After 200+ angel investments, I've seen the same the 5-point checklist for your first employee contract mistake destroy companies over and over.
Hiring your first employee is a huge milestone, but get the contract wrong and it's a nightmare. This isn't generic advice; it's a battle-tested 5-point checklist to protect your company.
Why Most Approaches Fail
Let me be direct: about 70% of the approaches I see to the 5-point checklist for your first employee contract are fundamentally flawed. Not slightly off. Fundamentally flawed.
The root cause is usually one of three things:
- Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
- Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
- Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Reality Nobody Talks About
Most people approach the 5-point checklist for your first employee contract with assumptions that made sense five years ago. The world has moved on. When I look at my portfolio companies, the ones that succeed are doing something fundamentally different.
The first thing to understand is that timing is everything in this game. I've seen this play out across dozens of companies. The pattern is unmistakable.
At RemoteTeam, we learned this the hard way. We spent months going down the wrong path before realizing that you should focus on one thing and do it exceptionally well. Once we made the switch, everything changed.
Real Talk: What Actually Matters
I'm going to cut through the noise and tell you what actually matters when it comes to the 5-point checklist for your first employee contract.
First, execution speed beats perfection. Every time. I've never seen a company fail because they moved too fast on the 5-point checklist for your first employee contract. I've seen plenty fail because they moved too slow.
Second, measure everything. If you can't measure it, you can't improve it. Set up tracking from day one, even if it's basic.
Third, talk to your users. This sounds obvious but you'd be amazed how many founders build their the 5-point checklist for your first employee contract strategy in a vacuum. Get out of the building. Talk to real people.
This connects to broader themes around employment law, hiring, startup law that I've been thinking about a lot lately.
The Bottom Line
Look, the 5-point checklist for your first employee contract isn't rocket science. But it does require intentionality, consistency, and a willingness to learn from mistakes.
If you take one thing from this article, let it be this: start now, start small, and iterate. The founders who win at the 5-point checklist for your first employee contract aren't the ones with the best strategy on paper. They're the ones who execute, learn, and adapt faster than everyone else.
I've been doing this for over a decade. The patterns are clear. The companies that take the 5-point checklist for your first employee contract seriously outperform the ones that don't. Every single time.
If you're working on something interesting in this space, I'd love to hear about it. Drop me a line.
Frequently Asked Questions
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.