What Do Founders Give the First 5 Hires in Equity

Startup founders - what do you give your first 5 hires in equity?

January is usually the best month for startup hiring. Many young businesses will hire their first full-time employees in less than a month.

So: what does the data say about those initial equity packages?

𝗠𝗲𝗱𝗶𝗮𝗻 𝗘𝗾𝘂𝗶𝘁𝘆 𝗚𝗿𝗮𝗻𝘁 (% 𝗼𝗳 𝗳𝘂𝗹𝗹𝘆 𝗱𝗶𝗹𝘂𝘁𝗲𝗱, 𝗳𝘂𝗹𝗹 𝟰 𝘆𝗲𝗮𝗿 𝗴𝗿𝗮𝗻𝘁)

Hire 1: 2.01% Biotech / 1.45% SaaS

Hire 2: 0.69% Biotech / 0.89% SaaS

Hire 3: 0.48% Biotech / 0.50% SaaS

Hire 4: 0.33% Biotech / 0.45% SaaS

Hire 5: 0.30% Biotech / 0.41% SaaS

Of course using medians only for this analysis would obscure a lot of important detail. So we've added 25th and 75th percentiles as well for each row.

𝗦𝗼𝗺𝗲 𝗺𝘂𝘀𝗶𝗻𝗴𝘀

• That first hire is basically it's own market. Biotech compensating higher than SaaS (maybe scientists are harder to hire?) but hires are happening all over the place.

• The two industries may bounce around a bit, but the data is pretty close across the board.

• Not exactly sure how correlated the initial equity grants are to eventual performance. I would love to dig into that further!

A few data caveats to keep in mind here. First, we excluded anyone with a grant of 10% or more (we consider that founder-level equity). Second, we don't know anything about equity refreshes here, this is just the value of the full 4-year initial grant. Third, this data skews towards Silicon Valley / New York a bit.

So much nuance in these initial hire conversations. How much salary is necessary? Are they bringing technical chops to a non-technical team? Do they bring connections that supercharge growth beyond their work? Lots of fun questions.

Happy hiring!

Oh, and if you're applying for a startup job in the coming months, give me a shout in the comments for a little data helping hand from your friends at Carta 🙏

#startups #founders #firsthires #compensation #equity