All startup founders face this issue. You sit down at the computer and start Googling away helping you’ll find a clue about how much equity to give to an employee. Bootstrapped companies are the more interested in the answer since using equity is a great way to save some money and get people committed. Or is it? Many have tried to answer the question but it keeps coming back over and over again.
So here is a short list of helpful resources that will hopefully serve as a guide to helping you figure this out.
- Jason Cohen has recently tackled this issue in a post called “How to think about cash vs. equity compensation“
- Fred Wilson has a must-read blog post dealing with “Employee Equity: How Much“
- The Startup Company Lawyer website has an article about “How much should you pay an executive at a startup“
- Payne.org clarifies the terms related to equity compensation in “Startup Equity for Employees“
- Tony Wright has a post about “A newbie’s guide to startup compensation“
- Dharmesh Shah, in his blog OnStartups, has a post that talks about the results of the CompStudy report
- Questions on Quora about Equity Compensation are always showing up, is worth checking out the threads
I hope the above resources help in your search for the right compensation structure for your employees.