When to Hire a VP Sales vs a Founding Account Executive: A Guide for Startup Founders

Navigating the intricacies of building a robust sales team is a pivotal challenge for startup founders, particularly when deciding between hiring a VP Sales and an Account Executive. This decision is crucial to ensure that a startup’s sales force aligns with its growth stage, product-market fit, and overall business strategy. In this guide, we will delve into the key differences between these roles, offering a sales hiring guide that empowers startup founders with the knowledge to connect with transformative leaders and make informed hiring decisions.

Understanding the Roles

Differentiating VP Sales and a Founding Account Executive

Understanding the distinction between a VP Sales and a founding Account Executive is crucial for startup founders. A VP Sales is a strategic leader, responsible for setting the sales vision, developing strategies, and leading the sales team to achieve long-term goals. They focus on high-level planning, team management, and aligning sales efforts with the company’s overall objectives.

Conversely, a founding Account Executive operates on the front lines, directly engaging with clients to drive sales. They manage the sales pipeline, handle client relationships, and work towards immediate revenue targets. While the VP Sales works on building a scalable sales infrastructure, Account Executives execute the day-to-day sales activities. This founding AE can also help with strategy, but is a critical role to move away from founder led sales and prove there is a sustainable business model.

By comprehending these roles, founders can decide when to hire a VP Sales to strategize and lead, and when to bring on Account Executives to generate revenue and manage client interactions.

Key Responsibilities of a VP Sales

A VP Sales plays a strategic role within a startup, with responsibilities extending beyond daily sales operations. They are tasked with crafting and executing the overall sales strategy, aligning it with the company’s vision and growth objectives. This involves setting sales targets, developing plans to achieve them, and ensuring the sales team is equipped to meet these goals.

Additionally, a VP Sales focuses on team leadership. They recruit, train, and mentor the sales team, fostering a culture of high performance and accountability. They also collaborate with other departments, such as marketing and product, to ensure alignment and optimize the customer journey.

Another key responsibility is analyzing market trends and customer data to identify opportunities and threats. This insight enables the VP Sales to adapt strategies in real-time, maintaining competitive advantage. By fulfilling these responsibilities, a VP Sales not only drives revenue but also positions the company for sustainable growth.

In over a decade of placing VP of sales leaders and founding AE’s we have seen the most success come from hiring a VP of sales after there are multiple AE’s and after the platform sale is repeatable. Generally, the company has a decent understanding of CAC and LTV allowing for the VP of sales to plan accordingly. 

Core Duties of an Account Executive

A founding Account Executive is integral to the sales team's success, focusing primarily on customer engagement and revenue generation. Their core duties involve managing the sales pipeline, which includes identifying potential clients, conducting outreach, and nurturing leads through the sales funnel to close deals. Generally we see this position come first (when you are a technical founder) and come after a Customer Success and account manager if the founder is leading sales off the bat.

Account Executives are also responsible for maintaining strong client relationships. They ensure customer satisfaction by understanding clients' needs and offering tailored solutions, which lead to upselling opportunities and long-term partnerships.

When to Hire Each Role

Identifying the Right Time for a VP Sales

Determining the right time to hire a VP Sales is critical for a startup's growth. Typically, this hire should be considered when the company has established a product-market fit and needs to scale its sales operations to achieve substantial revenue goals. This often correlates with reaching milestones, such as approaching $1-2 million ARR, where the sales process is somewhat repeatable and the focus shifts to scaling.

At this stage, the founder's involvement in day-to-day sales activities becomes less practical, and the need for strategic oversight increases. A VP Sales can implement structured sales processes, recruit and manage a growing sales team, and drive the company towards more aggressive targets. Additionally, if the sales process is somewhat repeatable but lacks scalability, a VP Sales can implement the required frameworks and systems.

This is a tough one to get right. Hiring too early might lead to underutilization of the VP’s strategic capabilities, while hiring too late can cause missed revenue opportunities and founder burn out.

Optimal Timing for Hiring a founding Account Executive

Hiring a founding Account Executive should align with a startup’s growth phase where there is sufficient lead flow and a need for dedicated sales professionals to manage client interactions. This usually occurs post product-market fit (or at early signs of a repeatable process), when the company is ready to transition from founder-led sales to a more structured sales approach.

Typically, startups should consider bringing on an Account Executive around the time they are nearing $1 million in annual recurring revenue (ARR). At this point, the sales process should be somewhat defined, allowing Account Executives to focus on executing and refining it. The founding AE should also be relatively independent and have startup experience. A founding AE generally does not perform well if their prior experience is at a mid-late stage company where the process is already defined. The best success in this role comes when a founding AE is willing to try different selling tactics, is willing to help define the ICP and is willing to explore new tooling, integrations, and automation technologies. 

Account Executives are essential for handling increased sales volume, managing customer relationships, and driving consistent revenue. They allow founders to step back from daily sales tasks and focus on strategic growth initiatives. Delaying this hire can lead to missed opportunities and overburdened founders, while hiring too early can result in inefficiencies.

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