There’s a lot to consider when it comes to investing in a new business.
First, you need to thoroughly evaluate the start-up you’re thinking of supporting to ensure you’re hedging your bets on an organisation that’s going to deliver a worthwhile return. You also need to consider how you’re going to support and advise this business as they rapidly grow and commercialise their product or service, which can include managing and assisting with recruitment as a new team expands.
Electronics and embedded systems are a part of the engineering industry which is seeing plenty of innovation at the moment, and as recruitment experts in this area, we’ve noticed more and more venture capitalists starting to invest in organisations establishing themselves in this sector. So we’ve put together this article offering advice for VCs investing in technology businesses producing hardware, electronics or embedded software devices, sharing insight into the state of the industry and advice on recruitment in particular.
What’s the State of the Industry?
The electronics and embedded systems sector is incredibly busy at the moment, as IoT technology advances in its applications, wearable devices using embedded systems become more commonplace, and the potential for robotic or AI-assisted healthcare is explored.
Plenty of businesses are developing innovative and exciting products that are going to have a positive impact on both an individual and worldwide level, responding to consumer and business needs in energy, security, medicine and transport. Some examples of these organisations that KO2 have worked with are:
- Companies developing green technology and energy alternatives using electronics engineering, producing products that will have a positive impact on the environment.
- Companies working on solutions to improve health and wellbeing, such as creating devices that can assist with operations in healthcare facilities.
- Companies focusing on neurology and how technology might interact with or be controlled by the brain, developing brand new products and processes with applications in a wide range of areas.
Our work in recruitment with embedded systems and electronics companies has shown increasing interest from venture capitalists in certain sectors, suggesting that these are the areas where the most profitable innovation is predicted to come from. Many of our clients designing and producing the products and solutions below are or were initially backed by venture capitalists:
- Medical devices
- Wearable devices
- EV charging
- Sports technology
- Renewable energy
- Smart energy products
- AI-related products
For engineers and entrepreneurs in the embedded systems and electronics industry, this means that there’s the potential for a lot of career opportunities and new business as start-ups are backed by investors and given the chance to get off the ground. For venture capitalists looking to invest in new areas or continue their success in supporting these kinds of businesses, there’s the potential for a lot more innovation and profit to be made.
Why Should You Invest in the Electronics and Embedded Systems Sector?
As we’ve explained above, you should invest in the electronics and embedded systems sector because it’s an area that’s already showing a lot of growth and innovation. The interest and investment from many venture capitalists already suggest that now is definitely the time to research new business opportunities in this area and consider backing a start-up.
In fact, there are currently record numbers of start-up companies developing new electronic or embedded systems products as the technology emerging from this area becomes more commonplace in all kinds of products and equipment.
The UK is recognised as having many of the best engineering candidates in the world, so investing in this industry sector in this country means you’ll be supporting businesses owned and powered by these talented individuals. UK engineers are trusted as being pioneering and high-calibre, consistently bringing new ideas to life and acting as a leading example for others in the industry across the world.
A particular trend that we’ve seen is Cambridge and Oxford engineering graduates setting up their own businesses straight after they finish their studies, based on ideas they explored and developed during their degree.
The applications of many embedded systems devices specifically make this a key sector that venture capitalists should be considering investments in. The technology involved with the Internet of Things in particular has shown massive growth in its uses recently, with much more innovation predicted to come.
Recruitment Advice for Start-Ups and Venture Capitalists
Venture capitalists investing in start-up embedded systems and electronics companies tend to need these businesses to scale up quickly once they’ve been backed. This always means hiring new staff, which can be a daunting prospect if a company is in its early stages and lacks an established recruitment protocol.
Venture capitalists are mainly brought in to provide financial business support, but may also act as general business advisors in the growth stage of a new business. Here are some of our most valuable pieces of advice for recruitment during rapid team growth.
Start with Employer Branding
Employer branding is a successful element of any recruitment strategy. It’s also very important to establish when developing a business identity, so we recommend that you start by determining this.
A company’s employer brand is how it markets itself to potential employees as an employer. It’s not just the brand image and how it’s viewed by competitors and customers, but the perception of what a company is like as a place of work and what employees get from working there.
Employer branding is the way that an organisation markets itself in order to attract candidates for job opportunities. This involves company culture, how the business is structured, employee benefits and the opportunities employees have for growth and flexibility within their role.
When hiring for a start-up, having a strong employer brand is key, as there won’t be many current employees to provide evidence of what this looks like day-to-day. Ensure that job adverts encapsulate the experience of working for the company, its values and the benefits the position offers, as well as essential things like responsibilities and expectations.
Employer branding can also be promoted on a company’s Linkedin or social media profiles, along with more general marketing material advertising the business.
Make Job Adverts Clear
Leading on from that last point, another essential piece of recruitment advice for VC-backed start-ups is to ensure that job adverts are clear. In the early stages of growth, hiring the wrong person can have a hugely detrimental impact on a business, so the specifications for what you’re looking for need to be as clear as possible.
Ensure that all of the responsibilities that a role will require are outlined, along with the necessary experience required to complete these. Try to be as precise as possible – now isn’t the time for using vague euphemisms or stock phrases to try and make an advert seem more professional.
If culture fit is also an important part of initial hiring goals, focus on how the right kind of candidates are going to know that a role is for them. Instead of phrasing a section as ‘We’re looking for someone who…’, consider asking questions like ‘Are you looking for a career opportunity in a team filled with other passionate and hardworking engineers?’ to make the adverts more engaging and precisely pinpoint the kind of personality you have in mind.
Focus on Skills Over Roles
When a business is growing, there’s no space for employees that need a large amount of training or are only ‘good enough’ in their roles. We recommend that you focus on finding employees that have the exact skills a business needs to take off, instead of listing job roles and then sourcing candidates to fill these.
Consider initial goals, projects and predicted workloads and identify exactly what kinds of skills and experience will be needed to achieve these. If all of these fit under classic job titles then that’s great, but focus on ensuring that you have the necessary talent covered across initial hires instead of choosing less proficient candidates that have experience in a certain kind of role.
If there isn’t the budget for a full team of new hires in the early stages of a new business, hiring contract workers is a fantastic solution. In fact, it’s often a better way of ensuring you have the necessary skills and insight required to get a project or product off the ground.
Contractors in the engineering industry have often specialised in a particular area and are experienced in coming into different companies and offering their services for a fixed period of time. This allows start-ups to fill skills gaps and save time having to train full-time employees with less experience, as well as saving money in the long run by avoiding having to budget for a full-time salary.
Partner with a Recruitment Agency
Our final piece of recruitment advice is to consider partnering with a recruiter or recruitment agency to help source outstanding candidates and save a lot of time by outsourcing your recruitment efforts. It’s a great idea for venture capitalists to partner with a recruitment firm and bring them in to assist with hiring for each new company they invest in, providing a simple and trusted recruitment solution and minimising any setbacks created by delays in the hiring process.
KO2 has recently partnered with numerous venture capitalists that invest in electronic and embedded software businesses and is a trusted recruitment agency that is an ideal partner for companies in this industry sector.
Not only do we have a unique understanding of the kinds of engineers that excel in this industry and the skills or experience they require, but we have a proven track record of successful hires and experience in supporting start-ups backed by venture capitalists. We can help our VCs’ companies scale up quickly, offering reliable support and ensuring that goals are met and investments are kept safe.
You can read more about working with us on our client information page.
Our work with venture capitalists in the embedded systems and electronics sector demonstrates that this area of the industry is one with plenty of innovation still to come. Getting a foot in the door by investing in start-ups and projects in this sector is a fantastic approach for VCs that want to support impactful and life-changing developments, and working alongside a recruitment agency will ensure that there are no teething problems when it comes to the initial growth of a team.
If you’re a venture capitalist looking to invest in companies in the electronics and embedded systems sector and would like the support of a specialist recruiter in this area, KO2 is the ideal choice. Get in touch to speak to our team and find out more about our experience in this area.