H2 2024 State of Startup Compensation

Over the past three years, many venture-backed startups have transitioned away from a strategy of growth at all costs. Today, many young companies are more focused than ever on things like efficiency, profitability, and making the most of available resources. 

These new priorities have impacted just about every aspect of startup life. Hiring is no exception. 

Between January 2022 and January 2024, the number of new monthly hires made by companies on Carta declined by more than 50%. Over the full course of 2022, companies made 1.75 new hires for every one worker who departed their role; by 2024, that ratio fell to 1.06 hires for every departure. 

The employment market of 2024 was leaner. It shifted in other ways, too. The number of new hires may have dwindled, but average salaries ticked up in 2024 across most industries and job functions. Fewer layoffs are taking place. Fewer employees are choosing to leave jobs on their own, too. And the compensation equation has settled into a new normal: Compared to three years ago, equity is now a much smaller component of the typical startup compensation package. 

The data in this report comes from thousands of CTC customers and over 800,000 current salary and equity data points used by Carta Total Compensation. Other metrics derive from the aggregate pool of more than 1.3 million employees who currently work for the 53,000 startups that use Carta to manage their cap table. 

H2 2024 key takeaways

• Hiring is accelerating in sales: In 2024, employees in sales accounted for 19.9% of all new hires, up from 14.8% in 2020. Sales is the second most common job function for startup hiring, behind engineering.

• Employees still aren’t exercising vested options: Employees exercised just 32.2% of vested, in-the-money stock options during Q4, compared to 54.2% three years ago. Employee exercise rates remain near recent lows.

• The rate of in-state hires is on the rise: Until recently, in-state hiring was growing less and less common every year. In 2023 and 2024, however, in-state hiring is ticking back up: For startups valued between $25 million and $50 million, the rate of in-state hires has risen from 37% in 2022 to 49% in 2024. 

Hiring & headcount

A frenzy of job movement that began amid the pandemic bull market of 2021 is gradually petering out. There were 8,858 voluntary job departures on Carta in December, a 31% decline compared to the same period a year prior. And there were 5,764 involuntary departures, down 35% year over year. 

This means that fewer employees are choosing to leave their current companies to take new jobs. It also means fewer employees are being subjected to layoffs. Employee turnover of all kinds became less common over the course of 2024, with combined job departures in December falling to the lowest level since May 2021. 

On a quarterly basis, there were 30,821 voluntary job departures during the final three months of 2024, the lowest total since Q4 2020. Involuntary departures, meanwhile, sunk to their lowest point since Q1 2022.

In both cases, however, these figures remain stubbornly high compared to where they were prior to 2020—particularly the number of involuntary departures. The Q4 count of involuntary departures is more than twice as high as it was in the respective Q4s of 2019, 2020, and 2021. Layoffs have been a persistent feature of the startup landscape over the past few years, and that remains true in the early weeks of 2025. 

Net headcount across all companies on Carta increased by 24,450 people during the first nine months of 2024. That equates to a roughly 2% increase in total employee count across the startup landscape. During the final three months of the year, this trend reversed course, and net headcount dropped by 10,397 individuals. By the end of 2024 total headcount had returned to the same level as May 2024.

Overall, it was a year of positive headcount growth for startups. But some of the year’s gains were clawed back in Q4. 

The number of monthly new hires on Carta soared to a recent high in January 2022, with a total of 73,048 new employees added to company cap tables. Since then, hiring activity has been tailing off for the most of the past three years. 

These numbers will continue to rise in the coming weeks, as companies continue to log new hires on Carta from late in the year. At current count, though, monthly hiring in December 2024 was down 53% year over year and down 85% from that January 2022 peak. 

Beyond the borders of VC, the U.S. job market ended the year on something of a high note. Across the full economy, companies added 256,000 new jobs in the U.S. in December 2024, the most since March 2024, while the unemployment rate declined from 4.2% to 4.1%. 

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Our complete State of Startup Compensation report includes more than 30 new charts showing how trends in salary and equity are shifting across the startup ecosystem.