How Much Equity Do Startup Board Members Actually Receive

How do founders compensate startup board members with equity?

The OpenAI drama of the past couple weeks centered around the board - and highlighted many open questions for founders to consider as they build their suite of directors.

But many founders still struggle with something more prosaic: how much equity do those independent board members typically receive?

We can't help much with who you choose to give board seats to - but we can give you benchmarks for their equity!

The data (from 2,718 board members at early-stage Carta companies) says:

𝗦𝗲𝗲𝗱 𝗦𝘁𝗮𝗴𝗲

• 0.78% on average

• 0.50% as a median

𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 𝗕𝗼𝗮𝗿𝗱

• 0.53% average

• 0.40% median

𝗦𝗲𝗿𝗶𝗲𝘀 𝗕 𝗕𝗼𝗮𝗿𝗱

• 0.39% average

• 0.30% median

This is data from Jan 1, 2022 onward so only the freshest numbers. They may be slightly lower than average equity granted during the boom times.

These ranges come with a LOT of variability. We see grants well above the 75th percentile in some cases (maybe it's a famous operator, maybe they bring key industry connections, etc). We also frequently see lower grants.

Note that these are all independent board members, not founders, company executives, or board seats held by major investors.

The grants in question have vesting schedules - most common being a 4-year vest, but many 2-year vests as well.

Boards can be transformative for young startups with the right set of engaged members - or they can be figurehead committees with little actual influence. Or, as we saw this past few weeks, they can wreck the best-laid plans of the founder.

Hope founders everywhere put the right team together!

#cartadata #boards #startupequity #equity #founders #startups