💸 How Much Should Startups Pay Their First 10 Employees? 💸
I get asked this question so often.
Startups are currently navigating lower valuations and extended funding cycles.
They need to be extremely careful in resource management.
While finding top talent is important, finding a balance on how much to pay them is key.
Here’s how to approach this challenge and figure out what to offer your first employees:
👉🏼 Use salary parameters and compensation figures that are appropriate for your industry, phase, and location
> Platforms like Otta and Figures can provide valuable averages, helping you find competitive salary ranges
👉🏼 Contact co-founders in your sector and gather insights on what they pay their first employees
> Use their experience to consider competitive compensation plans that align with your startup’s growth phase
👉🏼 Prioritize hiring exceptional junior generalists who demonstrate high potential on the job
> This approach balances skillset with long-term potential, maximizing your startup’s value
👉🏼 Attract and retain talent by offering equity as long-term motivation
> Consider allocating a portion of your option pool, typically around 10%, to leading employees
> This aligns their interests with the success of the company and creates a strong sense of commitment
As you embark on this exciting journey, remember that your first 10 employees are more than just team members – they're the foundation of your startup's future.
Check the file below for more insights on startup employee compensation from Sifted in the charts below. ⬇️
What's your secret sauce for creating a dream team without being financially damaged? 💭
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