Founders need to handle many tasks in the early days of a startup, from registering the business to creating a roadmap for launching their products and services. But few decisions matter as much as who you bring on first. A startup's earliest employees shape its culture, influence its product direction, and often become its operational backbone for years to come—which means hiring the first employees can feel daunting and time-consuming, even when those employees are desperately needed.

Hiring well at this stage means slowing down and thinking it through: identifying which gaps in your team pose the biggest risk to your business, budgeting realistically for salary, equity, and other costs, and planning not just for your needs today but for where the company is headed over the next six months to a year. A study of 973 UK startups found that, on average, startups didn’t hire for an HR role until they had 40–50 employees. This highlights how much of the hiring responsibility is often placed on founders and early team members.

Since founders of early-stage startups often have very little time or mental bandwidth, it can be easy to rush hiring decisions and hire whoever is available. But this approach can backfire, since a startup’s first employees can significantly influence its trajectory. With a little planning, you can hire the first employees for your startup in a thoughtful way. Here’s how to do it.

Key Takeaways

• A startup's first employees shape everything from company culture and operational norms to how investors perceive the business, making early hiring decisions far more consequential than later ones.

• Deciding who to hire first means weighing immediate business needs against future growth, prioritizing roles that reduce risk, and looking for people who can scale with the company.

• Beyond writing the job description and running interviews, successfully bringing on early talent requires thoughtful onboarding and a genuine focus on retention.

Why your first hires matter more than later ones

The first hires can significantly impact the success of an early-stage startup. Here’s why:

• Foundation of company culture
  The initial employees fundamentally shape the company culture. Their behavior, work ethics, and interactions establish the norms and values that will define the organization’s character. This cultural foundation influences everything from employee satisfaction to brand perception.

• Role in innovation and creativity
  Early hires often drive the creative and innovative processes within a startup. They are typically involved in the initial brainstorming and development phases, shaping the startup’s products or services. Their ideas can set the startup apart in a crowded market.

• Early hires shape your growth and long-term viability
  Early hires contribute to key decisions that can either accelerate or hinder a startup's growth trajectory, and the processes and systems they build often determine how well the business can scale to support more customers, employees, and volume down the line. Their ability to navigate early challenges and adapt to market changes also shapes whether the startup can sustain itself for the long haul.

• Setting operational precedents
  Early employees often establish the operational precedents in a startup. Their strategy for solving problems, managing projects, and executing tasks can become the standard for future hires. This can have a long-lasting effect on the effectiveness of the startup’s operations.

• Brand building and representation
  The first few hires often act as the face of the startup, especially in its early stages. Their interaction with customers, investors, and other stakeholders builds the startup’s reputation and brand identity.

• Influence on investor perception
  Investors often look at the quality and performance of early hires to gauge a startup’s potential. A strong early team can inspire confidence in investors, leading to better funding opportunities and more favorable terms.

• Early hires build your learning culture and later become your mentors
  Early hires often establish the learning environment within a startup. Their attitude toward continuous learning, experimentation, and feedback lays the groundwork for an organization that evolves and improves over time. As the company grows, these same early hires often become mentors and leaders for new team members, transferring the knowledge and skills needed to maintain quality as the startup scales.

How to decide who to hire first

Before you can hire, you’ll need to define which roles you need to fill and the order in which you need to fill them. Here’s how to determine who exactly you need to hire:

• Assess your team’s current capabilities
  Begin by evaluating the skills and expertise you and your cofounders (if applicable) offer. Identify any gaps in knowledge or capability that are key to your startup’s success. This assessment will help you prioritize the roles that need to be filled first to complement the existing team’s strengths.

• Define your core business needs
  Know the core functions of your business. This might include product development if you’re launching a tech company, or client acquisition and service delivery if you have a service-oriented startup. The roles you need to fill first should directly support these core functions.

• Prioritize the highest-impact roles
  Consider which roles will have the most immediate and substantial impact on your startup’s growth. For instance, if developing a minimum viable product (MVP) is your immediate goal, a skilled developer or product manager might be your first hire. If market penetration is the priority, a sales or marketing expert could be more important.

• Forecast future needs
  While focusing on immediate needs, also think about the roles you will need in the next six months to a year. This foresight allows you to address current challenges while also preparing for future growth.

• Identify multiplier roles
  Some roles have a multiplier effect, meaning they help other team members become more productive or effective. This could be a project manager who makes sure that everyone is working cohesively or a marketing professional who amplifies the reach of your product.

• Consider budget constraints
  Assess your financial resources. Some positions might be valuable, but expensive to fill. Consider whether part-time hires, freelancers, or contractors could serve as a temporary solution until the startup is financially healthy enough to afford full-time specialists. Contractors might be a good fit for short-term or specialist work, while full-time employees are better for core, ongoing roles where long-term commitment and institutional knowledge matter most.

• Hire for scalability
  The positions you fill first should not only address immediate needs but also have the capacity to evolve as the startup grows. For example, a first hire in a technical role should be someone who can tackle hands-on development initially but also has the potential to lead a team as the company scales.

• Prioritize roles that reduce risk
  Prioritize roles that mitigate substantial risks to your startup. If compliance and legal issues are a potential risk, for instance, hiring someone with expertise in legal affairs or regulatory compliance may be a priority.

• Balance operational and strategic roles
  While it’s important to have people who can perform day-to-day operations, it’s also important to have positions that focus on strategy and long-term planning. This balance helps a startup maintain its current trajectory and plan for future success.

• Build a diverse team from the start
  Consider how the jobs you’re filling can contribute to a diverse and inclusive team. A varied team brings different perspectives and ideas, which is especially valuable in a startup environment where innovation and adaptability are key.

How to hire the first employees for a startup

Hiring your early employees is typically a slow process. Using the right hiring strategy can make the process go faster and result in a positive outcome. Here’s how to hire the first employees for a startup:

1. Prepare before you post the role

Create a comprehensive plan that considers the role’s impact on your startup while also aligning with your business objectives and fitting within the constraints of your financial capabilities. This preparation ensures that you will attract the right talent and support them effectively once they join your team, setting up a strong foundation for the growth of your business.

You’ll need a company and employee ID number before you begin hiring. Stripe Atlas can help you get these, and offers discounts on hiring and payroll software.

Write a clear job description

• Identify key responsibilities and qualifications
  Outline the specific responsibilities and duties of the job. List the qualifications needed, including education, experience, skills, and any other important attributes. Be as detailed as possible to maintain clarity and attract strong candidates who know the expectations of the role.

• Match job roles with business objectives
  Each role should directly contribute to your startup’s goals and objectives. Show how the job responsibilities impact the company’s mission and vision. This will help you find candidates who are a good fit with your business objectives and influence their motivation and job satisfaction.

Budget for new hires

• Calculate compensation and equity packages
  Decide on an appealing compensation package for the role. In startups, this often includes a mix of salary and equity. Equity gives employees a stake in the future success of the company, and can be very attractive to candidates. But be strategic about how much equity you’re willing to give up as you set up your company’s cap table, balancing the need to attract top talent with the long-term ownership structure of your startup.

• Plan for employee benefits and other costs
  Beyond salary and equity, consider other costs associated with hiring. These may include employee benefits (health insurance, retirement plans, etc.), recruitment costs, and any necessary equipment or tools the new hire will need. If you outsource recruiting, expect agency fees of roughly 15–25% of the new hire's first-year salary. Include these additional expenses in your hiring budget to avoid financial strain in the future.

2. Source candidates through multiple channels

When sourcing candidates, it’s important to have a strong knowledge of the role you’re trying to fill and the type of candidate that would best fit your startup’s culture and needs. Conduct a broad search using a combination of professional networks, specialized job platforms, and university recruitment channels. This multichannel strategy can increase the diversity of the candidate pool, and the likelihood of finding skilled candidates who are also a great fit for your needs. The right channels also depend on the role: technical and sales hires, for example, often require different sourcing approaches.

• Tap your professional networks
  Start by searching for candidates on LinkedIn, where you can also post job listings. Attend industry events and conferences to meet potential candidates in person. Remember to ask your personal and professional contacts if they know anyone who would be a good fit for the role. Personal recommendations can often lead to finding great candidates.

• Post on startup-focused job boards and recruitment platforms
  Different job boards attract different types of candidates. For a startup, look for platforms that are popular with people interested in working in a startup environment. Wellfound (formerly AngelList), for example, focuses on startup job listings. Also, consider industry-specific job boards that might attract the kind of talent you need.

• Look in technical communities for developer hires
  For engineering roles, source directly from where developers already spend time: GitHub, technical forums, and open-source communities. A candidate's public code and contributions can reveal skills that a resume alone can't. Sales hires, by contrast, are usually evaluated on track record and quota history rather than a portfolio, so referrals and industry-specific networks tend to matter more.

• Recruit through universities and colleges
  Connect with career services departments at universities and colleges. These departments can help you list your job openings and might invite you to job fairs. Participating in these events lets you meet soon-to-be graduates who are eager to start their careers and might be a good fit for a startup setting.

3. Run a structured interview process

The interview process is not just about evaluating the candidate—it’s also an opportunity for them to assess your startup as a potential workplace. Make sure to communicate your company’s vision, culture, and the potential for growth and development within your organization. This two-way assessment ensures that the candidate is a match for your startup and that your startup is the right place for them.

Conduct effective interviews

• Structure interviews for comprehensive assessment
  Plan your interviews to cover all necessary areas and topics. This usually involves a combination of different interview types, such as an initial phone screen, a technical or skills-based interview, and a final cultural fit interview. Each interview should have a transparent purpose and a set of questions designed to assess different aspects of the candidate’s abilities and fit.

• Use behavioral and skill-based questioning techniques
  Use a mix of behavioral and skill-based questions. Behavioral questions help you understand how a candidate has handled situations in the past, which can indicate how they’ll perform in the future. Skill-based questions assess their technical or specific job-related abilities. A developer might be asked to solve a coding problem, for example, while a marketing candidate might be asked to design a campaign strategy.

Evaluate candidates beyond technical skills

• Assess cultural fit and adaptability
  It’s important to determine how well a candidate will fit into your startup’s culture. Ask questions about their work style, as well as how they collaborate in teams and handle uncertainty. Look for candidates who are comfortable with a startup’s often fast-paced and ever-changing environment.

• Consider potential for growth and development
  Assess a candidate’s potential for growth. Startups often require employees to shift roles as the company grows. Candidates who show a willingness to learn new skills and take on new challenges can be valuable assets. Ask about scenarios in which they’ve had to adapt or learn on the job and how they approach professional development.

4. Make a decision

When making your decision, consider the immediate impact the candidate will have on your team and how they will contribute to the company as it grows. The right candidate should fit into your startup’s culture, be able to adapt to change, and grow with the company.

• Compare candidates
  Compare each candidate’s skills, experience, and potential for growth. A candidate with less experience but more growth potential might be a better long-term fit than someone with more experience but limited growth potential. Consider how each candidate’s strengths and weaknesses pair with the job’s requirements and your startup’s future needs.

• Gather diverse perspectives
  Include key stakeholders in the decision-making process. Ask different team members to participate in the interview process or discuss candidates with them afterward. Each team member’s perspective on the hire could be valuable in different ways. Someone with a technical job may be suited to evaluate technical skills, while an HR employee could provide an entirely different perspective on a candidate.

5. Onboard new hires with a clear plan

The final step in the hiring process is onboarding, which will establish a solid foundation for new hires at the company. A thoughtful onboarding plan will make a new employee feel welcome and prepared, while also integrating them into the company culture.

• Set up their workspace, tools, and access
  Make sure that a new hire’s workspace is ready for their first day. This includes setting up their desk, computer, and any other necessary equipment. Also, be ready to give them access to any software, tools, and systems they’ll need for their job. This preparation shows that you are organized and eager for them to start contributing.

• Integrate new hires into the team and company culture
  An effective onboarding plan goes beyond just teaching the new hire about their job duties. It should also include introducing them to your team and immersing them in your company culture. Plan welcome activities or team meetings so they can get to know their colleagues. Share your startup’s vision, values, mission statement, and traditions to help them embrace the culture.

• Establish goals and expectations
  Communicate goals and expectations from the start. This includes discussing their role, responsibilities, and how their work contributes to the broader objectives of the startup. Setting transparent expectations helps the new hire know what success looks like in their position and how they can achieve it.

Legal considerations when hiring

Complying with employment laws and regulations is important to avoid potential legal issues, especially for early startups that may not have a dedicated HR or legal team. Here are a few things to consider:

• Employment laws and regulations
  Educate yourself on any local or national labor laws that apply to your business, such as anti-discrimination laws and workplace safety regulations.

• Contracts
  Become familiar with different types of employment contracts, such as full-time, part-time, and contractor agreements. For your first hire, you'll typically need legal documents such as an offer letter, an employment agreement (or contractor agreement, if applicable), and often an IP assignment and confidentiality agreement to protect the company work product. Your contracts should explicitly outline terms of employment, compensation, benefits, confidentiality agreements, and termination conditions. While not a legal requirement, a basic employee handbook can also help set clear expectations as you continue to hire.

• Tax IDs
  Depending on your location, you may need to register for a federal Employer Identification Number (EIN) or a similar tax ID. You’ll use this ID number to report taxes and submit tax documents to the IRS (in the US) or the respective tax authority in your country.

• Tax withholding
  Understand how to withhold and pay federal employment taxes. In the US, these include income tax, Social Security, and Medicare taxes. Consider any state or local taxes that may apply.

• Payroll systems
  Keep accurate and detailed records of all payroll activities. Many startups use payroll software or hire payroll service providers to manage this complex task and ensure they can pay their employees correctly and on time. The payroll system should calculate gross pay, deductions (like taxes and employee benefits), and net pay.

Best practices to retain early startup employees

Once you’ve hired your initial employees, focus on retention. After investing so much time and money into hiring the right people, you’ll want to keep them, learn from them, and use what you’ve learned to attract the best talent to your startup. Here’s how to drive employee retention:

• Cultivate a culture of ownership and innovation
  Encourage a culture where employees feel like co-owners of the business. Share company goals, challenges, and successes in a transparent way. Reward innovative thinking and allow employees to contribute ideas freely. This sense of ownership can increase job satisfaction and loyalty.

• Implement a thorough feedback system
  Develop a feedback system that is continuous and constructive. This could involve regular one-on-one meetings, performance reviews, and anonymous feedback channels. The key is to make feedback a part of the company’s routine, not just a sporadic exercise.

• Invest in each employee's individual growth
  Ask about the career aspirations of your employees and personalize their path forward with mentorship programs, opportunities to lead projects, further training, and ways to connect their work to what they're genuinely passionate about. Offering personalized development shows you're invested in their long-term growth, not just their current output, and makes work feel more meaningful.

• Build resilience and flexibility
  Startups often face uncertain and fast changing environments. Encourage your team to have a flexible mindset by remaining open to change, learning from failures, and adapting strategies as needed. Resilience training and stress management workshops can be valuable tools to encourage this mindset.

• Emphasize the importance of mental health
  Recognize the mental toll that working in a high-pressure startup environment can have. Implement policies that support mental health, such as flexible work hours, mental health days, and access to counseling services.

• Offer equity and nontraditional compensation
  In early-stage startups, where cash might be limited, consider providing equity as part of the compensation package. This can attract top talent and pair their interests with the long-term success of the company.

• Create a diverse, inclusive environment
  Focus on building a diverse team from the start. Diversity in thinking, backgrounds, and experiences can lead to more creative solutions and a more effective workplace. Make sure that your hiring practices are free from biases and create policies that support an inclusive work environment.

• Establish clear pathways for advancement
  In a small team, traditional career paths might not be readily apparent. Create pathways for advancement and communicate these opportunities to your employees. This can help retain talent who might otherwise leave for more established companies with well-defined career progression.

• Build peer learning and cross-functional collaboration
  Encourage a culture where employees can learn from each other. You can facilitate this through cross-functional projects, peer mentoring, and regular knowledge-sharing sessions.

• Plan for the challenges of growth
  As your startup grows, be aware of the challenges that can come with scaling. This includes maintaining company culture, managing increased complexity, and integrating new team members effectively.

• Practice empathetic leadership
  As a leader, practice empathy. Know about the personal and professional challenges your employees face and provide support. Empathetic leadership can build a loyal and committed workforce.

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