Thursday, May 3, 2012

Startup Hiring - Typical Equity Compensation Ranges for Early-Hires

Very frequently I am asked by my early-stage clients what the "typical" equity compensation percentage is for... [insert the position they are currently trying to fill]. Since this is a topic of interest to many, I thought I would lay out some general rules of thumb.

Before I do so, however, let me preface this with a disclaimer that:

  1. all generalizations, rules of thumbs, and industry practices are imperfect and flawed by definition;
  2. no two companies are the same, so do what's right by your employees and consultants;
  3. each individual contributor is different and may warrant a different percentage under a special set of circumstances; and
  4. the ranges listed are only typical, if at all, for early-stage company (not a company with a $100,000,000 valuation).

So, provided below are merely benchmarks which may prove useful in creating your startup's own compensation scheme:

Chief Executive Officer 5-8%
C-Level Executive/VP 2-3%
Independent Director 1%
Advisory Board Member 0.15%/year
Lead Engineer 0.5 - 1%
Senior Engineer 0.33% - 0.66%
Junior Engineer 0.2% - 0.33%

Happy company-making to all!

Inna

White Summers  Inna Efimchik at White Summers Caffee & James LLP, specializes in assisting emerging technology companies in Silicon Valley and beyond, providing incorporation, financing, and licensing services as well as general corporate counseling.

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