Question
We just shortlisted a Tech Cofounder on our Early stage Self funded Tech Marketplace startup.Hes good on the skill set but we are not sure yet on the ‘compatibility’ part- which we are counting on as very important as well for the core team.
Whats the Best way to go forward with this: testing the ‘compatibility’ with salary for say 2-3 months before handing equities or straight away giving out equities?
Affordability shouldn’t be an issue since we are highly particular on selection of the core team.
Answer
We have hired a lot at our company and for higher level positions often the best way to structure this is by using a "vested" equity structure.
Your main goal is to determine if this person the best fit for our company now and long-term. This structure allows you to do this and limits your risk profile of hiring the wrong person and giving away too much equity.
An example might be structuring a deal where X new hire gets X in equity but it is vested over time. You can also put in the contract that if X person leaves before let's say a year they are entitled to no equity.
A year is often a great time frame to ensure you have the right person and they are committed.
Hope this helps
