General Catalyst VC Shares Founding Team Playbook

Ask any seasoned investor where startups go sideways and you’ll hear a familiar refrain: it starts with the founding team. A managing director at General Catalyst, who has founded, invested, and advised across hundreds of pre-seed and seed companies, is sharing a pragmatic playbook for assembling those first critical teammates—and for avoiding the structural mistakes that haunt companies years later.

The guidance is blunt but actionable: hire missionaries, not mercenaries; structure equity to prevent stalemates; and treat investor selection as a team-building decision, not a fundraising checkbox. It’s a blueprint shaped by pattern recognition across wins, wipeouts, and everything in between.

What To Look For In Your First 10 Startup Hires

Early employees set your cultural DNA. Skills matter, but motivation matters more. The target profile is someone compelled by the problem and resilient in ambiguity—comfortable with rough drafts, shifting priorities, and incomplete data. If a candidate’s primary calculus is cash or title, they’re not early-stage material.

Be explicit about risk and reward. Walk candidates through runway, customer proof points, and plan B scenarios. Transparency filters in true believers and protects trust if turbulence hits. People problems are a leading failure mode; CB Insights’ postmortems routinely place team issues among the top reasons startups shut down, underscoring why this screening matters.

A practical test: give candidates a time-boxed take-home aligned to a real company need and assess for learning speed, bias to action, and communication clarity. References should probe for grit, not just pedigree.

Investor Fit Is Part Of The Core Startup Team

Pick investors like you pick co-workers. The GC partner describes three recurring types: hands-on partners who operate as an extension of your team; passive check-writers who won’t block but won’t build; and meddling micromanagers who add heat without light. The first group is disproportionately valuable—often regardless of check size.

Diligence your investors. Call portfolio founders and ask for concrete examples of help with hiring, go-to-market, or tough pivots. Probe how they behaved when metrics missed, not just when they soared. Red flags include defaulting to control, slow decision-making, or “in your kitchen” behavior that drains focus.

Equity Splits That Survive Year Five and Beyond

Fair does not always mean equal. The recommendation: create a slight differentiation—sometimes as little as a single share—so there’s a clear tie-breaker. Co-CEO deadlocks are expensive. Pair this with standard four-year vesting, a one-year cliff, and double-trigger acceleration to align incentives through good and bad markets.

Resist “idea premium” overreach. Most of the value gets created post-incorporation. Harvard Business School research by Noam Wasserman ties a significant share of startup blowups to co-founder conflict; over-allocating early can sow resentment when contribution levels diverge.

Document responsibilities and decision rights up front. A simple operating agreement that defines who owns product, who owns sales, and how disputes escalate is worth more than another slide in your pitch deck.

Compensation That Scales With The Company

Anchor offers with reputable benchmarks. Platforms like Carta Total Comp and Pave provide market bands that keep you competitive without torching runway. For seed-stage technical hires, a common pattern is modest cash below big-tech rates paired with meaningful equity—often low-to-mid single digits for the earliest engineers, stepping down as risk declines.

Build a refresh philosophy on day one. Annual or milestone-based refreshes prevent equity stagnation and reduce retention risk as valuations rise. Communicate expected value using realistic scenarios, not unicorn math. Option exercise support—extended windows or tender programs—can be the difference between landing an A+ candidate and losing them to FAANG.

Keep The Cap Table Clean and Investor-Friendly

Reserve an option pool of roughly 10–15% before or at seed to avoid emergency top-ups later. Be sparing with advisor grants; time-bound, milestone-tied agreements in the 0.1–0.25% range are typical for hands-on advisors. Fragmented cap tables slow deals, complicate governance, and reduce your ability to recruit difference-makers.

In priced rounds, optimize for partner quality and pro rata clarity over headline valuation. A slightly lower valuation with the right lead and clean terms often outperforms a frothy cap paired with misaligned investors.

Diversity As A Performance Lever From Day One

Diverse founding teams are not just virtuous; they’re effective. First Round Capital’s long-running analysis found startups with at least one female founder outperformed all-male teams by 63% on value created. Make inclusion a design choice from hire No. 1: structured interviews, calibrated rubrics, and top-of-funnel sourcing beyond your immediate network.

The Playbook In Practice For Founding Teams

Assemble missionaries who can build from zero, reference-check investors like teammates, structure equity to avoid stalemates, and align compensation to both risk and runway. Do these well and your first 10 hires become a force multiplier—accelerating execution, attracting the next 50, and compounding culture the way compounding is meant to work.