Payroll, benefits, HR, 401k - these are usually the last things you think about as a founder, especially if you’re spinning out your science from the lab.

Until suddenly you just closed your pre-seed, you have three new hires starting on Monday, and you’re trying to figure out how to actually pay them without getting the IRS on your trail. Trust me, I speak from experience 🙂

When I was setting up payroll for Bench2Bio, I talked to a few providers and tried to figure out who wasn't going to make this harder than it needed to be. I landed on ADP, and honestly the experience was so much better than I expected. Their onboarding was super quick, and I’ve had a team of experts that’s always been a direct call or txt message away - something I haven’t experienced with any other provider.

Also, I was surprised to learn how relevant many of their programs are for early-stage biotechs. For instance, their R&D tax credit program can offset up to $500K of qualified R&D spend against payroll taxes each year. For a pre-revenue company, that's real money.

I asked ADP if they’d be open to extending founder-friendly pricing to Bio Founder GPS readers and good news - they agreed.

Here’s what you get as a Bio Founder GPS reader:

If you want to check eligibility or lock in the exclusive pricing, fill out the form below and someone from the ADP team will follow up.

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Disclosure: this is an affiliate partnership, and signups help support the Bio Founder GPS newsletter & community.

Last month I was on a call with a founder who had just closed his pre-seed.

Honestly, the call was mostly a celebration. I was thrilled for him. We talked through his next 18 months - how to hit the milestones he'd just committed to, how to start positioning for the seed, who to keep warm in the meantime. This was a great post-raise conversation.

And then, as we were wrapping up, he said, almost as an afterthought:

“Oh, by the way - do you typically see companies at our stage offer new hires a 401k? What about other benefits? The people I’m interviewing are at big companies where they have lots of perks, and I want to be competitive.”

You may be surprised just how often questions like this come up with founders.

Here's the scenario I've seen play out over and over:

You close the round; the money hits the bank. And suddenly the clock starts ticking - 18 months to hit your milestones, a fresh validation to capitalize on, and a list of things you need to set in motion this quarter.

You lock in your lab space; you sign a contract with a CRO. You have new hires starting next month.

And then, in parallel, this hits you: you need to figure out operations.

Payroll. Benefits. PTO policy. State registrations. Workers' comp. Unemployment insurance. Option pool mechanics. 401k. I-9s. W-4s 🤯

And if you have a wet lab - an IBC registration, a biosafety plan, hazardous waste contracts, shipping certifications.

If you wake up excited to think about any of that - you have my respect, and let's talk :)

For the rest of us mortals, what usually happens is this: you start stitching a system together one piece at a time. You pick a payroll provider because a friend recommended it. You figure out benefits because a new hire asks about health insurance. You google “what’s a 401k safe harbor match” at 11pm because the offer letter you're drafting requires you to pick one.

Each step teaches you something you didn't know you didn't know. And every time you learn something new, you find yourself wondering if the last five decisions you made were right.

Months go by.

Meanwhile, the clock on your milestones is ticking.

So here's what I want this issue to do: give you the cheat sheet I wish I'd had. A simple way to navigate what's critical at your stage, what fits your sector, and what you can safely defer until the next round.

Let's break it down 👇

Here, I have some good news. Whether you're running a wet lab, a diagnostics platform, or a techbio, the operational foundation is similar enough that it can be captured in three pillars:

Money: How cash moves in and out of the company - banking, bookkeeping, invoices, taxes.

People: How you pay, support, and stay compliant with the humans on your team - payroll, benefits, HR, equity.

Compliance & Infrastructure: What keeps the company humming along without getting you in trouble - legal, insurance, vendor contracts, IT, state registrations.

Get these right, and the company runs like a well-oiled machine. Get them wrong, and you're spending Monday mornings on hold with the IRS instead of moving your science forward.

If you have a wet lab, there's a fourth layer that sits on top of the three pillars - biosafety, lab supplies, equipment, shipping. We'll cover that as well.

Now, let’s look at each pillar and where you should spend your time.

This covers the cash actually moving through your company. Every life science startup needs this layer, regardless of vertical.

Banking & accounts payable

Open accounts with a startup-friendly bank - Mercury, Brex, or First Citizens (which absorbed SVB). You'll have invoices from CROs, lab vendors, lawyers, and consultants from week one. Set up bill-pay and a clean approval workflow before you have to.

Bookkeeping & monthly close

This covers the monthly close, clean books, and categorized transactions. Pro tip - start categorizing your transactions from Day 1. Cleaning up 90 days of uncategorized transactions later is an order of magnitude harder than staying current. Bookkeeping vendors to consider: Pilot, Bench, or Kruze Consulting.

Tax planning

Two things to set up early that most founders miss. First, the federal R&D tax credit, which can offset up to $500K per year against payroll taxes for qualifying companies. Second, QSBS eligibility - Section 1202 lets founders exclude up to $10M or 10x their basis from federal capital gains tax at exit, but only if the company is a Delaware C-corp, gross assets are under $50M at the time of stock issuance, and stock is held for 5+ years. Biotech hits that $50M cap fast once you raise a Series A. The window to issue QSBS-eligible stock is narrower than founders realize.

Cash management & runway tracking

A simple monthly model showing cash on hand, burn, and runway. Note - this is not a 5-year forecast. Just a running view of how long the money lasts at current spend, plus a stress-test for the milestones you actually have to hit before raising again. This is the artifact your future investors will ask to see, and the artifact your future self will need to make stay-or-cut decisions.

The moment you hire your first W-2 employee, most of these items move from theoretical to urgent overnight.

Payroll, HR & benefits

The core decision here is PEO vs. standalone payroll. A PEO (like ADP TotalSource, TriNet, Justworks, or Insperity) puts you into a co-employment model - they become the employer of record for administrative purposes, which lets you access Fortune 500-level benefits pricing that a 5-person company could never negotiate alone. Standalone payroll (ADP Run, Gusto, Rippling) is cheaper and more flexible but you're on your own for benefits, workers' comp, and state tax registrations. For most pre-seed companies with 3-10 employees, a PEO wins. Typically, you graduate to standalone when you have 40-60 employees and an in-house HR lead.

Employment compliance & training records

Offer letters, employment agreements, PIIAs (Proprietary Information & Invention Assignment Agreements - these protect your IP and are non-negotiable for VC due diligence later), I-9s, W-4s, and state-specific required trainings. Keep a personnel file system from day one - your PEO handles this, or use a platform like Rippling or BambooHR if you go standalone.

Equity, option pool & 409A

You need a documented equity philosophy (how you'll allocate, what vesting looks like, ISOs vs. NSOs), a 409A valuation before your first hire gets an option grant, and a plan for how the option pool will evolve across rounds. Carta and Pulley both offer 409A valuations bundled with their cap table products - use them. Standard vesting is 4 years with a 1-year cliff. Getting this wrong at pre-seed compounds into real dilution and expensive legal cleanup at Series A.

401k - Defer until ~5 employees or as required by state. Several states (California, Oregon, Illinois, others) now mandate retirement plans once you cross small headcount thresholds, so the urgency of implementing this is likely to be based on your geography. Your PEO will handle this when the time comes.

This is the keep-the-entity-alive layer. This pillar is also universal, though the specifics scale based on what you do and where you operate.

Legal entity & cap table

Typically this includes regirsting as a Delaware C-corp with clean IP assignments, founder vesting with 83(b) elections filed and a cap table you can update without calling a lawyer. I recommend using an emerging-growth-friendly firm like Cooley, Wilson Sonsini, Fenwick & West, Gunderson Dettmer, or boutiques like Foley Hoag or Mintz. For cap table, Carta and Pulley both work; Pulley is cheaper at early stage.

State registrations & annual reports

Typically, Delaware is where your company legally lives, but the moment you have an employee or meaningful business in another state, you need to file foreign qualification there too. You'll also need a registered agent in every state you register in, plus Delaware franchise tax and annual reports anywhere you've qualified. Most founders discover this when they run payroll in a new state and realize they should have registered first - and the back taxes and penalties hit a few months later.

Insurance

General liability and workers' comp go in day one (your landlord and payroll provider will require them). Directors & Officers insurance isn't urgent until you have a board - typically when you raise a priced round. Embroker, Vouch, and Newfront (which has a biotech practice) are used to early-stage life sciences and will bundle appropriately.

Vendor & contract management

You'll be signing NDAs, MSAs, SOWs, employment agreements, lease addenda, and consulting agreements throughout your first year. Keep them organized in one place. DocuSign or Dropbox Sign for execution; a simple shared folder structure for storage. Track renewal dates so you're not surprised. Whoever is wearing the office-manager hat (often the CEO at this stage) owns this.

IT, devices & data security baseline

Pick Google Workspace or Microsoft 365 for email, calendar, and storage. Get everyone on a password manager (1Password or Bitwarden) and turn on multi-factor authentication everywhere. Once you cross 5 or so employees, add a mobile device management tool like JumpCloud so you can push security policies and offboard cleanly. Make sure cloud backup is running.

Records retention

This typically includes tax records (7 years), payroll records (4 years), employment records (varies by state), corporate records (permanent). You don't need a formal records retention policy at pre-seed but it’s smart to establish the habit of saving things in the right place.

If you have or will have a wet lab, here's the fourth layer that you may need to keep in mind. You can skip this if you're a platform, AI-bio, dry diagnostics, or health-tech company.

Here’s what to keep on your radar:

If your company handles protected health information (PHI) or sells software to health systems, the IT/data security baseline in Pillar 3 isn't enough. You'll need a heavier compliance stack: HIPAA-aligned IT (Aptible is a common cloud platform pick), encryption at rest and in transit, access controls, audit logging, and an annual risk assessment. SOC 2 readiness becomes a sales requirement once your first enterprise prospect asks for it - typically post-Series A. Vanta and Drata are the standard tools for SOC 2 evidence collection.

Note - this isn't a casual lift. If you're going to be HIPAA-regulated, build it into the IT baseline from day one. Let me know if you’d like me to consult an expert and cover this in more detail in a future issue.

Reading the framework, you might be feeling a bit overwhelmed. That's fair, there's a lot here, and most of it doesn't get talked about enough.

Here’s some good news though: you don't have to set all of this up in week one.

If you've just closed your round, the best thing you can do is approach this in sequence. Some items have to be locked in before money moves or your first hire starts. Others can wait until your team is starting to form. Others aren’t timely until you're 60-90 days in.

Below is how I'd think about it across the first 90 days:

Pro tip: if you have people on your team who are already helping you - a founding scientist, an operations-minded co-founder, a fractional CFO, this map also doubles as a starting point for who can own what. You don't have to be the one who learns 401k safe harbor mechanics in the middle of the night. Pull in your team early and assign ownership where you can.

Frameworks are useful, but at some point you need to actually pick a payroll provider, a bookkeeper, a law firm, a shared lab. That's where most founders spend hours bouncing between Reddit threads and outdated startup blogs trying to figure out who to call.

So I'm sharing a shortlist I keep for myself and the founders I work with, across all the categories we covered today (plus a few that we didn't).

It's a living Notion doc that I update as I learn - now you can have access to it as well.

One caveat: I've personally used some, but not all, of the vendors on this list. Treat it as a starting point, but not as gospel. Your specific vertical, stage, geography, and team composition will all influence what's right for you. Always do your own research before signing a contract.

👉 [Access the Biotech Vendor Shortlist]

Look, I get it - operations isn't the most exciting topic. But getting it right early saves you weeks you can't afford to lose later - and most importantly, it frees you up to focus on what actually moves the needle: your science, your team, and your next round.

If you've been through this yourself, I'd love to hear what worked and what didn't. And if there's a vendor I should know about - one you've used and would recommend, or one you wish you'd avoided, reply to this email and let me know. I’d love to hear from you, and your feedback will go towards building a valuable resource for our community.

See you next Sunday!

- Vadim

PS: When you’re ready, here’s how I can help: