continue to keep looking and and to be fair that's part of the work that we do here at Coriandum in the talent team is help founders get their decision engine sorted before they start meeting people because then they're in pole position to actually close someone and get them across the line what about when it comes to the compensation packages uh are are people getting more equity any of the terms around stock options changing given everything sort of speeding up you know are people vesting for us or anything around that changing to kind of adapt to the new world we live in yeah so we get to see a lot i mean we're a global fund now and i don't know how many countries have got companies in and how many different incentive plans are available but even in europe with all the different jurisdictions you've got different esop esop warrants programs kesso in my here in the uk so how is it changing i think there's an education that we're certainly um helping out on which is on the candidate side as to why you might like to join this company over this company just purely on the line item of share options alone because many people don't understand the differences between the different countries and how the tax treatment varies it's not going to necessarily be able to deal break a bit if all the other components are almost matched that could be so just coaching them through each of those different components and I and I do think that founders when they're just getting going think well this is a program I've got you still have to explain it if it's not motivating if it's not genuinely incentivizing don't do it don't have it it's a lot of expense to set it up you're giving ownership to your team members you don't have to do that many people do because it's become standardized but they don't have to and I think if they can't explain at a very basic level the mechanics of the shareholder plan then they What kind of roles, if any, are more common today than maybe like a year, two years ago?

17:32Oh, we've got a rise of the product engineer. Oh, we've got a rise of the product engineer. Rise of the forward deployed engineer. Everyone wants some of that. And we probably hear these roles in 2023. And forward deployed engineer, I understand, is something that Pantheir sort of started. And another thing that we did wrote a piece on Zifted this week about the kind of influence it feels like Palant is having on company culture. Another one was the kind of no job titles or sort of more outwardly seeming flat hierarchy. What do you make of that? Yeah, all of the labs, all of the AI labs, if you are a VP sales or if you're an SDR, you're probably called go to market on LinkedIn or technical team or technical staff on the tech and product side.

18:29It's beautifully opaque. It makes life hard for headhunters and recruiters to actually identify how things look. I like it. I wish I had had that when I was an operator. It would have been the obsession around titling that happens in an early stage company. If everyone is fat, then that's good. What are some of the biggest stresses on founders' minds at the moment? You're going to have to talk to them. I don't really get the stresses that are on their minds. I get the problems that are like, we need to solve this now. But I don't think we've changed too much over the last couple of years. I think it's all been about, well, for the younger companies, it's certainly about have we genuinely market fit?

19:23Are we ready to scale and paraffin on the fire? Is this the machine? Have we built the machine or have we built parts of the machine? How big is this machine? And I think runway, cash flow, burn rate, all of these things, that they have not changed at all. I do think that they're more concerned about their company being washed out by a five-degree turn by one of the big AI labs. So I think it's the pace at which people are able to innovate and build and then deploy at scale things which you thought were never over, which can potentially wipe out companies. And how are founders thinking about future-proofing their companies or getting themselves in the best position they can for an open AI or anthropic or whoever to just build their thing seemingly overnight?

20:21Right. So we have really some partnerships in place with a lot of the sort of modern tech stack our portfolio companies might use. And often we run webinars and get them close to each other. And I think there is a healthy tension where they are genuinely trying to support these businesses and give them the best deals so that they don't have to maybe pay the same amount as their competitor. and it's marginal all of these wins marginal and yet they're skepticism if we get too close that means that we see everything that we build it's like but I think that has been going on since the beginning of time one thing you mentioned right at the start was about um how yes the hiring playbook has changed loads and part of that is do I hire a human or do I get in some kind of AI tooling how does that how does that look at the moment how do people weigh that up where are they off saying actually no we won't add headcount here well you know so there's two things um at play i think they're working out whether to your point what what are the tasks that you're doing and if it if it's more of a coordination role or any information type role um that stuff can actually be done agentically so if you're hiring a leadership individual whichever that's in finance legal people are sales market doesn't really matter but please ensure they've been experimenting with these tools and the tooling is getting better and better not every year it's like every week it is improving i think in go to mark that's probably the only area that we haven't seeing amazing, organic tooling.

22:09But of course, all the others, I would say the senior leaders that are getting the great jobs of America, the ones which are, yeah, I've been playing with this, I've experimented with that. And they think tooling first as opposed to, or organic first. And they run it alongside a human, they can empower their humans that they have. And I think this is where you're going to see this bifurcation actually happen in society those that use AI and those that don't. One last question before we get on to the findings from the report I know Lovable is planning isn't it to build out its team in America what are the what are the challenges that European startups are facing when they're going out to whether it's New York or San francisco or wherever it is trying to build teams you know how how often do they get sorry who are you you know you're you're a big name in europe but we've never heard of you and how do they how do they get talent in so i think most of them by the time they've actually physically landed they've already got one or two key customers and they've already sussed out that the market is somewhat different for hiring in terms of you need to be ready you need to be ready to make an offer before you're ready to even post your job description.

23:26The minute that goes up, the minute you've got individuals which are coming towards you, if you're not well calibrated to almost make a offer and have onboarded, then you're going to waste time. And it's the mistake that people have done the most is they haven't quite been ready because they've been working at a European hiring pace and all of a sudden it's like, this is it, well, let's go. I think we've prepared well in terms of the differences in compensation. So be prepared of what that's going to look like and also be prepared for how your European team are likely to see these salaries with the pay transparency.

24:05So therefore, how are you going to talk about that internally? So on to the compensation report. Why did you start running it? It's four years now, is that right? this is on Ford here and it started off as a one-off four years ago mainly because it's the most ask that founders come to me with straight after investment is how much should I pay myself and we just didn't have data sets there are amazing platforms out there for every other role and every other employee role but very little on founder compensation with a portfolio 100 companies that gives you a nice start but it's not significant when the companies are dotted all over the world and you have like maybe two or three in Sweden and then you know five in Germany and I don't know six in America it's not statistically significant so we thought we would do it actually started off as a partnership with Slush in the first year which is Europe's largest startup conference and it went so well we thought we'd do it again because people are asking for it I also think the approach that we take is this isn't as a venture firm this isn't important for us this is actually more important you and it's more important to the boards and I think how we engage with the founders on this is your data we're just going to use our analytical horsepower to play it back to you and it might be interesting and it might not but at least then you'll get a sense of whether you are being fair and if you need data to have that initial communication with your first investor over i need to be paid this for whatever reasons you can actually be data informed and it's and it's much more fair would you say founders are getting better at paying themselves i don't know what adjective we use a fair amount i think fairer and i think they're getting they are getting better at having the conversation about their own pay and it's not just basic it's obviously is there a bonus element which we normally see kick in towards series b and the equity side you know the upside that ultimately their big payday is a sampling in the future i think this future though is so uncertain that they're starting to anchor a little bit more around right what do i need to live to not worry about one thing i found surprising in the report is that the salaries for founders in ai are not too far why why is that i feel there's a dot dot dot yet because i feel like it's still too early and um the headlines are you know you see millions being paid you know for certain individuals around the world that's not normal though that's not regular um and i do think that it's probably human nature that founders just see themselves as founders rather they don't see themselves i'm a fintech founder therefore i pay myself more they see themselves as founders and founders first um so but i do think that the um the pace of growth of the ai native companies will meet the next year when we do it these will jump up incrementally and if they don't break away that's what will surprise me but i do feel like they've probably stuck around their other normal founding norms.

27:28What were some of the surprising things from the report? I know you said you find this hard because I guess you're so in this all the time, you know it. But what are some things other people might find surprising in the report? Yeah, good point. So just for context, we run this for four weeks, October to November. And then we close the survey. it goes out to every VC-backed founder. So now I think we've got about 2 ,282 participants. This year, the female participation dropped in percentage. So we're at 13%. I don't know why that still surprises me. It makes me, we made a huge effort, you know, put my hands up, We made a huge effort to engage with the female founder community, just not open.

28:25And if there's anyone listening out there at the moment, it's like, I'm happy to give you my data. This would be so helpful for the rest of the female founder community to get that. Because it seems to me that with the 13 % that did respond, that you're actually at par, which is really great news for the companies that they build. if they are at par with their male counterparts many other roles and non-founders are not at par with their male counterparts so that was the first thing and i think the second thing is that the cro or chief special officer as a second hat founders wear multiple different hats we ask them one question around you know what's your main role what's your secondary role what other hats do you wear but the main role being the commercial or cro that has come out above the ceo um on basic salary so we just talk about basic salary there and how what have been some of the main things that have changed over the time you've been running the report you know i think the um the participate the participants actually i think in the beginning because the that first year when we ran it was primarily Nordic responses that has changed this year when we were adding in the US so both we focused on two cities in New York and in SF and it's been great to get that data actually as a validator for what else we can have access to the stage at which now Now, to compare year-on-year data is never wise because it's never the same respondents.

30:06So when it comes out, everyone needs to recognize that. However, the stage at which we have more Series A and more Series B companies taking the survey today than we did four years ago, and they were primarily pre-seed and seed. so maybe they are moving through those different phases but maybe a new people we don't know if a founder's listening to this and they are either struggling to figure out how much to pay themselves or struggling to go to their board and say i would like to rise what what was your advice how they should prepare for that yeah don't panic this is your business the whole idea is that the board wants you able to perform the tasks that it needs you to do for the business to become successful and if you're able to articulate that and have a discussion around it you'll end up with the right figure for you um but yes so anchor and adjust the context that you're working in but starting your starting point with the data is very useful we know that a lot of chairs other investors and non-execs that are on the retcons of later stage companies do come to this data set which is fantastic because it's actually really useful and do you think boards are more understanding of founders taking um higher salaries or founders doing things like secondaries in order you know to make their personal circumstances easier than they they used to be our boards more understanding of basically giving founders more money i think boards are boards and they're individual organisms that and the composition of those boards is is so different from founder to founder i think having a data set that you can anchor to and starter conversation is useful and we know that those boards also come to the calculator which is available for everyone online and they use that but no I wouldn't necessarily say that they're getting more comfortable I think they're they're up for the discussion enriched with data okay a few quick fire questions what is the most important hire for an early stage company to make What kind of early stage company?

32:34Let's go AI company. AI company. And if you've got technical founders, I would say straight off the bat, you need someone who is empathetic, a human people person, ideally with a bit of talent muscle. And they love building systems. So that could be in the guise of a chief of staff. It could be in the guise of a founder associate. but someone who's got ability to hire and can build systems for your humans what's the best interview question to ask no for sharing that what's the third best interview question to ask it's just gonna sound so glib but i love asking people either so i've got okay i've got two joint threads one uh is uh tell me something that you're passionate about and convince me in 90 seconds and that's really uncomfortable for a lot of people.

33:31But particularly in fast-moving environments, you need people to be crisp and succinct and still get the depth of understanding to make a decision. So I like using that one. If they were not doing this, what would they do? It's quite a human one. And you have to brace yourself for what might come out of that question because it could veer into the personal, but that's fine. What's an underappreciated skill to look for in talent? Being the glue. Actually, and maybe it's personal now, just been thinking much more about human connection. And as, particularly in engineering, who take engineering and product and design, they're all kind of merging a little bit.

34:19And to have a really strong communicator who is empathetic and can engage with customers and with the team members it doesn't matter if you're you know it could be a team of 10 and get to unicorn status so you're going to scale this you know with head cam the ability to connect with humans in a way where we may not need as many what's a great company to steal talent from well it depends on the space you're in we've already talked about Palantir and what makes talent great at Palantir is they're technically awesome and they happen to be awesome communicators so what I've just said or maybe I'll turn this around and say companies to be wary to hire from are those where folks have joined when they're over 100 they've got on a boat that's on a rising tide I would be more wary of hiring because you it's human nature to hire for logos and get attracted by someone's interested in joining our company and they're from x you know and that's like imagine that that'll look great on an investor slide deck or um you know our next board meeting will be plain sailing because we've just hired this person it's like yes in context like does it does it fit with the stage of company that you're at at the moment and are there other individuals that have actually done this journey before repeatedly that might not have the shiny logo that you've considered so yeah I'd probably turn the telescope around and and say companies not to lie from beware of the shiny logos and finally what is the attribute you love to see in a CEO or founder the creandum team has just done investment or said I'm thinking about the investment the person you meet them And you're like, oh, thank God, they've got creativity and curiosity.

36:21I would join first. And that combination is magic. They're humble enough to know that they don't know everything. And something magical happens when people are humble is other people want to help them. And I think that is a skill in terms of this ability to be vulnerable. I've got an idea. Do you think this is right? before you know it. It's like, yeah, you're right, but have you thought about X, Y, and Z? I can help you do that. All of a sudden, they kind of recruited you to do tasks, which is really clever. They've validated their own ideas and they're open to listening. Michelle, we're out of time.

37:02Thank you so much for joining the show. And for the full findings of Creandum's founder compensation report, please check the show notes. We'll also drop a link to the Sifted Daily in the episode description. As always, please rate, review and share the podcast. And this episode was produced by the simply marvellous Maya Durampo Hornby.