What does compensation look like?
If you join a startup, your compensation will probably be broken up into cash and equity. Compensation will vary depending on the stage of a startup you join. For simplicity sake, we’ll use data for seed-stage startups (often <15 employees). In general, cash compensation will be higher for startups that are further along (Series A, B, C, etc.) but equity will be substantially lower.
Cash Compensation
Kruze Consulting, a CPA firm that specializes in venture-backed startups, analyzed average salary ranges for over 450 seed-stage startups and published their findings in December 2024. Note that these are all just rough benchmarks and the actual compensation you’ll get paid could vary
Engineering, midlevel: $100,000 to $145,000 Bay Area; $90,000 to $130,000 other tech hubs
Sales, midlevel: $80,000 to $110,000 Bay Area; $70,000 to $100,000 other
Product titles: $130,000 to $185,000 Bay Area; $110,000 to $175,000 other
Marketing, midlevel: $100,000 to $175,000 Bay Area; $80,000 to $145,000 other
Equity Compensation
Equity compensation in the earliest stages, particularly for the first 10 hires, can vary significantly, but data from Carta offers a helpful reference point. One thing is clear: joining earlier comes with materially greater upside. The drop in median equity from hire 1 to hire 10 is steep and telling.
Beyond the seed stage, equity compensation data becomes more consistent and easier to benchmark. These are still rough guidelines, but they provide a clearer picture. The ranges reflect both differences in startup compensation philosophy and the varying levels of experience among hires.
It’s important to understand that most equity compensation follows a standard vesting schedule: it typically vests over four years, with a one-year cliff. In case this is a new concept to you, here’s a quick explainer:
If you join a startup and your offer includes 1 percent equity, you won’t receive any of it until you’ve been there for a full year (the cliff). After that first year, you’ll typically receive 0.25%, and the remaining 0.75% will vest gradually each month over the next three years. This is meant to incentivize you to continue to work hard vs. giving you all the equity upfront (this is a helpful structure for both founders and employees).
Additional Thoughts
I’ve heard many successful founders complain that they sold too much of their company to investors, but I’ve never heard of a successful founder who has complained about giving up too much equity to their employees. It is better to focus on optimizing the size of the pie rather than optimizing the size of your slice.
As an extremely rough stab at actual numbers, I think a company ought to be giving at least 10% in total to the first 10 employees, 5% to the next 20, and 5% to the next 50. In practice, the optimal numbers may be much higher - Sam Altman
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