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there is also nothing wrong with hiring a friend in a funded tech startup (as employee #1). I'd actually recommend it, because you are still in that phase where you are looking for people to work with you and not for you. And just like when finding a co-founder, getting along with a person is very important.

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I thought about this more after my comment. Yes, this is very true. Finding employee #1 is different from finding a co-founder but not by much, especially if you want them to stick around and work well with you. And founding a company with someone you are already friends with is I think much more common that founding with someone who you've just met.

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