Build Mode: Compensation, culture, and cap tables with Yuri Sagalov, GeneralCatalyst

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News, Business, Entrepreneurship, Business News, Technology

4.2 • 372 Ratings

🗓️ 21 February 2026

⏱️ 43 minutes

🔗️ Recording | iTunes | RSS

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Summary

TechCrunch's founder-focused podcast, Build Mode, is back. This season we’re breaking down what it really takes to build a world-class founding team starting with your cap table, equity structures, and startup compensation strategy. We kick off with Yuri Sagalov, managing director at General Catalyst and former founder, YC partner, and seed investor at Wayfinder Ventures. Yuri has worked with hundreds of pre-seed and seed-stage startups, and he shares practical advice on how early-stage founders should think about startup equity, cap table design, investor selection, and compensation structures from day one. He breaks down: The 3 types of investors (and which one to avoid) Why your cap table is part of your team The 20–25% seed dilution rule How to split equity with a co-founder How to talk to early employees about risk and compensation No matter where you are in your startup journey, this episode will help you get the incentive structure right from the beginning. Chapters: 00:00 - Why your first hires deserve more equity 00:31 - Meet Yuri Sagalov (YC → General Catalyst) 02:12 - Your cap table is part of your team 02:50 - The 3 types of investors (avoid this one) 05:02 - How to split equity with a co-founder 07:55 - How much equity to give early employees 09:37 - How to talk compensation and risk 12:31 - Red flags in formation docs and vesting 18:27 - Advisors for equity? Usually a mistake 20:05 - The 20–25% seed dilution rule 26:03 - The shift to 10-year stock options 34:11 - Don’t scale before product-market fit 39:23 - Final advice: Just start and choose your co-founder carefully New episodes of Build Mode drop every Thursday. Hosted by Isabelle Johannessen. Produced and edited by Maggie Nye. Audience development led by Morgan Little. Special thanks to the Foundry and Cheddar video teams. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	The thing that I usually advise the founders is also just like be more generous with your first
0:05.3	two, three hires. And the first two, three hires that you have will set the culture of the company.
0:11.7	And so to me, I think that A, you should be very slow to hire those people because they will set
0:16.5	the tone for the business. And B, ideally, you want them to stay with you all the way to IPO and beyond.
0:21.5	And so the same thing. You really want them to feel incentivized and you want them to feel like
0:25.3	they got treated fairly and that if everyone, you know, everyone gets rich together as the business
0:30.5	gets successful. That's Yuri Sagalov, managing director at General Catalyst, where he leads
0:35.8	the firm's seed investment strategy in the United States. Before General Catalyst, where he leads the firm's seed investment strategy
0:37.6	in the United States. Before General Catalyst, he was a partner at Y Combinator. He's worked
0:43.2	with hundreds of early stage startups, and today, we're digging into how founders can build
0:48.4	a cap table that functions as an extension of your team. Yuri also gives some solid advice
0:54.1	on how founders can strategically build their compensation structures.
0:57.8	Welcome back to Build Mode.
0:59.0	I'm your host, Isabel Johanison, and this is the season all about building your team.
1:04.3	Hi, Yuri, welcome to Build Mode.
1:05.9	Hi, thank you for having me.
1:07.0	Yeah, we're excited to have you today.
1:08.3	You have sort of been in the epicenter of the Silicon Valley investment scene for a long time, from Y Combinator to Wayfinder Ventures to now the managing partner at General Catalyst. Can you just give a little bit of, you know, an intro of yourself and, you know, what you're working on a General Catalyst these days? Sure. So I joined GC about a year ago and I helped lead all of
1:28.7	our early stage seed investing in the U.S. and kind of focus on the seat strategy globally as well.
1:33.5	Before GC, I had my own seat fund, a hallway finder. I ran it for about five years. Before that, I spent
1:39.4	about five years at YC and I was there as a partner. And then before that, I actually started my career as an engineer.
1:46.5	I was in grad school in Toronto. I ended up dropping out of grad school to start a company about 16
	...

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