I tired to create a couple of products while I was still employed. They were not successful but I learned a lot just by deciding to do it. And in the end it gave me confidence enough to leave the job and go into consulting with which fortunately I have had success.

Any way, whether or not you tell your employee about your startup depends upon how well you know him/her, how comfortable are you with him/her and what your contract says.

Can you convince your boss that the duration for which you work in his organization would be as productive as it were before? Can you convince him that you are not just gathering funds just so you can leave and work full time on your own stuff when you are ready? Even if you have the very best of intentions it is hard to convince others of the fact.

At least my thinking is that there is no need to say anything to anyone in your organization unless you absolutely need to. During the early stages of your startup I suppose even you are not sure if you can be successful with it. Keep it under the wraps see how far you can go with it and then take a decision.