PEOPLE & OPERATIONS

U.S. employment law is different from Europe. Do it right from the first hire.

Hiring your first U.S. employee is different than Europe. At-will employment, expensive benefits, stock options, H-1B visas—it's a new game. We help you navigate employment law, set competitive compensation, and build your team without legal or HR surprises.

THE PROBLEM

Most DACH Founders Make Expensive First-Hire Mistakes

EOR vs. direct hire confusion. You want to hire someone but don't understand the trade-off. EOR (Deel, Remote) is fast (1 week) and simple (€0 setup), but costs 10-12% of salary ongoing. Direct hire takes 2-4 weeks, costs €4K-6K setup, but costs only 4-6% of salary ongoing. On a €100K hire over 2 years, EOR costs €24K. Direct hire costs €12K. You pick the wrong model and overpay.

Compensation below market. You offer a San Francisco engineer €80K (Berlin rates). They laugh. Market is €180K-220K. You lose the hire and waste 2 months recruiting. Or you overpay because you don't know market rates. Proper benchmarking prevents both mistakes.

No employment infrastructure. You verbally offer a job with no written contract, no benefits, no handbook, no IP assignment. 3 months later, the employee underperforms. You fire them. They sue for wrongful termination. You have no documentation to defend yourself. Cost to defend: €20K-50K.

65% of DACH founders make their first U.S. hire the wrong way

Average cost of wrong model: €10K-20K overpaid in first 12 months

Average legal liability from missing documentation: €20K-50K

Market compensation variance: €80K vs. €220K (175% difference)

WHAT WE COVER

Employment Model, Compensation, Benefits, and Legal Infrastructure

Employment model selection. EOR (Deel, Remote, Oyster): Fast (1 week), simple, €0 setup. Cost: 10-12% of salary. Best for: first 1-2 hires, testing roles. PEO (co-employment): 2-3 weeks, €4-6% of salary, more control. Best for: 3-10 people. Direct hire: 2-4 weeks, €4-6K setup, €4-6% of salary ongoing. Best for: core team, equity control.

Compensation benchmarking. We research market rates on Levels.fyi, Blind, Glassdoor. San Francisco software engineer (mid-level): €160K-200K. You get clear comp band, benefits, and equity offer for your role and location.

Benefits & payroll setup. If direct hire: set up health insurance (€500-1,500/month per employee, employer pays 60-80%), 401k (employer matches 3-6%), and payroll (€100-300/month or 2-4% of payroll). Total benefits cost: 25-35% of salary.

Employment contracts & IP assignment. Offer letter, employment handbook, IP assignment agreement, NDA, stock option agreement. These are non-negotiable for any formal hire.

Stock options & equity. If granting equity: board approves stock option plan, 409A valuation completed (€1,500-3,000), equity grants documented with 4-year/1-year cliff vesting.

Visa sponsorship planning. If hiring non-U.S. citizens: H-1B (6+ months, €5K-8K, lottery-based), O-1 (2-4 months, €3K-5K, for accomplished people), L-1 (1-3 months, €2K-4K, requires parent company employment).

Employment model selected (EOR, PEO, or direct hire) with cost analysis

Compensation benchmarked for role and location

Benefits plan designed (health, 401k, other)

Offer letter, handbook, IP assignment agreement ready

409A valuation completed (if granting equity)

Visa sponsorship plan documented (if needed)

BEFORE VS AFTER

From Ad-Hoc Hiring to Professional Infrastructure

Before: Verbal offer, no contract, benefits promised "later," no IP assignment, equity not documented. You're exposed to legal risk and paying above market because you didn't benchmark.

After: Written offer letter, employment handbook signed, IP assignment in place, stock options documented, compensation benchmarked, benefits configured, payroll live. You're professional, protected, and competitive.

Before: Verbal offer → After: Formal offer letter with all terms documented

Before: Market rate unknown (€80K-220K range) → After: Benchmarked and competitive

Before: IP ownership unclear → After: Company owns all employee-created IP

Before: Benefits vague → After: Professional plan with coverage documented

Before: At-will employment misunderstood → After: Documented, compliant process

Before: No equity documentation → After: Stock option plan with vesting schedule

WHY IT MATTERS

The Hiring and Team Impact

Right Model = €10K-20K Savings/Year

Choose direct hire over EOR after 3-4 hires. On €300K in total salary, you save €10K-20K annually in employment costs. That's one extra hire's salary.

Benchmarked Compensation = Better Hiring

Competitive compensation attracts talent. Transparent process reduces time-to-hire by 3-4 weeks. Better hire quality improves your product and unit economics.

Legal Protection = Risk Eliminated

Proper contracts eliminate wrongful termination disputes (cost: €20K-50K). IP assignment prevents ownership disputes (cost: €0-€100K). Documentation is insurance.

Repeatable Hiring = Scalable Team

Once you nail your first hire, the process is documented and repeatable. Second, third, and tenth hires are smooth. You scale without chaos.

HOW IT WORKS

From Planning to First Productive Hire in 12 Weeks

Planning & Model Selection (Weeks 1-2)

Define hiring plan (roles, timeline, budget). Benchmark compensation. Choose employment model (EOR, PEO, or direct hire). Clarify trade-offs and costs.

Infrastructure Setup (Weeks 3-6)

If EOR: sign up with Deel/Remote (15 minutes). If direct: set up payroll, health insurance, 401k, stock option plan, 409A valuation, employment documents.

Recruiting & Hiring (Weeks 4-12)

Post jobs on LinkedIn/AngelList. Screen and interview candidates (4-8 weeks typical). Negotiate and close offer. Plan visa sponsorship if needed.

Onboarding & Launch (Weeks 12+)

Equipment and systems ready. First day: welcome, training, 1-on-1s, 30/60/90 day goals. Monthly 1-on-1s, quarterly feedback. Performance documented annually.

COMMON QUESTIONS

HR & Employment FAQ

EOR or direct hire for the first employee?

EOR if unsure about role or commitment (test before committing). Direct hire if role is core to business, you want equity control, or hiring multiple people. Hybrid: EOR for first 2 hires, then direct hire when team grows.

How do I know the right salary for a role?

Check Levels.fyi (crowdsourced tech comp), Blind (anonymous reports), Glassdoor (public reviews). SF software engineer (mid): €160K-210K. SF product manager: €140K-200K. SF sales: €80K base + 50-150% commission. Adjust for location and seniority.

Do we have to offer benefits?

Legally: depends on state and size. Practically: yes, for competitive hiring. Cost: €30K-40K per employee per year (health, 401k, dental, vision). Without benefits, you can't attract talent.

Can we give stock options to early employees?

Yes, and you should. Aligns incentives, retains talent (vesting over 4 years), costs nothing upfront. Require: 409A valuation (€1,500-3,000), board approval, stock option agreement, vesting schedule.

What's at-will employment?

Either party can end employment anytime with or without cause. Exception: can't fire for illegal reasons (discrimination, retaliation). You can fire for bad performance, personality conflict, or poor fit. But you need documentation (performance reviews, feedback).

How much does hiring cost in total?

Per hire: €11K-35K first year. Breakdown: setup (€1K-4K one-time), recruiting (€0-30K depending on recruiter), salary (€80K-250K+), benefits (€20K-40K), taxes/admin (€15K-25K). ROI: if they generate €500K revenue in first year, payback is 1-2 months.

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