Compensation and Equity Without the Mythology
Most early-stage comp conversations are confused by stories. The math is simpler than founders make it sound.
#compensation
The two-question framework
- What is the market cash comp for this role at our stage and location?
- How much equity does this person need to feel like an owner, not an employee?
Rough early-stage equity bands (US, pre-Series A)
- Co-founder / first hire: 1% , 10%
- First engineer (#2-5): 0.5% , 2%
- Senior engineer (#6-15): 0.2% , 0.7%
- Engineer (#15+): 0.05% , 0.2%
- VP / executive: 0.5% , 2.0%
Things to never do
- Promise equity verbally , always paper it.
- Use a 1-year cliff with no vesting on yourself or co-founders.
- Hand out equity as a substitute for paying market when you have the cash.
- Negotiate equity in % only , give the implied dollar value at the last round.
Equity is a tool to align incentives, not a way to pay people you can't afford.