Start-Up Compensation and Hiring | Summary and Q&A

March 23, 2010
Stanford Graduate School of Business
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Start-Up Compensation and Hiring

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In this video, a panel of experts discuss startup compensation and hiring. They cover topics such as how to build a team from scratch, dividing equity between founders and hires, and strategies for finding and retaining the best talent.

Questions & Answers

Q: What is the importance of finding a mentor or advisor when building a team?

Finding a mentor or advisor who has experience in growing a company can provide valuable advice and guidance. They can offer objective advice, help with decision-making, and introduce you to connections in the industry.

Q: How do you choose the right partner when starting a company?

When choosing a partner, it is important to find someone who shares your ideals and has similar attributes such as conviction, resilience, and energy. It's critical to pick someone who you want to work with and who compliments your skills and strengths.

Q: What qualities should you look for when hiring your first executive?

When hiring your first executive, it is important to find someone who has the right experience and skillset for the role. However, it is also necessary to find someone who fits well within the organization culture, listens well, and aligns with the company's values and goals.

Q: Should you hire specialists or generalists when building your team?

It is beneficial to have a combination of both specialists and generalists when building a team. While specialists bring specific expertise, generalists can adapt to the changing needs of the business and help in building the company.

Q: How should equity be divided between founders and early hires?

Dividing equity is a challenging decision that should be planned ahead. It is recommended to set aside around 20% of the equity for employees and maintain alignment between investors and management. It's important to balance the interests of all stakeholders and to keep the equity distribution as simple and transparent as possible.

Q: How do you ensure that employees are engaged and motivated by equity compensation?

While equity compensation is important for making employees feel connected to the success of the company, it should not be the only motivating factor. It's essential to hire people who believe in the team, the product, and the company's vision and to emphasize the importance of building a strong culture.

Q: What strategies can be used to attract top talent to a startup?

To attract top talent, it is important to offer a competitive compensation package, but also to appeal to the individual's passion and personal interests. Providing opportunities for growth, creating a positive work environment, and fostering a strong company culture can also be attractive factors.

Q: What advice would you give to someone creating a team from scratch?

One piece of advice is to find a mentor or advisor who can provide objective advice and guidance. It is also essential to take time in selecting partners and hires, considering values, shared vision, and cultural fit. Building a team requires patience, good decision-making, and having trust in the individuals you bring on board.

Q: How can a founder ensure a successful transition when bringing in a professional CEO?

When bringing in a professional CEO, it is essential to have open and honest communication between the founder, the CEO, and the board. Founders should be willing to relinquish some control and allow the CEO to make their own decisions. It is also crucial to bring in someone who shares the founder's passion and vision for the company.

Q: What advice do you have for founders considering co-founding a company?

It is important for co-founders to work together before solidifying their partnership. They should spend time getting to know each other, understanding their strengths and weaknesses, and ensuring they have compatible working styles. The division of equity should be a negotiation based on what each co-founder brings to the table.


Building a successful team for a startup requires careful consideration of various factors. It is important to find a mentor or advisor who can provide guidance and help navigate the challenges of building a company. When selecting partners or executives, look for individuals who share your values, have the necessary skills, and fit well within the culture of the organization. Dividing equity should be done with careful planning and transparency, keeping the interests of all stakeholders in mind. Attracting top talent requires a combination of competitive compensation, opportunities for growth, and a strong company culture. Finally, when considering co-founding a company, spend time working together before solidifying the partnership, and ensure that each co-founder brings complementary skills and aligns with the vision for the company.

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