Typical employee equity levels

5 minutes, 7 links

The Holloway Guide toEquity Compensation

Common questions covered here
What are some benchmarks for equity compensation levels at startups?
How much should an early-hire engineer expect in equity compensation from a startup?
What are typical ranges for equity in early-stage startups?

Typical employee equity levels

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Compensation data is highly situational. What an employee receives in equity, cash, and benefits depends on the role they’re filling, the sector they work in, where they and the company are located, and the possible value that specific individual may bring to the company.

Any compensation data out there is hard to come by. Companies often pay for this data from vendors, but it’s usually not available to candidates.

For startups, a variety of data is easier to come by. We give some overview here of early-stage Silicon Valley tech startups; many of these numbers are not representative of companies of different kinds across the country:

  • important One of the best ways to tell what is reasonable for a given company and candidate is to look at offers from companies with similar profiles on AngelList. The AngelList salary data is extensive.
  • There are no hard and fast rules, but for post-series A startups in Silicon Valley, the table below, based on the one by Babak Nivi, gives ballpark equity levels that many think are reasonable. These would usually be for restricted stock or stock options with a standard 4-year vesting schedule. They apply if each of these roles were filled just after an A round and the new hires are also being paid a salary (so are not founders or employees hired before the A round). The upper ranges would be for highly desired candidates with strong track records.

    • Chief executive officer (CEO): 5–10%
    • Chief operating officer (COO): 2–5%
    • Vice president (VP): 1–2%
    • Independent board member: 1%
    • Director: 0.4–1.25%
    • Lead engineer 0.5–1%
    • Senior engineer: 0.33–0.66%
    • Manager or junior engineer: 0.2–0.33%
  • For post-series B startups, equity numbers would be much lower. How much lower will depend significantly on the size of the team and the company’s valuation.
  • Seed-funded startups would offer higher equity—sometimes much higher if there is little funding, but base salaries will be lower.
  • Leo Polovets created a survey of AngelList job postings from 2014, an excellent summary of equity levels for the first few dozen hires at these early-stage startups. For engineers in Silicon Valley, the highest (not typical!) equity levels were:

    • Hire #1: up to 2%–3%
    • Hires #2 through #5: up to 1%–2%
    • Hires #6 and #7: up to 0.5%–1%
    • Hires #8 through #14: up to 0.4%–0.8%
    • Hires #15 through #19: up to 0.3%–0.7%
    • Hires #21 [sic] through #27: up to 0.25%–0.6%
    • Hires #28 through #34: up to 0.25%–0.5%
  • José Ancer gives another good overview for early stage hiring.
  • Founder compensation is another topic entirely that may still be of interest to employees. José Ancer provides a thoughtful overview.