[throw_14JAS]

I generally see <1% for first engineer hires. In order to hire someone who can 1) do the work initially and 2) grow the team, I think a 5-10% grant with a salary that's 60-80% of market is appropriate.

At least, that's what it would take for me to join a startup as first engineer versus starting my own business.

[dang]

When you say 'first engineer' do you mean literally the first employee, or early (say 1 thru 5)? If the former, what do you think would be appropriate levels for, say, employees 2 thru 5? If the latter, are you arguing that the first 5 employees should be offered 50% of the company?

Just to be clear, I'm not disputing the point and don't have a strong opinion. I'm curious where HN users—who include many prospective early engineers—think the market needs to go. The comments about startup compensation are routinely so negative that it seems clear it needs to move; the question is what range would start to be fairer.

[ninetax]

Since no one threw out any percentages, I'll take a shot at it.

I think the first engineer employee should get 2-3%, next three should get ~1% each. Sam Altman has said he thinks the first 10 should get 10% total [1], so you could front load the early employees even more.

We're a long way from that. The offers I got were in the .02-.03 percent range with most of the standard terms. Not even a 10 year exercise window. This was as one of the first 5 engineers.

Why is it like that? Guess people can hire a sufficient number of engineers without offering more. Maybe with FAANG squeezing everyone out we'll see the numbers go up, I wonder if they've been going up already.

I was certainly disappointed with my equity offers, for that YC has said about rewarding early employees, I was expecting more. Oh well.

[1]: https://blog.samaltman.com/employee-equity

[ProAm]

Even if the first five employees get 50% that will be diluted to ~5% by the time there is any form of satisfactory exit, so while it sounds high, its not crazy either. If the company doesn't exit well the 50% doesn't matter.

[sethammons]

I land on the idea that the percent is not as important as the raw value if the company hits the targets. 1%? 5%? Of what? If the company plans to get to a $1B valuation, that is different than a company that wants to exit at ~$10M. And since we all know that equity is usually worthless anyway, I think the real way that smaller companies should compete for talent is with other perks. More time off, less days per week, more control over the product's direction, better perks, etc. Oh, and better liquidation preferences that favor employees at the same level as investors because employees _are_ investors if they are taking a pay cut.