What’s The Right Way To Compensate Your Startup Employees?

The days of expecting your employees to work only for equity are long, long gone.

Early stage employees have a gotten a lot smarter and a lot savvier than twenty years ago. Your employees have options including working for large established companies.

That means your crappy offer to work for no salary will not cut it.

If you want to hire great people then your offer has to be better, yes better, than the competition. And the competition includes your large competitors.

Now this doesn’t mean you have to pay a higher salary than your established competition. It does mean your complete offer has to be better than the competition.

What does a better offer from a startup mean?

Let me give you a way of thinking about it.

Here are the components of what you can offer an employee to join your startup:

Salary + Stock + Job Value = Total Value of Job Offer

Here are the components of what your competitors can offer the same employee:

Salary + Stock + Job Value = Total Value of Job Offer

It’s exactly the same. So it’s obvious what you need to do: