"One of the most consequential decisions early-stage founders have to make is who they will bring on as their founding team. The first five to 10 employees will have a massive impact on the company culture, and the precedents set with them are difficult to change down the road. That's why this season on Build Mode, we're diving into what it takes to build a world-class founding team."
"Sagalov categorizes investors into three main buckets: the ones that are heavily involved and function as an extension of your team, the ones that will give you a check and then vanish, and the micromanagers. The first type of investor is the most valuable according to Sagalov: "They're going to help you with recruiting, hiring, go to market. And the most interesting thing with those investors is often it's completely disconnected from the check size.""
"Although it may feel counterintuitive to turn down investments, working with VCs who will become overly involved in the process may cause more harm than good in the long run. Sagalov said, "The only bucket that I avoid is this third bucket of investors who give you money and they're kind of in your kitchen, meddling. They have an opinion on everything. They get stressed out when things don't go right.""
Founders must prioritize the first five to ten hires because those employees establish enduring company culture and precedents that are hard to change. Early hiring decisions should account for recruiting ability, go-to-market needs, and compensation structures that can scale with growth. Cap table construction requires strategic planning at the seed and pre-seed stages. Investors fall into three categories: deeply involved partners who act as extensions of the team, passive check-writers, and micromanagers who interfere. Prioritize engaged investors regardless of check size and avoid micromanagers. Conduct due diligence by speaking with current portfolio companies before accepting investment.
Read at TechCrunch
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