Great ideas don’t scale themselves. People do.
That simple truth sits at the heart of one of the biggest blind spots in venture capital. While capital, market timing, and product fit often dominate investment decisions, it’s the people behind the business who ultimately determine success – or failure. For VC-backed companies under pressure to grow fast, the people equation can become both a catalyst and a constraint.
In this post, we explore the most common people-related challenges VC firms face across the investment lifecycle – and how a more strategic approach to leadership, culture, and talent can de-risk growth and accelerate returns.
1. Founders: Brilliant, but Not Always Built for Scale
Founders often bring exceptional vision and product instinct – but they’re not always equipped to build or lead at scale. As companies grow, the skills that got them from zero to one may not get them from one to 100.
Common challenges include:
- Lack of experience building and managing teams
- Resistance to delegation or leadership coaching
- Difficulty adapting to new leadership structures
VC firms must balance supporting founders with planning for leadership evolution – whether that means coaching, restructuring, or succession planning.
2. Hiring Fast – But Not Always Smart
VC-backed companies are often in a rush to hire. But speed can come at the expense of structure, alignment, and long-term fit. Without clear role definitions, cultural clarity, and scalable hiring processes, teams can become bloated, misaligned, or dysfunctional.
Watch for signs of people risk:
- Unclear accountability across functions
- High voluntary attrition or employee burnout
- Talent mismatches in key growth roles
Having the right people infrastructure early – role clarity, cultural guardrails, onboarding playbooks – can significantly reduce chaos as the company scales.
3. Culture Isn’t Just for Corporates
Culture may sound like a luxury in the early stages, but it’s actually one of the most powerful assets (or liabilities) in a high-growth environment. Misaligned or toxic cultures can lead to poor execution, internal conflict, and reputational damage.
Questions VC firms should ask:
- What culture is this founder team creating – intentionally or by default?
- Will it scale with the business?
- Does it support performance, inclusion, and innovation?
Codifying a company’s core behaviours and values early can help shape hiring, leadership development, and how teams operate under pressure.
4. Leadership Transitions and the Risk of Disruption
Whether it’s replacing a founder CEO or bringing in a commercial leader to drive scale, leadership transitions in VC-backed firms are notoriously high risk. Handovers often happen under time pressure, with limited onboarding or stakeholder alignment.
To reduce disruption, firms should:
- Start succession planning before it’s urgent
- Align investors and founders on leadership needs and timing
- Support transitions with external coaching or advisory
Smooth transitions don’t just preserve momentum – they protect valuation.
5. Exit Readiness: The People Side of the Story
As VCs prepare for exit – whether through acquisition or IPO – the people dimension becomes increasingly important. Potential buyers or public investors will assess not just the numbers, but the quality of the leadership team, the scalability of the organisation, and the sustainability of the culture.
Questions to answer before exit:
- Is the leadership team credible, cohesive, and scalable?
- Are key roles filled with successors in place?
- Is the organisation structured to scale beyond the exit?
Getting the people side right doesn’t just support the exit – it boosts the valuation.
In Summary: People Are the Real Growth Engine
In the race for returns, it’s easy for venture firms to overlook people issues until they become problems. But the most successful VC firms build people diligence, founder development, cultural clarity, and leadership succession into their playbooks from the start.