As an ex-VP of Sales turned SaaS sales recruiter, I’m asked this question more than any other by founders – “Who should I hire first – an SDR or an AE?”
It’s a critical decision that can significantly impact your startup’s growth trajectory. Let me share some of my experiences to help you navigate this challenge.
The foundation: Founder-led sales
Before we dive into the hiring debate, let’s address a fundamental truth: you can’t skip founder-led sales.
As a founder, you must roll up your sleeves and get into the trenches. Why? Because this phase is where the most valuable learnings come from. No salesperson, no matter how experienced, can replace the insights you’ll gain from these early interactions.
Your goal during this phase is to achieve an element of repeatability. This doesn’t necessarily mean closing a specific number of deals. Instead, look for patterns:
- Are people buying your product for the same use case multiple times?
- Can you predict outcomes based on specific actions? (For example, if you send 100 emails, do you consistently get 10 meetings?)
This repeatability is your signal that it’s time to consider your first sales hire.
The case for an Account Executive (AE)
If you’re at a point where you have too many opportunities on the table and can’t close them all, an AE might be your best first hire. Here’s why:
- Closing: AEs are skilled at converting opportunities into closed deals.
- Experience: A senior AE (typically commanding a base salary of £60K-£80K) brings valuable experience and can help develop your sales playbook.
- Versatility: Many AEs, especially those interested in early-stage startups, can wear multiple hats – prospecting, closing, and even contributing to strategy.
The ideal founding AE is someone with ambitions to become a future head of sales or even an entrepreneur themselves. They’ll likely be really into sales best practice, constantly upskilling and bringing fresh ideas to the table.
The case for a Sales Development Representative (SDR)
If you’re excellent at converting opportunities when you get them, but you need more at the top of the funnel, an SDR might be the way to go. Here’s the value an SDR brings:
- Pipeline: A good SDR can create anywhere between 6 to 15 opportunities per month, depending on your ACV.
- Tech: Experienced SDRs often come with knowledge of sales tools and can help implement an efficient tech stack.
- Content: They can assist in creating messaging for outreach sequences and other top-of-funnel activities.
An SDR is particularly valuable if you’ve proven you can close deals but struggle with consistent prospecting.
Making the decision: Context is key
Life most things, there’s no one size fits all solution. You need to make the decision based on your specific situation. When speaking to founders, I always advise them to consider these:
- Your strengths and weaknesses: Are you better at closing deals or generating leads? Get someone that complements you.
- Current pipeline: Do you have more leads than you can handle, or are you struggling to fill your pipeline?
- Product complexity: Does your product require a more consultative sale (which leans more towards an AE) or is it more transactional (where an SDR might be more effective)?
- Budget: AEs typically command higher salaries but can potentially bring in revenue faster.
The efficiency play: Hiring in pairs
If your budget allows, I always recommend hiring two of whichever role you choose. It’s an absolute no brainer when you break it down.
- Risk mitigation: It reduces the impact if one hire doesn’t work out.
- Culture building: It immediately starts to create a sales culture with healthy competition.
- Accelerated learning: Two hires can learn from each other and iterate on processes faster.
The founder’s evolving role
Remember, hiring your first salesperson doesn’t mean you’re off the hook. If you hire an SDR, you’re still responsible for closing deals. If you hire an AE, you become a de facto head of sales, overseeing strategy and getting involved in the high-stakes deals.
In both cases, your role shifts to a more strategic position. You’ll need to sharpen your skills on analysing the pipeline, refining your ICP (Ideal Customer Profile), and ensuring your sales efforts align with your overall business strategy.
The bottom line
The decision between hiring an SDR or an AE isn’t just about filling a role – it’s about accelerating your company’s growth. The right hire can protect your runway, increase your valuation, and create the repeatability needed for scalable success.
My advice? Be honest about your strengths and weaknesses as a founder. If you’re highly technical and struggle with sales, bringing in an experienced AE earlier might be the best move. If you’re comfortable closing but need help filling the top of the funnel, an SDR could be your catalyst for growth.
Remember, there’s no one-size-fits-all approach. The key is to understand your specific needs, leverage your founder-led sales experience, and make a strategic decision that sets your startup on the path to sustainable growth.
Author: Matthew Codd
I’m Matthew, I have 15 years of commercial leadership experience, helping VC-backed B2B technology companies scale revenue and transition from founder-led sales.
I use my experience to help early-stage start-ups with GTM expertise, sales best practice, and hiring insights.
I co-founded Cosmic Partners in 2022. We are SaaS sales recruitment specialists for VC backed B2B tech companies.
