Hiring Your First Team
Your first hires define your company culture, your execution speed, and your burn rate. Every early hire is a bet on a person, not a role.
When you raise a priced round, investors will expect an option pool of 10–20% of the post-money cap table. They will typically want this pool created before the round closes — meaning the dilution comes from the founders, not the investors. Understand this mechanic before you negotiate your first term sheet.
Hiring across state lines is a tax on your time
If you are early-stage and want to hire someone in another state, you have two options. Neither is free.
Option one: full-time employee. You now need to register your company as a foreign entity in their state, set up state tax withholding, comply with that state's labor laws, and often handle workers' comp and unemployment insurance separately. Multiply that by every state you hire in.
Option two: contractor. Faster, cheaper, simpler on day one. But the IRS has rules. A contractor controls how and when they do the work. The moment you are setting their hours, requiring specific tools, or treating them like staff, you have created an employee in everything but name. The penalties for getting this wrong are real.
Option three: EOR. An Employer of Record hires the person on their books and leases them back to you. You pay a premium. You skip the multi-state setup. For a single hire in a new state, the math usually works.
Every hiring decision has a hidden compliance cost. Factor it in before you make the offer, not after.
Deel acts as your Employer of Record across 150+ countries and all 50 US states. Hire a full-time employee in a state you are not registered in, or a contractor across borders, without setting up a foreign entity, registering for state tax withholding, or untangling local labor law. Deel handles compliant contracts, payroll, benefits, equity for international hires, and contractor classification — turning a multi-week legal project into a same-day onboarding. For a single hire in a new jurisdiction, the EOR premium is almost always cheaper than the time and risk of doing it yourself.