Equity for early hires: a non-lawyer's guide for founders
How much equity to give your first ten hires, how vesting actually works, and the conversations founders mishandle.
How much equity to give your first ten hires, how vesting actually works, and the conversations founders mishandle.
The bands, roughly
First engineer: 1 to 2 percent. Founding AE: 0.5 to 1 percent. Senior IC hires 6 to 10: 0.25 to 0.5 percent. Director level: 0.5 to 1.5 percent.
These are not laws. They are starting points for a conversation.
Vesting that protects everyone
Four years with a one-year cliff is standard. It protects you from a bad hire walking off with equity, and it protects the hire from working four years and leaving with nothing.
Add a double-trigger acceleration clause for senior hires so a hostile acquisition doesn't punish them.
The conversation founders avoid
The conversation worth having: what is this equity actually worth, today, on paper, and what would it be worth if the next round prices the company at a specific number?
Candidates can model this themselves. They are deciding based on it whether you talk about it or not.
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