How many shares do employees get in a startup?
Up to this point, generally speaking, with teams of less than 12 people, the average granted equity for startup employees is 1\%. This number can be as high as 2\% for the first hires, and in some circumstances, the first hire(s) can be considered founders and their equity share could be even greater.
How much equity should you give to employees?
A general rule of thumb is to set aside around 10\%-15\% of your equity for your employee stock option pool (ESOP), which is dedicated for future employees. However, you can increase the amount of equity assigned to the pool as you distribute the equity and the pool diminishes.
How much equity should I give to my employees?
At an early stage (up to 10 employees) the reports suggest you might expect to give up to 1 \% of the total company equity per employee. As a mid-sized company (15 – 50 people), as salaries start to increase compared to the market value, you might start to give out options based on seniority or performance of the employee.
How much employee equity should you offer your startup’s developers?
Leo Polovets of Susa Ventures suggests offering between 1\% and 2\% for a lead developer, based on data from Silicon Valley early-stage startups. Fred Wilson of Union Square ventures has posted an entire free, online class where he goes into great detail about structuring employee equity, which is definitely worth watching. What about advisors?
Should founders take equity in a company?
If you take equity in a company, that means you’re eligible to share in the big rewards every founder hopes for in the end. What that also means, however, is you have to share in the same risks. I strongly encourage every founder to contractually clarify these terms with partners and employees from the onset.
What is equequity and how does it work for startups?
Equity awards, regardless of their form, are subject to vesting schedules. Traditionally, startups have used a four-year benchmark with a one-year cliff: no ownership until an employee has worked twelve months, and then 25\% for each year worked (or an additional 1/48th for every month worked).