Why one startup said no to big VC guns for its Series B
Job recruiting in the rest of the country is a polar opposite problem from recruiting in Silicon Valley. Whereas SV is stumbling through a desert with tiny, infrequent mirages of talent, other locations have a surplus of applicants and not enough positions for them. The problem for recruiters then becomes: not where to find the talent, but how to filter applicants from the masses.
In recent years, big data has arrived in the recruiting industry to try to solve the problem. A few startups have sprung up offering algorithms to comb through applications and find the best people for the job. Identified searches social networking platforms like Facebook to find candidates, TalentBin looks at similar sites but for specifically technical professionals. Jobandtalent alerts applicants to jobs posted across the web that suit their qualifications. The list goes on.
One such startup, Bright, has a slightly different approach. As opposed to crawling the web for talent, the site takes resumes from job seekers -- old school style. The company analyzes candidate profiles and gives them grades. Each score rates how qualified the person is for a particular job.
Today Bright announced a $14 million Series B led by Toba Capital. But it left one detail out: it deliberately picked no-name Toba and less money over more prestigious firms and a bigger round.
"You know in the valley when deals start to get hot?" Bright's founder Steve Goodman says. "That's what happened to us." Goodman wouldn't say which firms were trying to get in on the funding round aside from the fact that there were five of them and 'you'd know their names.' There's no way to fact-check his claims, however given that Bright is ranked fourth in traffic on employment recruiting sites after heavy hitters like Monster and Indeed, it's not a stretch to believe him.
In classic Silicon Valley fashion, the firms that were pushing to lead the round aimed to go big and go home. They wanted Bright to expand way ahead of the disruptive job recruitment trend and own the market by getting there first.
That would be music to most startup founders' ears, but the Bright execs were wary. Instead, they decided they preferred control over the outcome of their product to loads of cash. Goodman believes that slow, steady, and methodical might win the race in this particular field. After all, "We are an incremental innovation to an existing market…That market segment has been around since the beginning of time when it comes to jobs."
Goodman hopes to grow a highly profitable business with the understanding that revenue is not second to growth. There are three possible outcomes for most companies, aside from shutting down: Merger and Acquisition, IPO, or keep going. "What I loved about Toba capital is they didn't care how fast we grew or if we decided to turn it into a purely profitable business today. They put tremendous trust into Eddie and I in building the business," Goodman says. "And that's rare in the valley."
[Image via Taylfin]