In the high-stakes habitat of Silicon Valley, there are endangered creatures increasingly in high demand — even as the AI boom has made them ever more valuable.
Founders and investors are employing elaborate tactics to entice these people out of hiding, offering $25,000 referral bonuses, inviting them on posh getaways, and employing spy-level secrecy when they get a lead.
The trophies in question: founding engineers.
A founding engineer is typically the first technical hire at a startup, tasked with turning the founders’ vision into a working product. As members of the founding team, founding engineers take on high risk and a lower starting salary in exchange for company equity and the hope of building a product that will yield an enormous payday.
“Being a founding engineer is a little bit like being the hot girl at the club in San Francisco right now,” said Finn Mallery, cofounder of Origami Agents, who is trying to hire one for his 2-year-old startup. “Everyone is fighting over the very best people.”
They may be hot, but the role can be thankless. Although founding engineers take on a similar level of responsibility as cofounders, they receive far less equity. Founders typically receive a 20% to 50% ownership stake, while founding engineers often receive as little as 0.5%.
Because of these economics and the free-flowing capital available for upstart AI companies, many engineers are choosing to be their own bosses or are taking lucrative jobs at mature AI firms like OpenAI and Anthropic.
On the hiring side, founders are increasingly picky about weeding out highly accomplished coding whizzes who would have been top candidates in the pre-AI era. Instead, they’re on the hunt for those who can outsource much of their coding to AI and dedicate their time to product architecture and design.
Snagging a great founding engineer has become so cutthroat that founders who are happy to offer one another referrals for other positions are treating prospects like rare luxury goods to be strategically hoarded.
“They either want the founding engineer for themselves, or they want to refer them to a VC as a favor,” said Mallery.
A shrinking talent pool
Abdul Basharat has spent the past month interviewing five or more founding engineer candidates daily but hasn’t settled on a single person he wants to hire. The cofounder and CEO of Cartage, a startup that’s building an AI agent to manage freight for manufacturers, is plagued with anxiety that his company might collapse if he doesn’t hire someone soon.
“No one is meeting the bar that we’re looking for,” Basharat said.
Before the AI era, startups wanted a founding engineer who could grind away and create software. But with the rise of AI-assisted programming, they’re searching for people who can do a lot more than code.
“In a world where AI can do the job, we’re looking for someone who can talk to customers, connect the dots, and deliver the product,” Basharat said. Most candidates, he said, score highly on technical skills but fail the product interview, when his team asks critical-thinking questions about the product and its architecture.
“The people who are very cookie-cutter — who did well in high school, went to university, did four internships, and then became engineers — they just fall apart, because they’ve never thought for themselves,” Basharat said. “Now we look for people who can code, but it’s not their entire life.”
Some of Cartage’s recent hires have included a Division II basketball player, a world traveler, and a philosophy grad from Oxford.
An abundance of venture dollars flowing through the AI startup space, and the ability for new AI tools to supercharge engineers’ efficiency, has also shrunk the pool of founding engineers. In the first half of 2025, the San Francisco metro area received its biggest slice of the U.S. venture pie since 2013; more than half of all venture dollars invested nationwide went to startups based in the region, according to the National Venture Capital Association and industry research firm PitchBook.
Henry Shi, a Silicon Valley entrepreneur, said that when he founded the financial services company Super.com in 2016, there were many talented engineers who would join startups founded by friends or former coworkers once the team was able to raise seed money.
“That was the playbook before. But now, the economics are really skewed, because it’s so easy to raise money,” said Shi. “A lot of VCs are investing preemptively earlier and earlier, like pre-seed, pre-idea, pre-team.”
In the current environment, if you’re talented and have some risk appetite, you can be a founder instead of a founding engineer and own 50% of a company instead of 1%, Shi said.
Shi, who runs the LeanAI Leaderboard and advises startups, said founders who are struggling to hire founding engineers regularly ask him to provide referrals. He even found himself at a ranch retreat a few weeks ago, where founders mingled with experienced techies, trying to entice them back to the volatile world of early-stage startups.
But with the free-flowing spigot of money from investors — and even bigger compensation packages from Big Tech companies gunning to win the AI race — continuing to flow, it has become a harder sell.
“This dynamic is playing out more aggressively because of how many companies are both being started and funded,” said Lindsey Li, vice president of Bessemer Venture Partners’ San Francisco office.
Li, who works with early-stage startups at Founders Garage, advises founders that their founding engineer is likely someone they’ve worked with or went to school with.
Shi has heard a host of solutions meant to counter the shortage of founding engineers. Some startups are offering bigger slices of ownership — up to 5% — to prospective candidates. Some startups have many cofounders, giving people who would have traditionally been hired as founding engineers a title bump and a much larger equity stake of 10% to 15%.
Searching for a unicorn
Mallery laid out Origami Agent’s mantra for hiring a good founding engineer: Find someone who wants to be a founder but doesn’t want to do it right now.
“There’s just quantitatively less people interested in this type of job,” Mallery said. But he’s trying to leverage his Stanford and Y Combinator networks to find diamonds in the rough.
He has interviewed 10 people in the past month, all with a few years of experience at fast-growing startups. But in an unconventional move, Origami’s technical interview includes no actual coding. Instead, Mallery asks prospects to describe products they have built, explain engineering choices they made, and talk about products they admire. The questions are designed to test how deeply the candidate thinks about engineering and whether they will obsess over Origami’s product.
Mallery anticipates that he will hire one of the 10 people he has interviewed after they complete a two-day work trial at the startup’s Financial District office.
For Spyri Karasavva, founder of dynamic pricing technology startup Dealops, it took six recruiting agencies, two consultants, and months of blitzing LinkedIn before she found the right founding engineer.
When Yijun Zhang, a pricing expert who has founded a company, was referred to Dealops through an agency, Karasavva pulled out all the stops to convince him to join her. She made sure her team wowed him during the interview process, offered him references to backchannel her, and presented him with an offer he couldn’t refuse.
“He was a true unicorn candidate,” said Karasavva.
Zhang, who had an itch to build something from scratch after working as a machine learning engineer at Uber and Zillow, was being seriously courted by three early-stage startups. But he was convinced during the recruiting process that Dealops was the right company for him — and signed his job offer on the spot.
“They showed me that they have an ambitious long-term vision, and I believe that we can make it come true,” said Zhang. One month ago, he began working at Dealops as its founding AI engineer.
The hunt was finally over.