One of the most consequential decisions early-stage founders have to make is who they will bring on as their founding team. The first five to 10 employees will have a massive impact on the company culture, and the precedents set with them are difficult to change down the road. That’s why this season on Build Mode, we’re diving into what it takes to build a world-class founding team.
To kick off season two, Isabelle Johannessen is joined by Yuri Sagalov, managing director at General Catalyst and former founder, YC partner, and seed investor at Wayfinder Ventures. Sagalov has worked with hundreds of pre-seed and seed-stage companies and has seen firsthand the best (and worst) ways to hire in the early days.
In this episode, Sagalov offers his best pieces of advice for founders who are hiring their first team, strategically building their cap table, and forming compensation structures that can scale with the company.
The three types of investors (and which one to avoid)
Sagalov categorizes investors into three main buckets: the ones that are heavily involved and function as an extension of your team, the ones that will give you a check and then vanish, and the micromanagers.
The first type of investor is the most valuable according to Sagalov: “They’re going to help you with recruiting, hiring, go to market. And the most interesting thing with those investors is often it’s completely disconnected from the check size.”
Although it may feel counterintuitive to turn down investments, working with VCs who will become overly involved in the process may cause more harm than good in the long run. Sagalov said, “The only bucket that I avoid is this third bucket of investors who give you money and they’re kind of in your kitchen, meddling. They have an opinion on everything. They get stressed out when things don’t go right.”
In a fundraise, everyone is putting their best foot forward, so Sagalov suggests reaching out to current portfolio companies before committing to an investor. “The best thing you can do as a founder is actually talk to portfolio companies, talk to other founders that they’ve worked with, ask for concrete examples of how they’ve been helpful, if they’ve been helpful, and then actually ask how they were when things didn’t go right.”
Techcrunch event TechCrunch Founder Summit 2026: Tickets Live On June 23 in Boston, more than 1,100 founders come together at TechCrunch Founder Summit 2026 for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately
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