Q: How much equity should a CEO get in a startup?
There’s no magical answer, but for venture-backed start-ups, for years VCs have aligned on around 6%-8% equity for a non-founder / outside CEO. As you approach IPO and very late stage, that often goes down.
A few examples.
Dev Ittycheria joined MongoDB as CEO after the Series B, and had 6.3% at IPO:
Jennifer Tejada joined PagerDuty as outside CEO, similarly had 6.4% at IPO as well:
Gregg Schott joined Mulesoft as CEO after founder Ross Mason, and going into the IPO had about 3%:
For founders, there’s no formula. It’s more a function of how much dilution a start-up takes, and that can vary wildly based on # rounds, valuation, etc.
Based on an analysis I did a little while back here, the average Founder-CEO ends up owning about 14% at IPO: