From someone who’s funded 300+ B2B companies and seen every hiring disaster imaginable
Your first five hires will shape your next fifty. Get them wrong, and you’re not just burning cash—you’re setting your company culture on fire.
After funding over 300 B2B companies, I’ve watched brilliant founders torpedo their startups with terrible early hiring decisions. The good news? Most of these mistakes are completely avoidable.
The Pre-Seed Reality Check
First, let’s define pre-seed properly. This isn’t your initial angel round—it’s that critical $1-2M funding round after you’ve built your MVP. At this stage, you have five essential functions:
- Build the product
- Raise money
- Sell the product
- Support customers
- Operate the business
Here’s the brutal truth: founders cannot delegate everything. You’ll remain the primary fundraiser and business developer. Anyone telling you otherwise is selling you something.
Your Hiring Priority List (And Why Most Get It Backwards)
Engineers first. Always. 70% of your first hires should be engineering because your primary leverage is getting product built. Not marketers. Not business development. Engineers.
Customer success second. It’s harder to retain customers than acquire them. Hire someone who can keep your early customers happy while you’re out selling.
Sales support third. But only after you’ve established founder-led sales. Don’t hire a VP of Sales before you’ve proven you can sell it yourself.
Never hire early: CFO, VP Sales, senior operations. These roles are startup killers in the pre-seed stage.
The Four Deadly Hiring Mistakes
1. Resume Over Conviction
Stop hiring impressive LinkedIn profiles. That Microsoft VP who looks amazing on paper? He lasted three months at one of my portfolio companies because he couldn’t handle startup culture shock. He expected the infrastructure of a 10,000-person company in a 10-person startup.
Instead: Hire for cultural fit and mission alignment. Look for the “black sheep” candidates who might not have perfect resumes but have the scrappy determination your startup needs.
2. Hiring Senior People Too Soon
That 15-year principal engineer from Google? Probably not your first hire. Senior people from big companies often struggle with the cultural shift to startups. They expect process, resources, and clear hierarchies that don’t exist in pre-seed.
Instead: Look for 5-10 year experience level. People who’ve seen some stuff but are still willing to get their hands dirty.
3. Delayed Firing Decisions
I’ve seen founders drag out bad hires for 6-9 months, burning cash and killing morale. One portfolio company kept a programmer for months who couldn’t collaborate with anyone. Another kept a facility manager who was literally embezzling funds.
Instead: 90-day cliff. Fire fast. Document everything. Set clear expectations upfront.
4. Hiring “Startup Tourists”
These are people who want to “try the startup thing” but lack real commitment. They’ll jump ship the moment things get tough (and they will get tough).
Instead: Look for people who are genuinely excited about your mission, not just curious about startup life.
The Gap Analysis Framework
Before every hire, do a gap analysis. Ask yourself:
- What’s breaking in our business that founders can’t handle?
- Can AI solve this problem instead?
- Are we hiring for a real gap or just because we think we should?
One founder I know was about to hire a content marketer. After running this analysis, they realized AI could handle 80% of what they wanted to hire for. Saved them $80K and 6 months of management overhead.
The 1099 Strategy
For non-core functions like marketing, consider contractors. Focus your full-time hiring budget on technology and sales—the functions that create the most value. Investors prefer companies where the highest-value work is done in-house.
The Equity Trap
Stop splitting equity equally among co-founders. This is startup suicide. Use tools like Slicing Pie to align contributions with stakes. Your equity should reflect value created, not friendship levels.
The Solo Founder Challenge
If you’re a solo founder, you’re already fighting an uphill battle. VCs prefer teams of 2-3 people. Consider finding a senior engineer (not co-founder) and offering 5% equity to help build product while you focus on sales and customer outreach.
Pro tip: Generate $5K-10K in ARR before seeking funding. This makes fundraising infinitely easier.
The Network Effect
Your network is your best hiring source. Not job boards. Not LinkedIn InMails. Your network. Use it wisely.
Always use scorecards and live task assignments in your hiring process. Resumes lie. Performance doesn’t.
The Bottom Line
Early-stage hiring sets the tone for everything that follows. Choose people who complement your strengths, share your mission, and can wear multiple hats without complaining.
Remember: hire fast, fire fast. Document everything. And never, ever let an impressive resume blind you to cultural red flags.
Your first five hires will make or break your startup. Choose wisely.
Want more battle-tested startup advice? Follow me on Twitter for insights from 300+ B2B investments and the hiring disasters that taught me everything.
More reading
– First Round Review Hiring Hacks
– Lenny’s Newsletter Hiring your early b2b team
– Y Combinator How to hire your first engineer
– Robert Waters, post funding hiring guide
–The first 8 people you should hire
–How to hire as an early stage startup (Tom Wesseldine)
