

Ask HN: I'm about to hire the 1st employee for my startup. What should I know? - zakdances

I'm very close to hiring a first employee for my tech startup. This potential first employee has a legal background (as an attorney) and is a friend. I want to bring this person on as an important assistant and CFO (an executive position). How should I determine salary and stock options? What dangers or common pitfalls should I be aware of? What should a job offer look like exactly (written letter, email, etc)?
======
staunch
\+ Have a 4 year vesting schedule with a 1 year cliff, so if they don't work
out they're not a shareholder anymore.

\+ Offer them multiple options of equity/salary and let them pick what works
best for their situation. Once you've agreed verbally write it up in an email
as a non-binding offer letter, then have your lawyer make it legal.

\+ Don't let them push you around. Lawyers are bred to be intimidating - keep
that in mind. Don't get dazzled with bullshit. Do research and follow Silicon
Valley best practices (like vesting). You'll regret it forever if they
convince you to agree to something stupid.

\+ Absolutely do not let them handle the equity/financing/control documents
for the company. Get an external firm to do it for you, despite the cost.
Having someone with a conflict of interest handle your legal documents is
Officially Stupid.

\+ Do a trial period first. Pay them $N to work for a couple weeks or a month.
Don't even talk about it being for a long term gig. Just make it about the
project and make it as well defined as possible. It'll be much easier to
simply not continue after that then to fire them once they're officially
hired.

~~~
zakdances
Great suggestions, I especially think the trial period idea is interesting.
There's a few things that complicate it a bit though...this person will have
to move to a different city to work, so the compensation will have to be
higher to account for the uncertainty. Also, if it does work out, I don't want
to the person to line something else up before the 6 months are out....I
suppose there'll need to a "buffertime" between when a permanent job is
offered and the end of the temporary phase.

------
JackStraw
Perhaps, you should reverse the questions. If your potential CFO doesn't ask
the following don't hire them: 1) Why do you want me as the CFO to manage the
hiring of technical people? Isn’t that what a CTO should be doing? 2) Why are
you looking for a CFO, when what you describe really is an executive assistant
or office manager? 3) Why are you looking to hire me as CFO, but not provide
any substantive decision making influence like a cofounder? 4) Why aren’t you
hiring an outsourced, third-party that can act like a CFO combined with a
little part time temp work to do your assistant stuff? 5) Are you legit?

------
fearless
Why are you hiring a CFO/executive manager if you don't have any employees?
Who is your CFO going to manage? Shouldn't you be hiring engineers first?

Sounds like this person should be a cofounder, not an employee.

~~~
zakdances
They're not a manager. The position calls for a great organizer who will help
with general business administration, including the next round of hiring which
will include engineers. Right now my most pressing concern is addressing my
current skill shortfall, which is in finance and general administration. My
engineering skills are solid and are able to keep the product shipping at the
moment, but I need someone to take on general business duties. I'm aware that
engineers are the heart of any tech startup, so I'm not taking this decision
lightly. I'm confident this is the right position I need filled presently, but
I need help putting together an job offer package and understanding the
implications of all the details therein.

------
zakdances
If any admins are reading this, I'm not sure if this question got in the right
category...its suppose to be an Ask HN question but I don't see it showing up
there.

