The recent resignation of Peapod.com’s newly appointed chief executive underscores the stomach-churning, day-to-day vacillations at an Internet startup. After just six months on the job, the online grocer’s leader left the company because of “physical and mental exhaustion” amid the cancellation of a $120 million investment.

Certainly, these high-flying positions are not for everyone.

“You need to have a capacity for a strong amount of work, to be flexible to react to constant changes to the business model, and have a high tolerance for risk,” said Dan Guerrero, president of Tarzana-based eCruiting Inc., which specializes in placing Internet executives.

As Internet companies multiply like rabbits, headhunters say the litany of requirements for top-brass openings has led to a frenzied search for qualified employees.

“The war for talent is unbelievably competitive. Everyone wants the best five people in the country for that function,” said Mary Saxon, principal at Korn/Ferry International, who counts among her Internet clients Mattel.com, Webvan, Eve.com and BabyCenter.com. “They don’t want to invest in people that might win, they need someone who’s a winner already.”

The good news, she points out, is that executives have warmed up considerably to the prospect of working for an Internet startup.

“Eighteen months ago, if you called people about dot-coms, their attitude was, ‘Prove it to me,'” Saxon said. “Now it’s swung in the other direction and people are dying to get involved in the next eToys.”

Acid test

To qualify, applicants for high-level Internet openings are put through a brief acid test, so recruiters can determine if they have basic senior-level management skills. They must have strong strategic-thinking skills, the ability to oversee a management team and a flair for structuring deals. And a candidate’s background can make a huge difference in the hiring process.

So where are recruiters looking for talent to poach?

“We’re looking at companies that have a strong track record of success, that are known as great campuses of talent, who attract talent and have great training programs,” recruiter Saxon said. “They can give our (Internet start-up) companies a sense of cachet, especially if (the recruit was) a heavy-hitter or a significant player at a major organization.”

Recruiters fan a variety of industries to hunt down talent. Key sectors have included retail, manufacturing and especially entertainment.

Poaching from other Internet companies is also common, but often more difficult, because many Web executives are still locked into stock-option agreements.

“Let’s face it, if you find somebody with two to four years experience, you’ve found a veteran in e-commerce and that will only make running your company easier, especially if they’ve been through a pre-IPO phase,” said Bruce Babashan, managing director at DHR International, a retained executive search firm.

But being a Web “veteran” is not the final barometer in determining whether or not a candidate is the right one, say experts.

“If they’re in a traditional industry, we look to see if they’ve built a division in a large organization, such as an e-commerce practice, with limited money and fought the status quo to get things done,” said Jennifer Happillon, director and head of the e-commerce practice at cFour Partners/ITP Worldwide in Santa Monica. “It shows us that they have small, entrepreneurial experience in a bureaucratic environment.”

One tricky aspect of recruiting involves gauging the needs of Internet companies at their various stages of development.

A chief executive at a start-up company tends to be younger and more hands-on than his or her corporate counterparts, juggling different tasks and persuading others to invest in the venture. But that kind of entrepreneurial CEO may not be the strongest candidate once the company has a staff of 150.

“A younger CEO may not have the breadth of experience to take the firm from a $10 million venture to a $50 million enterprise,” said Brad Jones, managing partner of Redpoint Ventures and Brentwood Venture Capital.

Likewise, a chief technology officer at a company working through its first, or “A,” round of financing may only need to manage five to 10 people, enabling him to focus primarily on writing code, but that scenario can change as the company grows.

“At a ‘C’ round, a CTO may have 50 to 60 people on his staff and that becomes a management job, a software development management job, and it’s a much different role,” said Ron Hendrixon, consultant at retained executive search firm Heidrick & Struggles.

Getting funded

Having the appropriate kind of executives at each stage of company growth is essential, not just from an operational standpoint, but also for capital-raising purposes.

“VCs don’t fund ideas, they fund management teams with good ideas,” Babashan said.

So, does college pedigree count? Experts’ answers vary wildly.

“Oh god no,” Hendrixon said. “I’d much rather see someone who went to Long Beach State and got a Harvard MBA because they proved themselves, vs. someone with a Harvard undergrad and a Yale master’s degree. They’ve been so advantaged. How do you know they’re any good?”

But Babashan said a blue-chip education can provide the intellectual credentials for a leg up in a company.

“Today, a resume came across my desk and she was from Harvard. Clearly, she will get our attention,” Babashan said.

But sometimes even the most competent executives don’t last long in the topsy-turvy Internet world.

“We placed a CTO at a company and they didn’t have the CEO yet. Then when the CEO arrived, the two didn’t work out,” Happillon said. “Most Internet companies are at-will employers. People can leave and they can ask you to leave.”