

Ask HN: What is the standard first hire equity + salary in a new startup - Jsarokin

We are in the process of hiring our first programmer. As a startup trying to keep costs to a minimum, whats the standard equity / salary our first tech hire should get? (ballpark is cool too)
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nabraham
This post might be helpful: <http://news.ycombinator.com/item?id=973060>

Everything is a negotiated outcome, but good engineers are worth market salary
in the absence of equity.

With equity, one rule of thumb I've heard is give 1% for every $10,000 cut the
person takes. This implicitly values your company at $1m, but I guess most
companies don't hire an employee unless the business is worth at least that.

Another rule of thumb I've heard is $50k for 2%-4%. Somewhat supporting this
is Aaron Patzer (Mint.com founder) paid his early engineers $30k-$50k for 1%
to 5% equity. See [http://techcrunch.com/2009/10/08/startups-101-the-
complete-m...](http://techcrunch.com/2009/10/08/startups-101-the-complete-
mint-presentation/)

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damoncali
It's all over the map. Some people like equity. Some people (I'm in this camp)
think early equity is too risky to compensate for the salary cuts demanded.

Say I take a $10,000 pay cut. Say your company is worth $1,000,000. That means
I should get 1% right? No. I should get 1% _this year, starting immediately._
But wait. My 1% has only a very small chance over ever turning into money.
That means I need, say, 5-10 percent to compensate for that. Don't know many
startups willing to give someone 5-10% for a $10k salary cut? Neither do I.
Maybe I'm too conservative.

Or, if you want the short answer, I'd say between 0.25% and 5% is normal to go
along with a 20-30% salary cut. That's what I've seen, at least. YMMV.

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glimcat
It varies wildly.

The old rule about remembering to pay your soldiers goes. Cutting salary has
consequences to your ability to attract and retain talent and equity is worth
$0 until some hypothetical point in the future.

