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Here is what I learned from working with couple startup as an employee. Hope this helps founders to provide better working environment to their employee (EDIT : page is full of spelling and grammatical errors.Sorry for it, English is not my first language and i'm very poor with it :D ) To start-up founders from an unknown start-up employee. After running your start-up for few years, suddenly don't hire a school friend simply because of he is your childhood friend or smart guy during those school days or even trustworthy. But Does you friend fit into the culture of your company ? He may be nice to you but not to your employee's. Your employee will be thinking twice before disagreeing with your friend because they know you two best are friends.    Give Freedom to all employee's  Flat Structure - no hierarchies and no designations at all  Give stock options to all  Don't hire people, unless extremely needed and if no one in the start-up can fit and make sure there are passionate.  Hire more passionate people than talented ones.  Get at-least one free customer/user before you start your business  Head count mustn't be more than 50 - Because,after this it will promote politics  If some employee _extremely_ passionate/interested in another tasks like development ,don't keep him QA simply because he's giving more than 100% at his current QA tasks.Allow them move.  Don't be a manager/supervisor  Provide interest free loans for suitable employees  For a problem, each team member must come up with their own solution & discuss them & vote & choose the solution.Don't put forward a solution simply because your in management.  Encourage entrepreneurship among employees  Don't hire MNC employee as a team leader, unless he has proven record and well-known/respected person  Each employee must run his/her own open source project regardless of company work.  Update/provide simple user manuals/docs/videos/forums at initial stage of your product itself.  Allow employee to compete against themselves not against his/her team members  Implant "Sharing of knowledge is the basic act of friendship among programmers" motto among employees.  No everyday meeting  No unnecessary mails to team with terms like FYI,ASAP, EOD etc  Don't hire anyone who just supervises team members  Make sure work is fun.  Its okay to skip weekly status report occasionally  Don't use terms like 'as we agreed' - when there was no such agreement reached in previous meetings :P  Don't allow employee work can be estimated in terms lines of code written or no.of bugs filed.  Never judge employee by their arrival time and departure time to/from the office  When going for IPO/acquisition don't backstabbing for your hard-worked employee's ( Give incentives/more stock options for those who was there for long time and worked _hard_ )  When someone wants to resign ( after doing all the hard-work for your start-up ), try & address his/her issue in positive manner.  Don't lie to candidates during interview - tell them their exact role  Don't form a small group of favorite employee  Take responsibility especially when everything fails - don't try to hide or blame others.  Don't peek into employee desktop/laptop & spies their actives.  Don't send mail on Friday evening , asking employee to work on weekends.  Don't treat an employee badly in front of others [If you have issue,talk to him privately]  Don't give unbearable work to hardworking employee - just because you know he/she is hard worker  Never think just money alone can retain good employee  Keep your mouth shut, if you don't know what the topic/technology in a  discussion  Don't threaten or drag employee release date,when he/she wants to quit  Don't _act_ like being nice  Treat everyone with respect ( everyone came to help/work hard/have fun in your start-up,not because they didn't get job in better company/compensation )  Treat freshers/interns keeping their carrier in mind not just your own self-fish motives/plans  Conduct weekly sessions on new technologies and ask each member to share their knowledge  When employee quits ,don't disable his/her email account ASAP :P