What You Need to Know:
Budget – It may seem unfair, but in the world of recruiting, the poorer companies tend to have to pay more for good employees.
Why? When a solid employee is on the market, chances are that you are not going to be the only company they are speaking to.
While you believe in your company 200%, the interviewee is not an entrepreneur; they are employees who are possibly concerned with the risks associated with being unemployed again as a result of your company going under.
The thought that an employee would not love my firm as much as I do used to baffle and anger me, but I got used to the fact that nobody will ever care as much.
To mitigate any worries they may have, I recommend that you make a competitive offer (meaning offer more than what you think that individual is going to be given by another firm) and go higher rather than undercut the person in order to see whether they will negotiate – a move that can put you right back to square 1.
Conversely, don’t grossly overpay the person. It will stress you out, thus stressing them out, thus hindering their output for your company, thus serving as a waste of money and time training that individual.
Don’t Pitch Stock Options or Equity – The whole point of entrepreneurship is to own a successful company with a multitude of employees.
Thus, giving it away to your 1st employee sort of defeats all the work you’ve just completed to get to this stage.
Also, “entrepreneurs” call my office all the time asking if they can get away with not paying someone a base salary, but instead give them part of the company.
This is always followed by a hugely inflated worth of the person’s firm / idea. Not only do I intuit the inflation – any job seeker will as well.
Keep the relationship strictly “employer” and “employee” not “instant business partner.” You’re looking for someone to work at your company not someone to go to court with in the next few years.