Internal Hire vs. External Hire for VP of Sales: Success Rate Data

The 19-Month Revolving Door

You are tired of leading sales. You are ready to hand over the forecast, the hiring, and the pipeline reviews so you can focus on CEO-level strategy. You have two options on your desk: promote your top revenue generator (the internal "Hero") or hire the polished executive from Salesforce who just sent you a resume (the external "Savior").

Statistically, both are likely to fail.

The average tenure of a VP of Sales in the tech sector has plummeted to just 19 months, down from 26 months a decade ago. For a Series B company trying to scale from $10M to $50M, this turnover is lethal. A 19-month tenure means your new VP will ramp for 6 months, operate for 9 months, and spend 4 months looking for their next job while your pipeline stagnates.

The cost of getting this wrong is not just the recruiter fee. It is the "lost year" of growth. When a sales leader fails, they take the momentum with them. You lose the 6-12 months it took to find them and fire them, plus another 6 months to find a replacement. That is an 18-month hole in your revenue chart that no amount of Series C funding can fill.

The Two Archetypes of Failure

We see two specific failure patterns in our portfolio companies:

• The Super-Rep Promotion: You promote your best closer because you are afraid they will leave if you don't. They know the product and the culture, but they have never built a compensation plan, designed a territory model, or hired a team. They continue to act like a rep, hovering over deals and micromanaging peers.
• The Big-Company Mismatch: You hire a VP from a Fortune 500 firm. They look the part and speak the language of scale. But they are used to a $10M marketing budget and a team of Ops analysts. Put them in a Series B environment where they have to build their own decks and scrape their own leads, and they suffocate.

The Data: Internal Stability vs. External Risk

When we analyze the success rates, the data favors the devil you know—but with a massive caveat for scaling companies.

Internal Promotions: Higher Success, Lower Ceiling?

According to research from the Wharton School, external hires are 61% more likely to be fired from their new jobs than internal promotions. Furthermore, external hires typically cost 18-20% more in compensation but receive lower performance ratings during their first two years.

For a Founder transitioning out of sales, the internal promote is the safe bet for continuity. If your process is already documented and working perfectly, an internal operational leader can maintain it. But here is the problem for Scaling Sarah: your process isn't working perfectly. You need someone to build something that doesn't exist yet.

External Hires: The High-Risk Growth Engine

While external hires fail more often, they are often the only path to transformational growth. A study of executive transitions shows that while internal candidates offer stability, external candidates are necessary when the company needs to break into new markets or fundamentally change its go-to-market motion.

The failure rate for external sales leaders in startups hovers around 40-50% within 18 months. This is often due to "stage mismatch." A VP who scaled a company from $50M to $200M is a "Scaler." They will fail at a company needing a "Builder" (scaling from $5M to $20M). They are solving for problems you don't have yet, while ignoring the fires burning right now.

The Cost of the Wrong Choice

The financial impact of a failed external VP Sales hire is approximately 6x to 10x their base salary. If you pay a VP $250k, the bad hire costs you $1.5M to $2.5M in lost revenue, wasted SDR resources, and blown market opportunities. As noted in our VP Sales Recovery Guide, the most expensive part of the failure isn't the severance—it's the phantom pipeline that never closes.

The Verdict: Hire for the Stage, Not the Resume

If you are a Series B Founder ($10M-$50M ARR), you likely do not have an internal candidate ready for the VP role. Your top reps are individual contributors, not builders. You must go external, but you must rig the odds in your favor.

The "Builder" Profile

Stop looking for logos. A resume stamped with Salesforce, Oracle, or Snowflake is a red flag for a Series B company unless that candidate was there early. You need a Stage-Appropriate Builder:

• Experience: They have taken a company from $X to $3X, where X is your current revenue.
• Hands-On: They still sell. In the interview, make them demo your product. If they can't or won't, do not hire them.
• Process-Oriented: They can show you the playbooks they built at their last job. Not the high-level strategy, but the actual onboarding schedules and comp plans.

The 90-Day Audit

Whether you promote internally or hire externally, implement a strict 90-day performance framework. Do not wait 18 months to find out if they can do the job.

• Month 1: Diagnosis. They must deliver a written audit of your current team, pipeline, and process.
• Month 2: Quick Wins. They should close a deal themselves or unblock a stalled enterprise opportunity.
• Month 3: The Build. They must launch one major structural improvement (e.g., a new outbound cadence or a revised commission structure).

The success rate of your VP Sales hire is not a lottery; it is an engineering problem. Define the specific structural challenges you face (e.g., "moving from founder-led to rep-led") and hire the person who has solved that specific equation before. If you rely on gut feel or shiny logos, you will be back in the hiring market in 19 months, with $2M less in the bank.