Seed-Stage Startups: How To Build Your Team

Key takeaways

• Start with the right structure. Get clear on your priorities and what roles need filling before making your first hire.
• Balance expertise with adaptability. At the seed stage, hires need to go beyond skill and offer flexibility that can grow with your company. 
• Equity can stretch your budget. If you need to offer a lower salary, use equity offers to attract early believers.

Seed-stage startups often hit the ground running. With enough funding to spark real growth for the company, these early stages are marked with critical decisions. And one of the biggest ones is making the jump to hire. Building the right team can make or break the company's trajectory. 

The stakes are high and capital is limited. Ideas are big, but infrastructure is minimal. Startup founders need to understand how to build a lean but razor-sharp team that can deliver real outcomes. Hiring, however — especially for the first time — is harder than it looks. 

We offer a practical guide that seed-stage startups can use to hire their first employees and build a strong team in those early days. We'll walk through the timing of key hires, sourcing strategies, compensation structures, and an approach to lay the groundwork for your budding company culture.

What is a seed-stage startup?

Seed-stage startups are early-stage companies that have created a viable product idea and received their first major round of external funding. This funding is known as the seed round. Typically, this stage follows the pre-seed funding phase, where founders tap into cash from personal savings, friends or family members, or crowdfunding initiatives. It comes before the more substantial Series A and later funding rounds, where companies are expected to show significant, scalable growth.

Seed rounds are commonly raised from angel investors, venture capital firms, or startup accelerators and incubators. These investors exchange capital for equity in the company. They expect the startups they invest in to prove product-market fit, build a core team, and reach early customer milestones.

Hiring needs at the seed stage are uniquely high risk. Founders have to be strategic: Every hire affects runway, culture, and long-term growth. Some estimates note that up to 75% of venture-backed startups fail, so navigating this stage with precision is extremely important.

Funding realities: how seed-stage startups allocate capital

Startup funding during the seed stage is important. It's necessary not just for product development, but for bringing on early hires that can fuel growth even further. Because these rounds are typically the first major injection of capital, spending priorities tend to follow a very specific path.

According to Carta, the average seed-stage team has just 3.5 employees as of 2024. This is a fairly steep drop from 6.4 in 2022. This shift reflects both leaner operating models and a more cautious hiring approach shaped by investor expectations. 

Most seed-stage startups focus their capital on a few key areas:

• Product development.  The cost to build a minimum viable product (MVP), including engineering, UX, and infrastructure, can vary widely. Remember that it's expected that the seed round will validate product-market fit. 
• Initial hiring. Substantial costs also go toward hiring new employees. These early first hires are often senior engineers, growth leads, or product managers who can drive major impact with minimal ramp-up or training. 
• Go-to-market and customer discovery. Funding also has to be reserved for early marketing, customer interviews, and initial sales efforts to validate demand and shorten the feedback loop.
• Operations and runway. Any remaining budget goes toward tools, legal, admin, and extending the company's cash runway.

Angel investors and venture capital firms will analyze all of these asset allocations very carefully. Startups that are spending heavily on full-time roles without validating core assumptions can be a big red flag. Instead, founders often hire independent professionals early on to fill gaps without locking in long-term cost commitments.

When and who to hire first

Startup founders have to get their timing right. They often wait too long or jump too soon to make their first hires.

A good rule of thumb? It's time to grow your team when the work begins to bottleneck progress or prevent product development or market validation.

Before hiring, founders should:

• Identify skills gaps that are slowing progress
• Define clear roles with measurable outcomes
• Decide whether each need is best filled by a co-founder, early employee, or contract professional

Common first roles for seed-stage startups include:

• Technical co-founder or CTO. Owns product architecture and execution, which is needed if the founding team lacks deep engineering expertise.
• Product manager. Translates vision into a roadmap and drives iteration cycles with technical and customer feedback.
• Generalist marketer or growth lead. Helps validate channels and messaging while acquiring early users.
• Operations lead. Keeps everything running smoothly across legal, finance, logistics, and customer service.

In the early days, generalists who can wear multiple hats and learn on the fly are often more valuable than deep specialists. However, some roles — like engineering leadership or regulatory compliance — require someone with expertise from day one.

If you need to cover gaps without making long-term commitments, then independent professionals may be a good fit. For example, many startup founders hire contract workers for things like brand design, copywriting, or back-end development while keeping core strategy in-house. Hiring contractors through platforms like Upwork can also delay the need to bring on full-time employees or a full-time human resources lead too early. 

How to source talent for your startup

At this seed stage, finding the right people is just as important as finding the right skills. Startup employees need to agree with your mission and be ready and able to adapt to constant change. Cultural fit matters, too, but only if long-term value is on the table.

There are several great strategies for sourcing and attracting great candidates at this stage:

• Upwork. Hire vetted independent professionals on demand in specialties like design, development, writing, and more. 
• Social media. Platforms like X and LinkedIn can help you attract people already aligned with your space.
• Business networks. Leverage personal and professional connections to find values-aligned contributors quickly.
• Referrals. Ask advisors, mentors, and early supporters for warm intros to top talent.
• Accelerators and incubators. Tap into peer cohorts and alumni communities where vetted builders are actively exploring opportunities.
• Your own networks. Start with people who know and trust you, since they're more likely to take early-stage risks.

To attract great candidates, startups should lead with purpose. A compelling mission, transparent compensation (including equity), and founder visibility can make your offer appealing.

When you need to scale quickly or fill senior roles, working with a recruitment agency may make more sense. But at the seed stage, you might not need the recruiting process just yet. It's often faster and more effective to recruit through warm referrals and platforms built for agile hiring.

Compensation, equity, and values alignment

Early-stage startup employees rarely take the job for the paycheck alone. With limited cash to offer, business owners need to put together a compelling compensation package that draws applicants in. This is usually a combination of salary, equity, and mission-driven purpose.

Founders who can't compete on cash attract talented people by building a strong startup culture rooted in shared vision and transparency. Equity becomes the great equalizer: It offers candidates a real stake in the company's future.

Common equity considerations for early employees include:

• Equity percentage. These grants will vary, depending on the employee’s role and stage.
• Vesting schedule. Startup founders on Reddit recommend a four- or five-year vesting schedule with a one- to two-year cliff to protect the company and ensure commitment. 
• Incentives. Be clear about the potential upside, but also the risk — especially in the absence of liquidity.

Employees aren't the only ones paying attention to these compensation packages; investors are, too. They also expect thoughtful equity distribution. Giving away too much equity too early on can raise concerns during future funding rounds.

If equity distribution is a concern, another opportunity is to take advantage of independent talent or contractors. These professionals let founders preserve equity for full-time early employees, but they still move quickly on key deliverables and help fuel the company's growth.

Above all, don't forget about values alignment; it's non-negotiable. Your early hires will influence everything from product voice to decision-making. Make sure they align with the company's mission and long-term vision before extending a job offer.

Building and retaining your early team

Hiring is only half the battle. The other half, retention, starts on day one. A solid onboarding process is a good start here. It helps new team members integrate quickly and get acclimated, making them feel supported in their new roles.

To keep top talent on board:

• Prioritize transparent communication, especially about goals and challenges
• Recognize impact, not just effort
• Offer real paths for growth, even if the roles remain fluid

Flexible work models are another major retention tool. Offering remote or hybrid options, building distributed talent teams, and working with independent professionals can help small teams punch above their weight while maintaining work-life balance.

Retention also depends on a smooth hiring process. That includes a crystal-clear description of the role and expectations, and investing in a thoughtful interview process. Look for resumes focused on what matters most at this stage: adaptability, initiative, and alignment.

Start building your team via Upwork

Seed-stage startups don't have the luxury of trial and error when it comes to hiring people. The key is knowing how to hire employees for startup success by aligning talent with short- and long-term goals.

That means balancing limited compensation with a compelling vision, flexible structure, and inspiring mission. It also means thinking ahead: You have to hire now for needs that will become more complex after Series A funding.

Independent professionals can help fill gaps quickly and move key projects forward. As your team scales, freelancers can complement early employees and allow you to grow organically.

Use Upwork to connect with experienced independent professionals and build your team with speed and intention. For those looking to join early-stage companies, explore new opportunities on Upwork's freelance jobs page.

FAQ

Hiring employees comes with many questions, especially for startups. Let's troubleshoot some of those specific questions in the early stages.

How do you hire employees for a startup with no money?

Even with limited cash, early startups can attract top talent with a few smart strategies:

• Offer equity. Exchange long-term upside for immediate buy-in.
• Tap your own network. Reach out to past colleagues, mentors, or peers who believe in your vision.
• Hire independent professionals. Freelancers on contract can deliver big results without a long-term commitment.
• Highlight growth potential. Many early employees value experience, mentorship, and mission-driven work just as much as salary.

How can seed-stage startups attract investors?

Raising funds takes a lot more than just a good idea. Founders need to show momentum and credibility. Start by:

• Joining an accelerator or incubator to gain mentorship and early visibility
• Building a detailed business plan and pitch deck
• Demonstrating product-market fit with real metrics
• Assembling a strong founding team
• Being transparent about valuations and runway

Investors want to see that startup founders understand the market, know their numbers, and have a plan to scale.

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