A practical guide to hiring, motivating and retaining talent in a tech startup

The transition from solo entrepreneur to team is one of the most critical moments in the development of any startup. The first 10 people you hire will determine the culture, growth rate, and chances of success of your company.

In Bulgaria, the challenge is even greater – competition for IT talent is fierce, salaries are rising rapidly, and large international companies offer conditions that startups can hardly compete with. But there is good news – the right approach, clear vision, and strong culture can attract great people even with a limited budget.

When is the time for the first employee?

Clear signals that it's time:

1. You turn down business opportunities

You cannot take on new clients.
You are postponing important functionalities
You are losing market share due to slow development

2. Founders work 60+ hours a week for more than a month

Constantly shifting priorities
Lack of time for strategic thinking
Early signs of burnout

3. You have predictable income for 6+ months

Repeat customers
Signed contracts
Clear revenue model

4. Specific expertise is lacking

Senior architecture developer needed
Lack of sales skills
There is no one to lead marketing

Financial readiness calculator

Real cost per employee in Bulgaria (2025):

For a developer with 2-3 years of experience:

Gross salary: 3,500 BGN
Employer insurance: 630 BGN (18%)
Paid leave: 292 BGN (1/12)
Bonuses and training: 300 BGN
Equipment (depreciation): 150 BGN
Office/software: 200 BGN
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Total monthly expense: 5,072 BGN
Annual expense: 60,864 BGN

Rule: Have financial resources for at least 6 months of expenses in the bank before the first rental.

Where to look for talent in Bulgaria

For technical positions:

1. DEV.BG

The largest technical community
Free ads for startups
Access to 50,000+ developers

2. University partnerships

FMI (SU) – strong mathematical preparation
Technical University – engineering approach
NBU, UNWE – business-oriented programmers

How to work with universities:

Guest lectures (visibility among students)
Hackathons and competitions
Paid internships (1,000-1,500 BGN/month)
Graduation projects in your company

3. Communities and Events

React Sofia, Angular Sofia – specialized groups
HackConf, DevReach – annual conferences
Facebook Technology Groups

4. Recommendations from the network

Referral bonus: 500-2,000 BGN
Higher success rate (40% vs 15%)
Better cultural fit

For business positions:

1. LinkedIn

Direct search (Boolean search)
InMail messages with a specific offer
Participation in group discussions

2. Specialized platforms

Jobs.bg – mass positions
Zaplata.bg – focus on startups
AngelList – internationally oriented candidates

Hiring process – step by step

Phase 1: Preparation (1 week)

Create a clear job description:

Position: Full-stack Developer

What you will do:
- Development of new functionalities (60%)
- Support and optimization (20%)
- Code review and mentoring (20%)

What we are looking for:
- 2+ years of experience with React and Node.js
- Experience with PostgreSQL or MongoDB
- Desire to learn and develop

What we offer:
- Salary: 3,000-4,500 BGN (depending on experience)
- Flexible working hours
- Training budget: 2,000 BGN/year
- Option for shares after 1 year

Phase 2: Attract (1-2 weeks)

An ad that stands out:

Instead of: "We are looking for a programmer" Write: "Come and build the next Bulgarian unicorn together"

Elements of a good ad:

A specific vision and mission
Technology stack
Challenges, not obligations
Pay transparency
Culture and values

Phase 3: Screening (2-3 days)

15-minute phone call:

Key questions:

“Why are you looking for a new job?” – motivation
"What project has brought you the most satisfaction?" - passion
"Where do you see yourself in 2 years?" - ambitions
"What are your salary expectations?" - budget

Red flags:

Focus only on money
Negativity towards previous employers
Lack of specific examples
Unrealistic expectations

Phase 4: Technical Assessment (3-5 days)

Testing options:

1. Homework (recommended for startups)

A real task from your job
2-4 hours of execution time
Pay it! (200-400 BGN)
Value the approach, not the perfection

Example task: "Create a REST API for a todo application with authentication. Use the technologies you feel comfortable with. Document your decisions."

2. Pair programming session

1-2 hours of collaborative work
Real bug or feature
You value communication and thinking.

3. View portfolio

GitHub profile
Personal projects
Contribution to open source

Phase 5: Cultural Interview (1-2 hours)

Structure of the final interview:

Company presentation (15 min)
- Vision and mission
- Current challenges
- Plan for the next 12 months
Behavioral issues (30 min)
- "Tell me about the hardest bug you've solved"
- "How did you work in a team under pressure?"
- "Describe a situation in which you disagreed with a colleague"
Values and culture (30 min)
- Preferred work style
- Attitude towards feedback
- Work-life balance
Questions from the candidate (30 min)
- Good candidates ask a lot of questions
- Honest answers, including about challenges
Next steps (15 min)
- Clear timeframe
- Who will be contacted and when?

Phase 6: Offer and negotiation (2-3 days)

Offer structure:

Base salary: 3,500 BGN gross
Bonus (on targets): 10-20%
Options/shares: 0.1-1% after cliff period
Benefits:
- Sports card (100 BGN/month)
- Training budget
- Flexible working hours
- Possibility of remote work 2 days/week

Negotiation tactics:

Be transparent about the budget
Offer non-monetary benefits
Show a path for development
Give 48 hours for a decision

Onboarding – the first 30 days

Day 1: Welcome

[ ] Prepared workplace
[ ] Laptop with installed software
[ ] Access systems
[ ] Welcome pack (t-shirt, mug, pen)
[ ] Lunch with the team

Week 1: Orientation

[ ] Product Introduction
[ ] Meeting with each team member
[ ] First small task
[ ] Daily standup participation
[ ] Documentation and processes

Week 2-3: First contribution

[ ] Real task with a mentor
[ ] Code review process
[ ] First commit in production
[ ] Feedback session

Week 4: Integration

[ ] Independent task
[ ] Participation in planning
[ ] 30-day review
[ ] Plan for the next 60 days

Compensation and benefits for startups

Creative ways to compete with corporations:

1. Equity compensation

ESOP (Employee Stock Option Plan):

10-20% from the company for employees
4 years vesting, 1 year cliff
Strike price: nominal value

Example structure:

CTO/Co-Founder: 5-10%
First Employee: 1-2%
Employees 2-5: 0.5-1%
Employees 6-10: 0.25-0.5%
After 10: 0.1-0.25%

2. Flexibility and autonomy

Unlimited paid leave (with responsibility)
Work from home/abroad
Equipment selection
Flexible working hours

3. Development and training

Conference budget: 3,000 BGN/year
Paid certifications
Internal tech talks
Mentoring from senior colleagues

4. Unique benefits

"Project Friday" - 20% time for personal projects
Sabbatical after 3 years
Covered costs for coworking space
Gaming setup in the office

Tax optimization of privileges:

Tax-free up to a certain amount:

Food vouchers: up to 200 BGN/month
Life insurance: up to 60 BGN/month
Transportation costs: real costs
Training: job-related

Building a culture from day 1

Main elements:

1. Values (maximum 5)

Example:

Transparency – we share everything, including mistakes
Ownership – everyone is responsible
Growth – we are constantly learning
Balance – work is a marathon, not a sprint
Entertainment – we are serious about work, not about ourselves

2. Rituals and traditions

Daily stand-up – 15 minutes, every day
Demo Friday – we show what we have built
Monthly 1-on-1 – individual conversations
Quarterly offsite – out-of-office planning
Failure party – we celebrate mistakes too

3. Communication

Tools:

Slack/Discord – daily communication
Notion – documentation and wiki
Linear/Jira – task management
Loom – asynchronous video communication

Rules:

Response within 24 hours to messages
Cameras on during meetings
Document decisions
Default to transparency

Managing remote/hybrid teams:

Challenges and solutions:

Insulation → Virtual coffee breaks, team building
Communication → Over-communicate, record meetings
Time zones → Core hours (10am-3pm Bulgarian time)
Productivity → Focus on results, not hours
Culture → Monthly physical meetings

Performance management

Feedback system:

Continuous Performance Management:

Weekly 1-on-1 (30 minutes)
Monthly goals and review
Quarterly performance reviews
Annual assessment and planning

Assessment Framework:

Technical Skills (25%)
- Code Quality
- Problem Solving
- Technical Growth

Execution (25%)
- On-Time Delivery
- Independence
- Reliability

Collaboration (25%)
- Communication
- Teamwork
- Mentoring

Innovation (25%)
- New Ideas
- Improvements
- Learning

Difficult conversations:

When things don't go well:

Document the problem
- Specific examples
- Impact on the team
- Previous conversations
Performance Improvement Plan (PIP)
- 30-60 days
- Clear expectations
- Weekly check-in
- Support and resources
Termination (if necessary)
- Follow CT strictly
- Document everything
- Exit interview
- Help for next job

Talent retention

Top reasons people leave:

Lack of development (35%)
Bad management (30%)
Better offer (20%)
Lack of recognition (10%)
Working environment (5%)

Retention strategies:

1. Career development

Individual Development Plan (IDP):

Current position: Mid Developer
Target position: Senior Developer
Time frame: 12-18 months

Gaps:
- System design experience
- Mentoring skills
- Domain expertise

Actions:
- New project lead
- Junior mentor
- Architecture course

2. Recognition and awards

Public praise in Slack
"Employee of the Month" (non-monetary)
Peer-to-peer bonuses
Sharing successes with investors

3. Transparency

Share the finances (runway, burn rate)
Involve in strategic decisions
Open Q&A sessions
Post-mortem of mistakes without accusations

Scaling from 5 to 10 people

Organizational changes:

For 5-6 people:

Still flat structure
Everyone talks to everyone
Consensus in decisions

For 7-8 people:

Mini-teams appear
Team lead needed
Processes become important

For 9-10 people:

Clear accountability
Role specialization
Formal meetings

Communication formula:

Communication links = n(n-1)/2

5 people = 10 connections (manageable)
10 people = 45 connections (chaos without structure)

Solution: Hub and spoke model with team leads

Legal aspects and documents

Employment contract – key clauses:

1. Probationary period: 6 months
2. Notice period: 1-3 months
3. Confidentiality: during and 2 years after
4. Non-compete: 1 year (with compensation!)
5. IP rights: everything created belongs to the company

GDPR and personal data:

Consent to processing when applying
Deletion after 6 months
Access only on a need-to-know basis
Privacy Policy

Insurance and taxes:

Minimum insurance thresholds 2025:

Programmer: ~1,400 BGN
Manager: ~1,600 BGN
Designer: ~1,200 BGN

Stories from the field

SiteGround: From 3 in a garage to 500+ employees

They started without external funding, focused on a culture of excellence from day 1. The key – hiring people based on cultural fit, training in technical skills.

Payhawk: International team from Bulgaria

Over 200 employees in 30+ countries, managed from Sofia. Remote-first culture, but with regular team gatherings. Equity for all employees.

Chaos Group: Technical excellence

Focus on R&D and innovation. 20% time for experimentation. Result: V-Ray used in Hollywood productions acquired by Chaos for $1B+.

Common mistakes in first hires

Mistake 1: Hiring a “mini-me” version of yourself

Solution: Look for complementary skills, not copies.

Error 2: Too slow process

Solution: Maximum 2 weeks from first contact to offer.

Mistake 3: Saving on onboarding

Solution: Invest the first 30 days, it will return 10x.

Mistake 4: Lack of a written offer

Solution: Document everything from day 1.

Mistake 5: Ignoring cultural fit

Solution: Better to wait for the right person.

First-time hire checklist

Before the announcement:

[ ] Budget for 6+ months
[ ] Clear job description
[ ] Interview process
[ ] Onboarding plan

During rental:

[ ] Minimum of 10 candidates
[ ] Technical assessment
[ ] Cultural interview
[ ] Reference check

After hiring:

[ ] Employment contract
[ ] NDA signed
[ ] Equipment ready
[ ] First task defined

Conclusion

Team building is both an art and a science. We have incredible talent in Bulgaria – the question is how to attract and retain them. You can’t compete with corporations on salaries, but you can offer something more valuable – the opportunity to be part of something meaningful, to grow quickly and to have a real impact.

Remember – the first 10 people define the next 100. Invest time, be selective, and build a culture that people want to work in. The success of your startup depends on it.

This is the fifth article in the series "Practical Guide for IT Entrepreneurs" by BIC Innobridge. Next week: "Financing for Startups: From Bootstrapping to First Investment"

💼 Looking for talents? BIC Innobridge can connect you with suitable candidates from our network.

For contact:
BIC Innobridge
tel: +359 (0)82 825 875
email: info@innobridge.org