[This article first appeared in “East Bay fintech company opens S.F. office amid vicious talent war” on San Francisco Business Times and is written by Mark Calvey.]
Payments company YapStone has opened a San Francisco office as it tries to recruit San Francisco candidates who ask whether Walnut Creek is a suburb of Sacramento.
“It was important to be back in the city,” Chairman and CEO Tom Villante told the San Francisco Business Times during an interview last week at YapStone’s Walnut Creek headquarters.
Villante, who normally works out of the company’s Santa Monica office, is quite happy with the company’s Walnut Creek headquarters, saying it’s a “contrarian play” that makes getting to the office convenient for those living in the East Bay. YapStone and Pleasanton-based Blackhawk Network (NASDAQ: HAWK) are among the few fintech companies with headquarters in the East Bay.
Plus, Villante has said he likes that his employees aren’t getting job offers on the elevator ride to the office, as they might be in hotter tech markets like San Francisco.
But the company opened a 6,000-square-foot office in subleased space at 101 Mission St. in San Francisco last week, after narrowly losing out on subleasing 22,000 square feet in the city’s SoMa neighborhood.
“That could have been a blessing. The real estate market is feeling a little ‘toppy,’ ” Villante said.
But he’s seeing no signs of similar relief in the competition for talent.
“It is an absolute war for talent and hasn’t let up,” Villante said, especially for engineering and product positions. “We’ve been on both sides.”
He said YapStone has had signed offers accepted for senior positions, only to hear from candidates that their current employers made counter offers that could not be refused.
Villante cites an example of a YapStone executive who indicated late one week that they were leaving, triggering weekend negotiations to have a retention package in place by Monday morning.
Asked whether there’s still merit in long-time career advice about skipping counter-offers because a current employer will have lingering questions about an employee’s commitment once they give notice, Villante said emphatically, “Zero. I give them a big hug when they stay. I’m just so appreciative that they’re staying.”
No wonder Villante said his top corporate priority is to land on lists featuring the best places to work. The company, with a workforce of 300, hires 100 to 150 people a year.
He needs that talent to keep up with company’s rapid pace of growth, as YapStone handles more than $17 billion in payments for apartment rents, church pledges and marketplace services such as Expedia’s (NASDAQ: EXPE) HomeAway.
Villante plans to raise another $75 million to $100 million in venture capital this year. The company, founded in 1999, raised its first round of venture capital in 2011, pulling in $50 million. Last year, the company raised $60 million in debt.
So why the decision to raise venture money in 2011?
“We had reached a fork in the road. Do we continue to show up for board meetings in our flip flops from the beach, or do we raise institutional money and scale?” Villante said, acknowledging that last summer would have been a better time to raise VC money. But he’s confident YapStone will be successful in raising fresh capital this year.
“There are very few payments companies doing the volume that we do,” Villante said.