Short answer: If you’re a seed-stage founder, start with Account Executives (AEs) to generate early revenue and validate your sales process. Hire a VP of Sales later when you’re ready to scale with a proven strategy and steady pipeline.
Key points to consider:
- VP of Sales: Ideal for long-term growth, team building, and creating scalable systems. However, they’re costly and may take 6–12 months to show results. Best suited when you have some traction and a clear sales process.
- Account Executives (AEs): Focused on immediate revenue generation. They’re a more budget-friendly option with performance-based pay but lack the strategic oversight to scale effectively.
Quick Comparison:
| Factor | VP of Sales | Account Executives (AEs) |
|---|---|---|
| Cost | High salary + equity | Lower base + commission |
| Time to Impact | Slower (6–12 months) | Faster (immediate deals) |
| Focus | Long-term systems + strategy | Short-term revenue generation |
| Risk | High if hired too early | Lower, easier to adjust |
| Scalability | Builds scalable foundation | Limited without strategic input |
Recommendation: Start small with AEs to close deals and learn what works. Once you’ve validated your market and achieved consistent revenue, bring in a VP of Sales to scale.
From Founding AE to VP: Conor Dragomanovich’s rise at Productboard
1. VP of Sales
Bringing on a VP of Sales can be a game-changer for your startup, but it’s not a decision to take lightly – especially at the seed stage.
Leadership Role
A VP of Sales is more than just a senior hire – they’re the architect of your entire sales strategy. From designing lead qualification frameworks and setting revenue goals to creating compensation plans and scalable processes, they build the foundation for long-term success.
Instead of focusing solely on individual deals, they zero in on scalability. They analyze market trends, identify the most lucrative customer segments, and craft messaging that aligns with your product’s strengths. For a seed-stage company, this means having someone who can turn your product’s features into compelling value propositions that resonate with your audience.
Revenue Generation
While a VP of Sales can drive revenue, their real value lies in building systems that ensure consistent revenue growth. They focus on repeatable, scalable processes – like lead scoring, structured sales stages, and CRM workflows – that guide prospects efficiently through the sales funnel.
That said, the results may not be immediate. It often takes 6–12 months for a VP to fully understand your market, refine your sales process, and identify the best channels for growth. But once those systems are in place, they create a foundation for predictable and sustainable revenue.
Before jumping into this hire, though, it’s crucial to weigh the financial implications.
Cost and Budget Fit
Hiring a VP of Sales too early can strain your budget. Their compensation is usually significant, combining a high base salary, performance bonuses tied to revenue, and equity through stock options or restricted stock units.
For startups with less than $5M ARR, this role can be a risky investment. A VP of Sales typically expects an established sales team and proven processes to refine, but many seed-stage companies are still building from scratch. This mismatch can lead to burning through your runway before the VP’s work begins to show results.
Team Building and Growth
Once systems are in place, a VP of Sales can focus on scaling your team. They’re skilled at building teams and creating a strong organizational structure. From hiring a mix of inside sales reps, account executives, and sales development representatives to onboarding and setting performance metrics, they know how to create a cohesive, high-performing team.
Transitioning from founder-led sales becomes much smoother with a VP of Sales. They can introduce training programs, mentorship opportunities, and performance management systems to ensure consistency across the board. Plus, their network of seasoned sales professionals can make recruiting top talent easier as your company grows.
Timing is everything. A VP of Sales is most effective when you already have some sales traction and are ready to scale what’s working into a repeatable, efficient system.
2. Account Executives (AEs)
While a VP of Sales focuses on long-term strategies, Account Executives (AEs) are all about driving immediate results. For seed-stage startups, bringing on AEs can help generate early revenue and confirm whether the product has a place in the market.
Revenue Generation
AEs take charge of the entire sales process – from the first conversation to closing the deal. This hands-on approach helps startups quickly bring in revenue and show potential investors that the market is responding positively.
Cost and Budget Fit
Seed-stage startups often operate with tight budgets. Hiring AEs can be a more budget-friendly choice compared to bringing on a VP of Sales. Instead of committing to the higher costs of executive-level salaries, startups can tie AE compensation directly to their performance. This pay-for-results approach helps founders manage costs while still pushing for fast revenue growth – a win for startups trying to break into the market without overspending upfront.
Team Building and Growth
AEs may not be responsible for managing teams, but their direct interactions with customers provide valuable insights into what works and what doesn’t in the sales process. Over time, top-performing AEs can grow into leadership roles, helping the company refine and expand its sales strategy as it scales. Their experience on the front lines can be instrumental in shaping the future of the sales team.
sbb-itb-32a2de3
Pros and Cons Comparison
Choosing the right hiring path during the seed stage is a critical decision that can shape your startup’s future. Each option – hiring a VP of Sales or building a team of Account Executives (AEs) – comes with its own set of trade-offs that affect your budget, growth trajectory, and overall success.
| Factor | VP of Sales | Account Executives (AEs) |
|---|---|---|
| Upfront Cost | Higher salary and equity requirements | Lower base salary with performance-based incentives |
| Time to Impact | May need more time to establish strategies and processes | Can start closing deals and generating revenue more quickly |
| Revenue Potential | Focused on long-term growth through strategic improvements | Delivers immediate revenue but may lack a broader strategic framework |
| Risk Level | Mis-hiring can have significant strategic and financial consequences | Underperformance impacts individual quotas, allowing quicker adjustments |
| Scalability | Builds a scalable foundation for future team and process expansion | May hit a ceiling without added strategic leadership |
| Founder Involvement | Reduces founder involvement in sales strategy, freeing time for other priorities | Requires active founder participation in shaping and guiding strategy |
This comparison highlights the core differences between these hiring strategies. A VP of Sales brings experience and a strategic focus but comes with higher upfront costs, including salary and equity. On the other hand, hiring AEs offers a more flexible, performance-driven model that can help manage immediate cash flow concerns.
However, it’s important to weigh the risks. A poor hire at the VP level can disrupt your startup’s strategic direction, while underperformance from an AE is generally easier to address and isolate.
Your market dynamics should guide your choice. If your sales process is straightforward and transactional, AEs might be your best bet. But if your business involves complex sales cycles and relationship management, the expertise and strategic vision of a VP of Sales could be invaluable.
Conclusion
When deciding whether to hire a VP of Sales or AEs at the seed stage, your choice should reflect both your immediate needs and long-term goals. Factors like product-market fit, the length of your sales cycle, and your budget play a key role. For startups with tighter budgets and shorter sales cycles, starting with AEs can be a practical way to drive revenue quickly while retaining flexibility and control.
It’s worth noting that bringing on a VP of Sales early on requires a significant financial commitment, which might strain an early-stage budget. On the other hand, hiring AEs often comes with more adaptable compensation models, such as lower base salaries combined with commission structures. This approach can be a safer option as you work to establish steady growth.
A smart strategy? Begin with a small team of capable AEs to fine-tune your sales process. Once you’ve validated your market and achieved consistent revenue, you’ll be in a stronger position to onboard a VP of Sales to scale your efforts. In a fast-moving startup environment, generating early revenue is a top priority.
To make data-driven hiring decisions and optimize your sales strategy, explore M Accelerator’s AI-powered frameworks. These tools are designed to help you build automated revenue systems that support both AEs and VPs of Sales, ensuring your team is set up for measurable success. For more insights on scaling your startup, check out our AI Acceleration Newsletter.
FAQs
When should a seed-stage startup hire a VP of Sales instead of focusing on building a team of Account Executives?
When your startup has nailed down a repeatable sales process and is ready to grow, it’s time to think about bringing on a VP of Sales. This role provides strategic leadership, sharpens your sales approach, and builds a team that can scale effectively, driving long-term growth.
However, if you’re still in the phase of ironing out your sales process or handling much of the sales yourself, it’s often smarter to focus on hiring Account Executives (AEs) first. They can help bring in revenue quickly and provide valuable insights to shape your strategy. Jumping the gun on hiring a VP too soon can drain resources and fall flat without a solid sales foundation.
When is the right time for a seed-stage startup to hire a VP of Sales versus focusing on hiring Account Executives?
Deciding whether to bring on a VP of Sales or focus on hiring Account Executives (AEs) during the seed stage comes down to your startup’s priorities and growth plans. If your immediate goal is to drive revenue and you have an established sales process, hiring AEs might be the way to go. On the other hand, if you need someone to create a scalable sales strategy and provide leadership, investing in a VP of Sales could be the smarter move.
To make the best choice, think about your budget, the complexity of your sales cycle, and how much time you, as the founder, can dedicate to sales. Bringing in a VP of Sales too soon might leave you with underutilized resources, but waiting too long could result in missed growth opportunities or founder fatigue. Your hiring strategy should align with both your current stage and your long-term vision for growth.
What should Account Executives focus on to drive revenue at the seed stage?
At the seed stage, Account Executives (AEs) need to zero in on building strong relationships with potential customers, managing the sales pipeline effectively, and closing deals to bring in revenue quickly. Their main focus should be on direct client interactions, ensuring every conversation or meeting pushes prospects closer to becoming paying customers.
In addition to selling, AEs play a key role in shaping the sales process. By sharing feedback and collaborating closely with the founder, they can pinpoint areas for improvement and uncover new growth opportunities. This partnership helps lay the groundwork for a sales system that can scale as the business grows.
