> when someone offers you an exploding offer, it's because they really, really want you to take it.
Couldn't it be because they've got a lot on their plate and after a certain period of time they want to free up their brain cycles and stop wondering if you're going to accept that deal?
Couldn't it be that you're barely preferred and making the deadline shows them that you're excited about the offer? Missing the deadline shows that you're not excited and they'll know to go with the second best candidate?
FWIW, I'm relating this to exploding job offers as I have no direct VC experience.
Whenever I've offered an exploding offer in the past, it's because I had several candidates: an extremely strong candidate and several strong but somewhat weaker candidates. In general, all of the candidates have a limited timeframe to make a decision, and there's a risk of losing all candidates if I waited for an indefinite time on the strongest candidate.
In other words, candidates sometimes also need an answer within a certain timeframe (often for very legitimate reasons; a job change can often be a life-changing event) and that means that there are some real time-limits across all of the candidates (in both directions).
>Whenever I've offered an exploding offer in the past, it's because I had several candidates: an extremely strong candidate and several strong but somewhat weaker candidates.
If you had several candidates of equal ability, would you still use an exploding offer? Otherwise, it seems to be less about "giving candidates an answer within a certain timeframe" and more about putting pressure on the candidate you really want.
>there's a risk of losing all candidates if I waited for an indefinite time on the strongest candidate.
Is there nothing in between an exploding short-term offer and an indefinite open-ended offer?
If you had several candidates of equal ability, would you still use an exploding offer?
I would think you would. If you have 10 candidates but only want to hire 1, you can only issue one offer at a time regardless the fact that all 10 are equally qualified. While the first candidate would love to have all the time in the world to contemplate the offer, the employer and the other 9 candidates who are waiting in line don't want that.
>the other 9 candidates who are waiting in line don't want that [to wait for the first candidate to contemplate the offer]
If any of them have other offers, they might appreciate _some_ extra time to decide between them.
EDIT: Nevermind the previous bit--I was still thinking in the context of multiple simultaneous offers, which I guess is not a thing.
And if not, then if the first choice turns it down, you make an exploding offer to the second (to be fair to the next 8), and again to the third (to be fair to the next 7), etc. Is there ever a situation where an exploding offer is not in everyone's best interest?
> And if not, then if the first choice turns it down, you make an exploding offer to the second (to be fair to the next 8), and again to the third (to be fair to the next 7), etc. Is there ever a situation where an exploding offer is not in everyone's best interest?
The ideal scenario would be if it were socially acceptable to rescind offers—thus making the exploding offer unnecessary. An employer could make offers to everyone they're interested in, see who accepts, and then stay with them (essentially, allow parallel analysis on both sides). Instead, candidates can have multiple simultaneous offers while companies can only make offers sequentially. Hence the exploding offers.
Thanks for this. I was looking for someone to come in with basically this point. Sam's point seems to be that if you are trying to hire/fund within a ballpark range of candidates/companies, then exploding offers aren't good practice. If you were trying to hire exactly one candidate, or fund exactly one company this quarter, than exploding offers make more sense. Because companies are often hiring only one person for a role, I don't expect he would extrapolate what he says to hiring.
Depending on the timeframe, this sounds somewhat reasonable.
I'm assuming at the point where you make the offer, you and the candidate have established that you want to work with each other, and already agreed on compensation and terms.
Given that, you're already past the negotiation stage, and there is a time limit on when the deal can close. You need to hire one of your candidates, so it makes some sense to say "you have some-number-of days to accept this offer."
The key here is that you've already negotiated the agreement. In the past, I've had companies make me exploding offers with zero opportunities for negotiation.
Every time I've rejected such an offer, and every time it's been the right decision.
It's imaginable that there's a very short-term deadline affecting a deal. But remember: that puts the side with the deadline at a disadvantage, not an advantage. Consider these examples: really needing to sell something for the money, desperately needing someone to fill a job, needing to use a scarce item in the short term, etc. If one of these is happening for real, then the offer they make will have to be compellingly high and convincing, demonstrating their position of weakness. If someone offered you 5X your normal rate and explained they needed a job done this weekend, that's not a negotiation strategy on their part.
But feigning indifference and giving you a short-term deadline for an offer you're unsure you can beat -- that's just a negotiation move, and personally, I would call them on it. Again, I don't want to be responsible for failed application of this :-)
The key insight is that there's an emotion inside people's heads that's driving their decision-making. You can't see it, and if they're good negotiators they don't want you to see it, but it's there and it'll remain there even if you don't accept the offer.
If they gave you an exploding offer, then that signals that the emotion is "We really, really want you, and we're afraid someone else will snap you up." If it looks like someone else snaps you up and then you suddenly, miraculously become available a month later - what's the emotion? It's usually elation that you happen to still be available.
The one exception is people who are susceptible to sour grapes. "Well, we can't get you, therefore we didn't really want you in the first place." These offers disappear, but you often don't want to work for companies like this anyway, as it shows that management can't get over personal feelings of rejection to do what they'd judged rational a month earlier.
BTW, this is why it's usually not a problem to return to a past job that you've done well at and left on good terms. They liked you then, there's no reason why they wouldn't like you now.
It seems unlikely that someone would instantly flip from wanting to do a deal to refusing to do a deal just because it drags on a little longer than they wanted.
But anything's possible. If you're happy with the offer and don't want to risk losing it, take it!
Couldn't it be because they've got a lot on their plate and after a certain period of time they want to free up their brain cycles and stop wondering if you're going to accept that deal?
Couldn't it be that you're barely preferred and making the deadline shows them that you're excited about the offer? Missing the deadline shows that you're not excited and they'll know to go with the second best candidate?
FWIW, I'm relating this to exploding job offers as I have no direct VC experience.