Building a hiring plan for your next fundraise

What is a hiring plan?

A hiring plan is a strategic document that outlines your company’s hiring needs over a specific period. More than a human resources checklist, a hiring plan is a detailed roadmap that translates your business goals into a tangible recruitment plan. It is the key output of your strategic workforce planning and the foundation of your entire recruitment strategy. It specifies which roles you need to fill, when you need to hire them, and the budget required to bring them on board, which is information that may be subject to pay transparency laws.

While a hiring plan has traditionally covered the next twelve to eighteen months, recent market shifts mean you’ll likely need a much longer runway, especially when you consider that there are over 1,500 active unicorns globally, many of which require multi-year staffing roadmaps.

This plan is also a core part of your fundraising narrative and a key component of your pitch deck. It shows investors that you have a clear plan for how you’ll deploy their capital to build the team that will execute your vision and hit critical milestones.

As of the second quarter of 2024, the median time between a seed and Series A round grew to 712 days, or nearly two years. For later stages, the interval is even longer, with the median time between a Series B and Series C round increasing to 856 days, which is over 28 months. These extended fundraising timelines require founders to plan for longer periods between funding rounds.

Why you need an investor-ready hiring plan

Moving from the "what" to the "why" is simple: In today’s tough funding environment, investors view your hiring plan as a powerful signal of operational maturity, especially since data shows that leaner teams are more successful at fundraising. For instance, startups that closed seed funding in the first half of 2024 had an average of just 5.3 employees, down from 6.9 in the first half of 2021.

At most stages, successful fundraising teams have been smaller. It shows you’ve graduated from reactive, chaotic hiring to strategically planning for scale, which is critical when data shows that successful but lean startup teams average just four employees at their founding. This discipline de-risks their investment in your company and gives you a significant advantage when you’re asking for capital.

A detailed plan is non-negotiable for your fundraise for a few key reasons.

• Builds investor confidence: A detailed plan demonstrates foresight and operational discipline. It proves you're building a strong employer brand focused on long-term employee retention and hiring for cultural fit. This builds an immense amount of trust and credibility, showing investors you are a responsible steward of their capital.

• Justifies your valuation: Your plan connects the dots between the money you’re raising and the team you’ll build to hit the milestones that support your valuation. It makes your financial projections believable because you can show exactly who will be doing the work (and how your data-driven compensation strategy supports them) to achieve those revenue targets or product launches. It’s the most important part of your "use of proceeds" story.

• Manages your equity strategically: A hiring plan forces you to think critically about your employee option pool and dilution. This helps you use your company’s equity compensation as a powerful incentive to attract top talent.

This last point is directly tied to your cap table and highlights the importance of proper cap table management. A cap table is the official ledger of who owns what in your company, and its principles apply across different business structures, including the specific requirements for equity management for LLCs. Every new hire who receives employee equity changes this ownership structure, and a hiring plan helps you manage these changes with intention, not as an afterthought.

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How to build your hiring plan

You should build a strong hiring plan, and the compensation plan that supports it, on the foundation of your business goals and financial model. It’s a logical exercise in turning your hiring strategy into a list of necessary roles. We'll walk you through how to create a plan that will stand up to investor scrutiny and serve as a practical guide for your company's growth.

Step 1: Align headcount with your business goals

Start with your pitch deck and your financial model, grounding your plan in core business dynamics and data. Your business goals are the "why" behind every hire. Map your key milestones for the next eighteen months (like a product launch, a revenue target, or a user growth goal) to the specific roles required to achieve them. If your goal is to double your annual recurring revenue (ARR), you’ll likely need more sales and marketing staff.

Next, perform a simple skills gap analysis. This process, which can be formalized through a job leveling framework, involves making two lists: one with the skills and core competencies your current team members possess, and another with the skills needed to hit your next set of goals. The gaps between these two lists represent your future hires. This process makes sure every new role in your headcount plan is justified as a strategic necessity, not just a "nice-to-have."

Step 2: Define roles and responsibilities

For each planned hire, create a clear, outcome-oriented job description that will eventually inform the offer letter. Instead of just listing tasks, focus on what you expect the person in that role to achieve in their first six to twelve months. This shifts the focus from activity to impact. This clarity also helps you assign a standardized level to the role, which is the foundation for determining a competitive compensation package.

For example, a "Marketing Manager" shouldn’t just "manage social media." Their goal should be something like "Increase qualified inbound leads by 50% within nine months." This level of clarity is important for two reasons. First, it helps you attract the right talent and filter for the most qualified candidates, ensuring the best candidates are motivated by your mission. Second, it shows investors that each role has a defined purpose and a measurable return on investment, making your plan much more compelling.

Step 3: Create a hiring budget and timeline

Now it's time to attach numbers to your plan. You need to forecast the total cost for each new hire, which includes much more than just their base salary. You must account for bonuses (a form of variable compensation), benefits, and payroll taxes. This total employee compensation figure feeds directly into your company's burn rate and financial projections, so accuracy is key.

Your budget should also reflect your strategy for active sourcing and any bonus programs for employee referrals, recruiter fees, applicant tracking systems, and software licenses.

Guessing at salaries can undermine your entire financial model; establishing clear salary bands is a much more strategic approach. You need data from companies at your stage and size, a process known as salary benchmarking, to make competitive offers without overspending.

Using a platform for total compensation management like Carta Total Compensation allows you to benchmark against real-world, private market data, making your hiring budget more accurate and defensible to investors. Beyond just salaries, Total Compensation also provides benchmarks for option pool size and annual equity burn rate, offering a more comprehensive and defensible compensation strategy aligned with your long-term business goals.

Step 4: Model the impact on your cap table

As a founder, you should be thinking about dilution constantly, as it directly impacts the value of your private company equity. Dilution is the reduction in ownership percentage for existing shareholders that happens when new shares are issued under regulations like Rule 701, such as when you grant equity to new employees. Your hiring plan is the primary driver of your employee option pool, so you must plan for its impact on your cap table.

Think of your company's ownership as a pizza. Every time you issue new shares to an employee, you’re not cutting existing slices smaller; you’re adding a new slice, which makes the whole pizza bigger but reduces the percentage that each original slice represents.

This is where spreadsheets become dangerous. A small formula error can lead to significant miscalculations about ownership, and this complexity creates real-world consequences for employees. For instance, a 2022 survey found that 13% of employees with stock options didn’t exercise them simply because they were afraid of making a mistake or mistakenly believed they already owned the shares.

Instead, you can use equity management software with a tool like Carta Scenario Modeling to see the exact dilutive impact of your hiring plan. You can model an increase in your option pool and see how it affects every shareholder, including yourself, before you commit. This replaces confusing spreadsheet chaos with professional-grade foresight and control.

To set the strike price for these new options, you’ll need an up-to-date 409A valuation. This is an independent appraisal of your company's fair market value and is a critical compliance step that must be able to withstand a valuations audit that investors expect to see handled professionally. Platforms like Carta provide these audit-ready valuations directly from your cap table data, which helps you stay compliant.

Step 5: Assemble your hiring team

Hiring isn’t a solo sport, even in an early-stage startup. You need to define who is responsible for what in the hiring process. This team usually includes:

• In a startup’s early days, the founder or CEO must act as the "Chief Recruiting Officer," a reality underscored by data showing that, on average, companies don’t bring on their first HR professional until they reach 22 employees. This means the founder is personally responsible for setting the vision, defining the company culture, and closing all the key hires who form the company’s foundation.

• The finance or operations lead, who is the "guardian of the burn rate," owns the budget (which includes everything from new hire salaries to executive compensation) and makes sure the plan is financially sound.

• Early team leads, often part of the founding team, will become the first hiring managers and are best equipped to assess technical or role-specific skills.

Before you post a single job, it’s critical that all stakeholders in the recruitment process are aligned. Everyone must agree on the hiring plan, the budget, the strategic importance of each role, and who makes final hiring decisions. This prevents internal friction and helps you present a united, professional front to your ideal candidates. This will strengthen your compensation philosophy, which should be guided by real-time market data and is important for successful talent acquisition.

Bring your hiring plan to life: From spreadsheet to strategy

Once you’ve outlined your business goals and the roles needed to achieve them, you can bring all the pieces together in Carta. Instead of managing disconnected spreadsheets for your headcount plan, budget, and cap table, you can streamline your entire process.

With a Carta cap table, you can create a new hiring plan and enter the role, level, and target start date for each planned hire. From there, you can connect your plan to compensation data.

• If you use Carta Total Compensation, the platform will provide data-driven recommendations for salary and equity based on thousands of real-time benchmarks from other private companies.

• If you only use cap table management, you can enter your own cash and equity compensation targets for each role.

Finally, you can see how your hiring plan will impact your equity pool. The plan automatically syncs with your cap table, modeling the effect of new hires on your option pool availability and overall dilution. This allows you to proactively optimize your plan to ensure you have enough equity to attract the talent you need for your entire runway.

How to use your hiring plan

Your hiring plan is a living document. It should be a tool you use actively to guide recruitment efforts, manage your budget, and track progress against goals using key metrics like time to hire and quality of hire. Reviewing these numbers quarterly with your leadership team, often as part of your regular board deck, will help inform your hiring initiatives.

When you’re in the fundraising process, you should present your hiring plan to investors during due diligence. It should be a clean, clear appendix to your financial model that tells a compelling story of how you’ll build a world-class team with their investment.

This is where a platform like Carta becomes the place your plan becomes reality. As you make hires, you can use it to issue electronic securities, manage stock vesting schedules, and keep your cap table automatically updated. This makes sure your single source of truth is always accurate and ready for investor review, from your first hire all the way to achieving IPO readiness.

To build your plan with the most accurate compensation data and create competitive offers, request a demo.

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Frequently asked questions about hiring plans

How does my hiring plan affect my cap table and dilution?

Your hiring plan directly determines the size of your employee option pool. Expanding the pool to issue new equity dilutes the ownership percentage of all existing shareholders. A thoughtful plan helps you forecast when you’ll need to increase the pool and manage that dilution proactively, so there are no surprises.

How far out should my hiring plan forecast for a seed vs. a Series A round?

A seed-stage plan should typically forecast for the next twelve to eighteen months, aligning with your runway from that round. A Series A plan may be more detailed for the first year and higher-level for the second, reflecting a longer runway, more established growth trajectory, and a clearer path toward potential exit strategies.

What's the best way to communicate my hiring plan to potential investors?

Present it as a simple, one-page summary that lists key roles, the quarter they will be hired, their department, and the business goal they support. Most importantly, you need to make sure the hiring budget in your plan aligns with your financial model.

Should my employee option pool be part of my hiring plan?

Yes, absolutely. Your hiring plan is what determines the necessary size of your option pool. You must plan for who you need to hire before you can realistically and accurately allocate the right amount of equity for them in your stock option plan by benchmarking against companies of a similar stage and size.