In this episode we answer questions about your top employees. The biggest problem with top employees is that they might leave! How do you make sure they stick around? We are here to help! In this episode we answer questions including:

• What to do if a key employee wants to become a founder themselves?
• How do I handle competitors trying to hire my best salespeople?
• How do we keep our first employee as the company scales?

All of these questions were submitted by listeners just like you. You can submit questions for us to answer on our website TheStartupHelpdesk.com or on X/Twitter @thestartuphd - we'd love to hear from you!

Your hosts:

• Sean Byrnes: General Partner, Near Horizon www.nearhorizon.vc
• Ash Rust: Managing Partner, Sterling Road www.sterlingroad.com
• Nic Meliones: CEO, Navi www.heynavi.com

Reminder: this is not legal advice or investment advice.

Q1: What do I do if a key employee wants to become a founder themselves?

Ideally, you would be the one suggesting that this key employee become a co-founder, not the other way around. You don’t want someone to hold you ransom on their pursuit of this new title. Further, becoming a co-founder is another level of commitment. If they have demonstrated they are up for the task, set expectations about what new responsibilities come with the co-founder title.

One of the challenges with adding a co-founder later in the process can be equity. Be generous with equity without sacrificing your ability to hire more great people. Don’t be afraid of big equity grants on 6 year vesting schedules. Lastly, you can make key employees feel exceptionally valued without giving them a co-founder title. Don’t rush into offering someone this new responsibility before thinking about how else to value their great work.

Q2: How do I handle competitors trying to hire my best salespeople?

Top salespeople are an incredible asset – there is always a risk that your competition will try to lure them away. Salespeople are motivated by money. If they think they will make more money with you, they will stay. However, this means they need to believe they can sell more with you.

Make sure your commission plan is competitive. This allows you to further reward performance with less pressure to raise salaries and guaranteed money. Give your salespeople more accelerators for hitting or exceeding their targets. Make sure the targets are not unreasonable.

This proactive approach can keep you in the driver seat. The golden ticket to stopping the competition from hiring away your best talent? Continuously create great reasons for top performers to stay.

Q3: How do we keep our first employee as the company scales?

So, one of your best engineers wants to leave and start their own company. And you’re worried others might leave with them? When you hire great talent, there is always the risk that they will leave to pursue their next great opportunity. Once someone talks about leaving, odds are they are going to leave eventually.

The best policy for retention is love not fear. Wish them well. If you have the means to do so, consider investing in their next startup.

Going forward, do a better job of understanding top employees’ motivations. You can provide more ownership to someone like this, much earlier in the process.

Implement a transition plan. If they aren’t on a deadline, they might be willing to stay for a few months so you can hire a replacement. Along the way, make sure you understand if there is anything they are running away from.

Most importantly, give others a reason to stay. If your startup offers more value to top performers than the alternative, you can make staying better than leaving.