How much equity do you give to extremely early employees?

It’s a tough one because the pie only adds to 100%.

You really want to give the early folks a ton. At least — the very best ones. But it only adds to 100%.

So my rough rule:

  • Do 3x what you’d otherwise do if it’s super early, i.e. pre angel funding, pre product, pre revenue, etc.
  • Do 2x what you’d otherwise do if it’s early. E.g., first 10 employees, etc.

It won’t really be enough. They almost need 10x to make up for the risk. But it won’t fit. So try to do what is fair. 3x feels fair if it’s way early. 2x feels fair if it’s early. And after that — market.

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Published on March 26, 2018

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