How VC-backed startups scale hiring without an ATS

For early-stage and high-growth startups, hiring is one of the single biggest roadblocks on the path to profitability. With limited resources, intense competition for talent, and pressure from investors to scale quickly, many VC-backed founders are struggling to hire efficiently and effectively. For venture backed companies hiring delays can mean development stalls, delayed go to market timelines, and some uncomfortable board meetings.

While turning to an applicant tracking system (ATS) may seem like a reasonable solution, the funds, expertise, and workflows required to make an ATS effective only introduce more speed bumps to hiring at the moment when speed is most critical. AI-powered hiring tools like CLARA allow VC-backed startups to evaluate candidates, uncover top talent, and make equitable and informed hiring decisions faster than ever, so that leadership can spend their time building the business instead of scaling up the hiring process.According to a poll from SHRM, 77% of hiring professionals find it difficult to fill full-time positions within their company, meanwhile a survey from Aerotek shows that 70% of job seekers report that finding a job is harder than ever. With an estimated 28% of Americans looking for work it’s hard to imagine how this happened, but there are a few reasons for the disconnect:

The problem of personal networks

Most startups begin their hiring process by tapping into their leadership’s personal networks of friends, family members, and former colleagues. While this is an effective way to find a few qualified people who leadership can work well with, it also limits access to a broader talent pool. This makes it easy to miss out on high-quality candidates simply because they aren’t connected to the right people. Plus, with this methodology it’s difficult to scale up a company’s workforce.This kind of hiring has also been shown to reinforce biases and make it harder to build a diverse team. One groundbreaking report from PayScale found that: “female and minority applicants are much less likely to receive referrals than their white male counterparts.” PayScale reports:[A]ccording to the Bureau of Labor Statistics, white men are only 34 percent of the U.S. labor market. That means that white men are 129 percent more likely to be in your pool of 100 referred employees than what demographics suggests they should be.Research has demonstrated and validated that diverse teams are better at innovative thinking and problem solving, both of which are crucial to any portfolio company leadership under pressure to start delivering results to their investors.

The problem of scale

Of course, taking your recruitment practices beyond your personal network brings a new problem: scale. Today the average job listing attracts 250 applicants, that means with only a few open roles a hiring team must vet hundreds or even thousands of applicants. For any company, let alone a startup that has to move at breakneck speed, manually reviewing this many applications is next to impossible.In theory an ATS, with its keyword filters and organizational tool, seems like the ideal solution to the problem of scale. But in practice, an ATS can often make more work for startups, requiring expensive integrations, dedicated recruiters, and long implementation timelines that slow hiring rather than accelerate it. When an ATS has been implemented, hiring teams will still have to wrestle with rigid, keyword based filtering that most hiring managers believe filter out qualified candidates.

An intelligent way to scale

AI-powered hiring tools like CLARA offer a smarter, more flexible alternative to ATS platforms that helps startups evaluate candidates based on real potential rather than outdated proxies like degrees, job titles, or keyword-matching. CLARA helps hiring teams to match roles with high quality candidates from all backgrounds. Using neuro-symbolic AI, CLARA provides fair, unbiased candidate assessments that score applicants on their experience and the skills that matter most in a startup environment: adaptability, learning agility, and distance traveled. Hiring tools like CLARA also help startups expand their talent pool beyond personal networks and referrals without overwhelming hiring teams. These tools take the guesswork out of applicant screening by surfacing the highest quality applicants. They can also save time by automatically sending follow-up questions. This means interview time can be used to understand a candidate better, not make sense of their resume. CLARA also automatically removes identifying demographic data from applications, helping to reduce implicit bias and ensuring startups build teams that drive long-term success.By removing friction from the hiring process, AI-powered hiring solutions like CLARA allow VC-backed startups to scale with speed and precision while ensuring every hire is equitable, high-impact, and aligned with the company’s long-term vision. Instead of spending valuable time navigating an ATS, founders and leaders can focus on what matters most: building their business, securing funding, and generating profits.