Startup recruitment

The closest thing to an official definition

There’s no legal or fiscal test for “startup” the way there is for an SME. The nearest official proxy is statistical: Eurostat and the OECD define a “gazelle” as a high-growth enterprise no more than five years old, where a high-growth enterprise is one growing average headcount by more than 10% a year for three straight years, starting from at least 10 employees (Eurostat). Age and growth rate decide it. Headcount doesn’t.

That distinction matters because a ten-year-old, 40-person business with flat headcount and a two-year-old, 40-person business doubling every eight months can file identical EU SME paperwork. Only one of them is a startup in any sense a candidate should care about. SME status is a size box on a form; startup status is a bet on where the company is headed, and the hiring that follows from it looks different at every stage of that bet.

What that means for how startups hire

The practical differences trace back to growth and uncertainty. Headcount has little to do with them.

Equity stops being optional to mention. A base salary alone isn’t the whole offer, and pretending otherwise wastes the candidate’s time; see equity grant for how the instruments actually work country by country. It’s also not evenly distributed: at Series A and B, Index Ventures found that 75% of Bay Area companies grant options to every employee, against 32% of companies in continental Europe. A candidate asking whether the whole team gets options or just engineering is asking a real question with a real, company-specific answer.

Risk tolerance belongs in the job spec, on the same footing as any hard skill. CB Insights’ analysis of 431 VC-backed companies that shut down since 2023 found 70% cite running out of capital and 43% cite poor product-market fit. Two offers at the same salary can carry very different odds, and a candidate weighing them is pricing that in whether the company says so or not.

And the hiring process itself moves faster in the early stage because nobody has built one yet. The first ten hires are usually made by whoever is closest to the role, often a founder screening engineers, with a decision inside a week rather than a multi-stage approval chain. An in-house recruiter tends to arrive only once that founder can no longer run hiring and the rest of the job at the same time.

What the label doesn’t decide for you

“Startup” says nothing about how much process to build, and Join sells to companies at exactly this stage, so weigh the next line accordingly: the more common mistake here isn’t too little structure. It’s importing a 500-person hiring playbook (a scorecard rubric, a five-round loop, a requisition committee) onto a twelve-person team that could still fill a role from one strong conversation and a reference call.

It also doesn’t settle whether a company is an SME. A startup can clear the EU’s SME threshold on paper and go on hiring like one long after the funding and the uncertainty that made it a startup are gone, or stay a startup in every practical sense while quietly crossing the headcount line that made it an SME in the first place. The two labels answer different questions, and a hiring plan built on the wrong one is a plan built on the wrong assumptions about who is actually applying and what they expect to hear in the interview.