Stay up to date on upcoming events, deadlines, news, and more by signing up for our newsletters!

Hiring and firing decisions can fundamentally shape the trajectory of any startup. The key to building the right team: hire slow, fire fast.

Setting the Stage: Why Intentional Hiring and Firing Matters

Early hires create your startup’s DNA. Each addition can either strengthen your mission or weaken it if friction is created. Similarly, knowing when (and how) to let someone go is just as critical as deciding whom to bring on and how long you test to decide if they're the right fit.

Hiring: Principles and Practical Tactics

1. ALWAYS Do the Upfront Work of Defining the Role

• Define the role in writing, including deliverables and success metrics.
• Distinguish between “must-have” and “nice-to-have” skills.
• Seek advice from your trusted circle. Ask other founders what worked for them in making their (first) X hire.

1A. Write Down What You Need FOR EACH ROLE

• If you're not the technical founder, make sure you find a co-founder who is. 
• Hire people who love what you and your company are doing so much that  they will do it without pay. 

2. Hiring for Mission, Values, and Fit

• Prioritize culture and values alignment alongside skills. You’d rather hire the person whose skillset is not as robust, but attitude, optimism, and work ethic supersedes the one with a robust skillset in X and a poor attitude.
  •  But also, don't keep people who are not delivering results. DUH!
• Use structured questions and interview rubrics to minimize bias and ensure fairness.
• Balance passion and performance—commitment matters, but output is essential.

3. Weighing Full-Time Hires vs. Contractors or Outsourcing

• For clearly defined, short-term needs (e.g., 3–6 outcomes), structure engagement as a mini project with a contractor or agency.
• Consider advisors for specialized insight, and transition to full-time if the need persists.

4. Offshore and External Talent

• Offshore hiring can offer cost and skill advantages, but requires clear communication, defined deliverables, and strong onboarding.
• External agencies tend to cost more – use them for speed and expertise when internal bandwidth is lacking.

5. Compensation and Alternatives

• Startups often can’t pay top cash salaries – use equity, milestone bonuses, or “future promise” compensation.
• For critical advisors or part-time contributors, grant small, time-bound equity awards.
• For non permanent employees like interns 
• Benchmark compensation using free tools (like Pave) to maintain internal fairness.

Building a Great Team: Ongoing Assessment and Adaptation

1. Team and Leadership Evolution

• Early employees may thrive at the seed stage, but not scale – regularly assess fit as you grow.
• Leadership may need to evolve at each fundraising stage or as operational complexity increases. If people don't realize they've outgrown the role, make sure they're really well taken care of before you let them go. 
• Invest in ongoing self-awareness and feedback habits to minimize mismatches.

2. Founder Compensation

• Pay yourself enough to reduce stress and stay focused, but align with investor and market expectations.
• Pay yourself enough to avoid financial stress and distraction, but not excessively!! Certainly make sure if your employees asked you how much you made – you wouldn't be embarrassed to tell them. It should be justifiable to outside hires and investors.
• Adjust founder pay as your company hits milestones and raises additional capital.

Managing Outsourcing, Delegation, and Your Own Bandwidth

• Review core responsibilities weekly; offload tasks that distract from high-impact activities.
• If work in areas like finance, HR, or ops grows beyond your expertise, consider outsourcing or automating.
• Use PEOs – professional employer organizations like Justworks, Rippling, Gusto, in the earliest stages to manage payroll, benefits, and compliance – especially with a distributed team.

Compassionate Firing and Honest Conversations

• Address performance or cultural mismatches promptly and humanely.
• Communicate directly and transparently – set expectations, give feedback, and be honest about compensation or transition realities.
• Use severance and milestone-based agreements to support transitions when pay is limited.

Putting It All Together: General Startup Recommendations

• Treat every hiring and operational need as a balance of cost, impact, and efficiency.
• Continually reassess which roles make sense as internal hires versus external services as your company evolves.
• Revisit your PEO/benefits platform, compensation philosophy, and advisor engagement at each new stage of growth.

Conclusion: Leadership Is About Courage and Clarity

Startup founders set both tone and trajectory. Making smart hiring and firing decisions — rooted in clarity, compassion, and mission — ensures you build not just a business, but a team that truly thrives.