Your first technical hire: CTO, lead engineer, or nobody yet?

There is a moment, usually somewhere between your first paying customer and your first term sheet, when you decide you need "a technical person". What happens next tends to be decided by vanity rather than need. The investor deck has a slot marked CTO. The founder fills it. Nobody asks what the company actually needs someone to do for the next eighteen months.

Here is the uncomfortable arithmetic. A hired CTO at seed typically lands 1–5% of the company; a co-founder joining pre-product can be 20–50%. Those are wildly different bets, and the word on the business card does not tell you which one you are making. Nor does it tell you whether the person can actually ship the thing you need shipped this quarter — which, at your stage, is almost the entire job.

The good news is that this is a decision with a clear structure. Stage tells you which role you need. Need tells you which title is honest. Title tells you what equity is sane. And there are interview signals a non-technical founder can genuinely read, without pretending to assess code. Work it in that order and the decision stops being a gamble.

Before product-market fit, you need a builder, not a boss

A CTO's job is a leadership job: hiring, architecture at scale, security posture, vendor strategy, roadmap negotiation with a board. Almost none of that exists at pre-seed. A first hire whose real job is management will spend their first year managing themselves.

The pattern is reliable. Pre-seed, the constraint is throughput and learning speed, which is a builder's job. At seed, with the first two or three engineers arriving, someone has to decide how things are built and review other people's work — a lead engineer's job, and sometimes a CTO's. By Series A, with a team, real customers and real diligence, the leadership work is a full-time job in its own right. That is when a CTO is unambiguously a role rather than a title.

The title is the one thing you can't demote later

Founders treat the title as a free lever — a bit of extra shine that helps close the candidate. It is not free, for one structural reason: a title is the only part of an offer you cannot quietly revise. Salary gets revisited at every raise, scope gets reshaped every quarter, but taking "CTO" off somebody's business card is a demotion and a resignation event. So when the company outgrows the person — the normal, blameless outcome of hiring a brilliant builder into a leadership title — you can either carry them in a job they have outgrown and watch the engineering function stall, or hire a real CTO above them and watch someone you rate walk out with institutional knowledge nobody wrote down.

The cost is not theoretical. Replacing a mid-level technical or managerial employee runs at roughly 100–150% of their annual salary on SHRM's benchmarks, and executive-level replacement at 200% or more. Against a London lead engineer averaging around £95,000, that is roughly £100,000–£140,000 to unwind the decision, before the months of stalled roadmap that are usually the more painful half. "Founding Engineer" and "Lead Engineer" cost you nothing, are well respected in the London market, and leave you somewhere to promote someone to.

Co-founder, employee, or fractional cover: three different problems

These get discussed as three prices for the same thing. They are not. A technical co-founder solves the risk-sharing problem: someone who will work through the unfunded, uncertain stretch because they own a meaningful slice of the outcome. An employee solves the throughput problem, and is the boring, correct answer for most funded seed companies — founders skip it because it feels less impressive than acquiring a co-founder. Part-time senior cover, the fractional CTO model, solves the judgement problem: someone to sanity-check the architecture, interview the engineers and answer "is this normal?" It buys oversight, not delivery capacity, so if nothing is getting built, part-time seniority will not fix it. The failure mode is picking the structure that flatters the company rather than the one that matches the constraint.

Equity should price the risk, not the label

The median first hire gets around 1.5% of the company, fully diluted, on a four-year vest with a one-year cliff — and it falls fast, to around 0.33% by roughly the fifth hire. A CTO hired into a seed-stage company with traction typically lands in the 1–5% range. A co-founder joining pre-product, unpaid or barely paid, taking the same downside as you, is in an entirely different bracket at 20–50%, and should be on reverse vesting exactly as you are. Those are not adjacent numbers, and the gap is the point: they price completely different amounts of risk. Which is why the co-founder-versus-employee question has to be settled before the equity conversation rather than during it.

On cash, a Lead Software Engineer in London averages around £95,000 base, typically £76,000 to £123,000. A pre-seed startup will usually sit below that and make up the difference in equity — a defensible trade, as long as you are straight about it rather than pretending the discount is a perk.

You can't assess code — you can assess reasoning

You are not going to judge their code, and you should not try. But the qualities that determine whether this hire works are ones you are well placed to judge. Can they explain a past technical decision, including what it cost them, in language you understand? Strong engineers give you the trade-off — what they gained, what they gave up, what they would do differently. If you cannot follow the explanation, that is data about them, not about you.

Do they ask about your customers and constraints before naming technologies? Can they take a feature you describe and come back with a clarifying question, a rough range and an explicit trade-off rather than a confident single number? Are they honest about what they have not done — because certainty about everything is a red flag, not a green one. And then stop interviewing and start working: a paid trial on a small, real piece of your backlog tells you more than any number of conversations, and gives the candidate the same information about you.

The playbook

1. 1
   Write the twelve-month job, not the title.

   Run the test above before you speak to a single candidate. It is the only step that changes every decision after it.

2. 2
   Separate the three options on paper.

   A co-founder shares the risk, an employee buys throughput, fractional cover buys senior judgement without a full-time seat. Write down which problem is actually keeping you up at night before you start talking to people.

3. 3
   Set the equity band before the first conversation.

   Anchor to market — roughly 1.5% for a first hire, 1–5% for a hired seed CTO, a much larger bracket for genuine founder risk — then hold the band. Negotiating equity live, against a candidate you like, is how founders give away several percent by accident.

4. 4
   Put a cliff and vesting on everything, including co-founders.

   Four-year vest, one-year cliff, reverse vesting for founders. This is not distrust; it is the mechanism that lets you part ways in month seven without losing a quarter of your cap table. Retrofitting it is a horrible conversation.

5. 5
   Run a paid trial on real work.

   Two days, real backlog, real payment, real deadline. You will learn more about communication, judgement and pace than from four interviews — and so will they, which is how you avoid the hire who leaves in month five.

Hire for the job you have this year, not for the org chart you hope to have in three. Everything else in the offer can be renegotiated later. The title cannot.