We’re excited to feature this guest post from Mark Nechita, a seasoned transformation leader and former CHRO for Public & Private large middle market firms with deep expertise in talent strategy, M&A integration and organizational design. As the Founder of Parayno Advisors, Mark partners with organizations to accelerate growth and scale to unlock enterprise value through people, process, and performance. In this article, he shares an HR Executive’s perspective on how Startups, and NewCos born from transactions, can de-risk and accelerate growth through intentional talent and operational strategies.
An HR Executives Perspective
Start-ups represent innovation, disruption, and the pursuit of opportunity. But with failure rates reaching 20% in the first year, 50% by year five, and nearly 65% within a decade, entrepreneurs, executives and investors must confront a harsh truth: great ideas alone don’t ensure success!
A growing body of evidence and leadership experience suggests that start-up success depends heavily on one critical factor: people. Talent strategy, leadership alignment, and scalable people processes are not just operational niceties, they are essential value drivers.
Not All Start-Ups Are Created Equal
There are two distinct start-up models to understand:
- Traditional Start-Ups: Ground-up ventures launched by Founders progressing from Families & Friends to Seed to Series B, C and beyond.
- NewCos Created by a Transaction: Start-ups formed through carve-outs, mergers or private equity deals.
NewCos often inherit complex legacies, conflicting cultures, and operational blind spots. They must integrate, align, and operationalize rapidly under intense investor pressure. The stakes are high, and so are the risks.
Why Start-Ups Fail: Three Failure Modes
Start-up failure commonly falls into three categories:
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Traditional Pitfalls
- Lack of market demand
- Competitive pressure
- Capital shortfalls
- Operating Model
- Inability to operationalize technology
- Weak team
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NewCo-Specific Challenges
- Don’t focus on getting Integration ‘right’
- Cultural Incompatibility
- Insufficient Capital
- Investor Misalignment
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People-Related Failures
- Inadequate leadership
- Lack of relevant skills & organizational capability
- Team conflict
- Founder’s impact
The unifying thread: talent and culture matter deeply. These elements are either the launchpad for sustainable growth or the drag anchors that prevent it.
The Playbook for Accelerating Valuation & Operational Success
Start-up success is engineered, not accidental. Here is a 3-part roadmap to help Founders, CEOs, Executive Teams and HR alike improve outcomes, reduce risk, and unlock long-term value.
Part I: Refreshing the Structure & Tools — To Sustain
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Restructure With Strategic Intent
Your org chart isn’t sacred. Redesign the structure to match the company’s evolution, not the founder’s preference. Build for the next phase, not the last. Define critical skills needed to achieve strategic objectives. Id skills gaps; develop a plan to upskill and reskill your workforce. Instill a mindset of “change as a constant”.
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Reengineer Processes, Policies, Practices and Systems
Early-stage decisions break at scale. Revisit operating rhythms, workflows and prior decisions. Ensure alignment of compensation,incentives and equity with performance management frameworks to drive strategy & OKR achievement and to reflect business maturity.
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Getting the Right HR Capability is Crucial
A dynamic that frequently gets insufficient attention and is undervalued … the type & quality of HR talent hired and HR Vendors engaged to support scaling the Venture. Often magnified by the Founder’s and/or CEO’s lack of understanding of “good”, strategic HR. They default and take their own guidance or seek counsel elsewhere (friends/networks/BOD members) vs. potentially engaging strategic Fractional HR resources as needed, RPO vendors who know how to attract “A” Player talent and know best practice New Hire & Onboarding workflows, and other consultants who bring valued HR functional expertise to accelerate growth.
The same dynamic holds true for other functions, especially Finance & Accounting and Marketing. Too often, Founders and CEOs in traditional start-ups fill these roles with transactional-level talent given inflated titles but lacking the strategic capabilities and breadth of expertise required of their role. As a result, the CEO ends up assuming their higher-level responsibilities, diverting focus from leading and growing the business.
For traditional start-ups, a “high-low” model may deliver the best results until scale is achieved. By combining strategic consulting expertise on an as-needed basis with transactional resources for day-to-day execution, companies can flex labor costs while still accessing the full range of functional capabilities required to grow and scale.
Part II: Aligning Talent — To Accelerate
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Craft and Champion Mission, Vision & Values
Your values must be real, relevant, and actionable. Embed in people processes & practices to create authentic cultural alignment.
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Build an Aligned Leadership Team
Promote & hire intentionally. Prune misaligned leaders early. Get & keep the right people “on & off the bus” up and down the organization. Focus on Talent to Value planning at all levels.
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Navigate Founder & Leadership Team Dynamics
Founders can be a start-up’s greatest catalyst—or its biggest constraint. Guiding them from hands-on technical domain and/or product expert to growth-oriented leader, while empowering professional management to bring know-how and drive strategic direction, is critical. Failing to properly address this transition can breed dysfunction, burn capital, hamper operating performance, impair the ability to rapidly scale and sink the venture.
Part III: Focusing on the Prize — To Win
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Manage for Performance — Every Headcount Matters
Make accountability your superpower. Know your high performers, critical roles, and retention risks. Create routines for tracking results vs OKRs & strategic goals, and to allow for real-time correction.
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Finish Strong
Mediocre execution kills more good ideas than bad markets. Be relentless in aligning people, process, and purpose!
Final Thoughts
The margin for error is thin in today’s economic climate. That’s why intentionality around people, structure, and strategy is more critical than ever.
Scaling a business is won or lost through the people you attract, the culture you build, and the routines and processes you implement to achieve long term, enduring success!
When you optimize for talent and organizational alignment, you’re not just building a company. You’re engineering a sustainable competitive advantage.