YEOSU, South Jeolla Province -- For a startup to grow further, entrepreneurs should learn how to hire decent team members and fire bad apples, said Han Kim, managing director of Silicon Valley-based venture capital house Altos Ventures on June 21.
“When we make a decision to engage in a follow-up funding round for our portfolio startups, the most critical factor is the entrepreneur’s capability to bring in more talent, along with the courage to remove employees or board members who are unfit to pursue the company goal,” Kim said at the Startup Ecosystem Conference held in Yeosu from June 20-21. The conference was co-hosted by Naver-backed nonprofit organization Startup Alliance.
Altos Ventures Managing Director Han Kim speaks during Startup Ecosystem Conference held in Yeosu, South Jeolla Province on June 21.
Korean startup guru urges healthier VC-backed exit market
‘Why we invested in Big Hit, the agency behind BTS’
The startup investment guru stressed the need for bold decisions in human resource management when a startup loses steam or reaches a crossroads.
“Entrepreneurs in our portfolio startups discuss with us when they get stuck over people,” he said. “I know it is a tough decision, especially when they are giving a pink slip to someone with personal bond.”
That’s why, he added, that Altos doesn’t recommend entrepreneurs share stakes with co-founders.
Another piece of advice he offered was to go the extra mile to help keep turnover down. Kim Bong-jin, head of Seoul-based food delivery unicorn Woowa Brothers, for example, gives handwritten letters and tokens of gratitude to the family members of new employees.
This has contributed to keeping the turnover rate at Woowa lower than the average of other startups, according to the veteran investor.
He also shared other rules, such as how to make bigger bets, stay honest and love the process, as well as not to run out of money.
Kim has a track record of handpicking unicorns from their earliest stages. They include e-commerce platform Coupang, food delivery platform Woowa Brothers and money transfer app operator Viva Republica.
Altos Ventures’ portfolio ranges from Korea to the US, Indonesia and Mexico. Of some 80 portfolio firms, 50 are Korean. Approximately 15 percent of the portfolio firms generate over 100 billion won ($86 million) in annual revenues.
By Son Ji-hyoung (firstname.lastname@example.org)