Dear SaaStr: How Do You Draw The Line Between Founder and First Employee?

Summary

The piece advises that the line between founder and first employee should be drawn by timing and commitment: founders are present before a name, product, code or funds, take essentially all the risk and work for little to no salary. If an early hire was there at that pre-launch stage, worked for minimal cash and demonstrated full commitment, they should be considered a co-founder or at least a “co-founding” employee. This distinction matters for equity, incentives and long-term governance, since mislabeling can breed disputes and misalign incentives as the company scales.