Why VCs Don’t Invest in HR Companies

VC HR CompaniesIn the startup ecosystem, HR has often been at the bottom of the pyramid, usually overlooked and majorly outsourced. Although the “recruiting” arm of HR gets its fair share of limelight, the remainder of the HR functions often fall into the pit. However, change is inevitable, and with that the so called “prosthetic” arms of HR [insert your undermined HR functions] are now seeing the light of the day.
PS: If you could just take a look around, you’ll see our very own in-house HR tech startup and it won’t hurt to give it a shot too :-)

Namrata is the marketing and content specialist at sumHR. Currently pursuing her MBA, she has a knack for writing with a tinge of humor. Part of her day is spent thinking what to write, and the rest of it, wondering what on earth has she written! (the end results are quite surprising though).

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  • Gaurav Chandra

    Organisations still think HR as an expense so they don’t want to spend anything on them. That is why I think the HR is still at the bottom. VCs will not invest in something where they cannot see the direct outcome or instant gratification. In my opinion HR playing a supporting role, does not have anything to show directly like addition to profits etc. That is why VCs shy away. This will always be a problem till the HR industry as a whole can find a way to directly correlate the HR functions with profits of the company.

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