Why Does Retention Matter More Than Rapid Hiring in Early-Stage Startups?

Here’s what most investors know but few founders say out loud:
Hiring fast won’t save your company. Keeping the right people might.

In episode 174 of the Provider’s Edge, we watched six women-led HealthTech companies pitch their innovations. The standout moments? They weren’t always product-related. They came when a founder could explain not only what they were building—but who was building it with them and why those people were staying.

Retention becomes a moat. Especially when:

• Your FDA pathway spans 2–3 years

• Your go-to-market hinges on clinical partnerships

• Your data validation relies on team continuity

One founder, Jessica (Triage360), emphasized how her team—built with EMS and clinical experts—stayed committed through multiple pivots. Their mission alignment was the real asset, not just their resumes.

In early HealthTech, every departure sets you back months, not weeks.

How Should Founders Structure Compensation to Retain Top Talent?

Smart founders don’t wait for Series A to define comp—they start early, and they evolve it as they grow. From what we saw in this episode, the best compensation plans weren’t just competitive—they were deliberate.

Here’s what that looks like:

1. Base + Milestone Equity
   👉 Founders like Nancy from Amphi-DX used her NIH-backed prototype milestones to build in performance-based equity. Her team knows that as they move toward FDA design lock, everyone’s slice grows based on real results.
2. Longevity Contracts
   👉 Tanu from FlowCare mentioned 3–5 year contracts with institutional buyers. That wasn’t just a product strategy—it was a hiring strategy. These revenue projections allowed her to justify early-stage hires and show how recurring revenue tied to stable payroll.
3. Mission-Aligned Hiring
   👉 Myheck from Myocurrent built her team based on shared experience. Their digital therapeutic for fibroid care wasn’t staffed with engineers chasing the next thing—it was built by people who had lived the problem. That’s a retention advantage you can’t buy.
4. Tiered Equity Bands
   Founders who want to keep equity dilution under control often adopt tiered bands: base equity upon hire, time-based vesting, and performance-based top-ups. If you’re pre-Series A, this also helps you avoid overpromising while incentivizing key hires.

Where Do Most Founders Go Wrong When It Comes to Hiring and Comp Planning?

Two common mistakes showed up in this pitch round:

1. Hiring Too Early Without Clarity
   Some founders hired sales or operations roles before they had clarity on reimbursement models or payer alignment. That’s premature—and expensive. If you can’t tie a hire to a clear value milestone (ARR, trials, partnerships), it’s not just a comp mistake—it’s a strategic risk.
2. Offering “We’ll Figure It Out Later” Equity
   Too many startups offer vague promises: “We’ll adjust your equity after our next round.” That’s not alignment. That’s a trust leak. Founders must define cap table scenarios early—because every fuzzy comp plan becomes a future morale issue.

Instead, the founders who won the most attention from judges were those who said:

• “We’ve budgeted for two new hires post-seed, and already defined the equity bands.”

• “Our contracts give us visibility for 5 years. That lets us staff for long-term delivery.”

• “We hired clinicians who have been through this experience personally—and they’re not leaving.”

That’s what investors want to hear.

Who Is Responsible for Creating a Compensation Philosophy in Startups?

The CEO. Period.

Even if you have an HR advisor, a fractional ops lead, or an investor giving advice, the responsibility to define, communicate, and evolve your compensation strategy falls on you as the founder.

And here’s why that matters:

Investors evaluate you as much as your business.
If you can’t clearly articulate:

• Who owns what (equity)

• Who’s being paid what (and why)

• How comp changes post-raise
  ...you appear unprepared, even if your product is brilliant.

Sabrina often says:

“The fastest way to erode trust with investors? Don’t know your cap table.”

The fastest way to lose your best people? The same answer.

When Should You Rethink Your Compensation Plan?

The right time is any time one of these 3 shifts happens:

1. You’re about to raise: Your use-of-funds should include clearly defined hiring plans tied to retention goals.

2. Your product evolves: Moving from prototype to pilot means hiring changes. The person who was great in R&D may not be right for commercial execution.

3. You’re expanding into regulated or multi-market environments: New regions or clinical requirements may require specialized hires with different comp structures.

In episode 174, Nancy shared that her company was closing a seed extension to finish bench studies. Her next hiring phase was already mapped:

• Tech optimization

• Regulatory affairs lead

• Commercial hire post-approval

That’s the kind of planning that earns investment—not just attention.

Should Compensation Be Public Inside a Startup Team?

Here’s the rule: Transparency builds trust. Vagueness breaks it.

That doesn’t mean you need to broadcast salaries. But it does mean your team should understand:

• Equity allocation principles

• How roles are leveled

• What performance triggers increases or bonuses

Tanu from FlowCare offered this clarity in her pitch. Their contracts with customers ensure predictable revenue. That revenue allows for consistent pay and retention. No surprises. Just structure.

In a startup, that’s gold.

What Did the Top HealthTech Founders Reveal About Hiring?

Each founder showcased a different approach to hiring—but what united them was clarity.

These founders didn’t just build tech—they built teams that last.

And for investors? 

That’s one of the best indicators that a company is ready to scale.

How Can Investors Spot a Startup With a Strong Retention Strategy?

Here’s what to look for beyond the pitch deck:

✅ A well-modeled hiring ramp
✅ Defined comp bands and equity logic
✅ Founders who’ve hired for outcomes, not optics
✅ Contracts or revenue tied to long-term roles
✅ Evidence of mission-aligned hires (especially in regulated care areas)

Ask founders questions like:

• “How will this hire impact your next clinical milestone?”

• “How long will your core team stay if your raise gets delayed?”

• “What happens to comp if you miss a goal?”

If the answers are vague, that’s your answer.

Here are 3 ways we can support you right now:

🎤Be a Featured Guest on the Provider’s Edge
Have traction and a story to share? Apply to join us on the show: PulsePointPath.com/Call-Sabrina

🎯 Get You In Front of Investors
We match you with the most aligned investors and decision-makers who care about your niche already. Apply at PulsePointPath.com/Pitch-Application 

About Sabrina Runbeck
Sabrina Runbeck, MPH, MHS, PA-C helps healthcare technology companies scale sustainably—without burning out their teams or running out of cash. She is the Co-Founder of PulsePoint Path and works alongside a 12-integrated board of advisors to help founders make strategic decisions that multiply impact and protect capital. Her signature 5D Integrated System helps companies move beyond one-dimensional problem solving—what they think the issue is—and instead, builds an Empowered Ecosystem across leadership, team dynamics, and systems alignment. This is how founders evolve from early traction to 10x growth. Sabrina is also a TEDx speaker, former Cardiothoracic Surgery PA, and trusted advisor with over 15 years of experience in public health, neuroscience, and business acceleration.

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