What is the proportion of equity incentives given to employees by startups?

Many founders asked us how to allocate options to different employees after the establishment of option pool. Are there any reference standards? We generally believe that:

The first employee (usually the CTO of the company, who belongs to the technical profession) will get at most 2.0%-3.0% of the options. We have also seen the saying of 2.0%-4.0%, and the fluctuation range is not too different. Generally, the average value given is 1. 19%.

The first two to five employees will be given the option of 1.0%-2.0% at most, and the role of such engineers may belong to tech lead, which is also a relatively powerful role.

Top 6 to 7 employees: 0.5%-1.0%;

Top 8 to 14 employees: 0.4%-0.8%;

Former 15 to 19 employees: 0.3%-0.7%;

Top 2 1 to 27 employees: 0.25%-0.6%;

Top 28 to 34 employees: 0.25%-0.5%.

The above reference values are all a maximum, which is a concept of capping. For example, the first batch of 19 engineers can issue 0.3%-0.7% options at most, which is an ideal talent for the company. He has many years of work experience and belongs to the top. He can lead the team when he goes out. If you are recruiting for an industry that has just graduated from a university or does not have much relevant experience, the proportion of options given will be far less than the above-mentioned standards.

There is even less data to refer to in this part, and the conclusion can only be simply referred to. The actual distribution ratio still needs to be adjusted according to the industry.

Sales category

The VP of the business department will generally give 1.0%-2.0% option, and the director will be in the range of 0.5%- 1.0%, and then the positions below the director will generally not exceed 1.0%. For the first batch of 10 employees, the option is usually between 0.3% and 0.5%, and for those who join later, the proportion will drop to 0. 1%-0.2%.

Market grade

The position data of this kind of VP is even less, so it is impossible to draw a conclusion. For directors, companies with less than 15 employees will generally allocate 0.5%- 1.0% options; If it is a company with more than 15 employees, it will generally be equipped with 0.25%-0.5% options.

Ui/UX design course

The top four employees will get 1.0-2.0% option at most, and occasionally 0.5%. If you are a designer recruited from outside, you can get 0.5%- 1.0% option at most. After that, the first 10-30 employees will be allocated 0.2%-0.5% options.

This part of the non-engineer positions, because the survey sample is too small to draw a representative conclusion, is for reference only.

The general principle is that the earlier employees join, the greater the risk they take and the greater the proportion of options they can get; The later you join, the less risk and pressure you bear, and the smaller the proportion of options you are allocated.

But this is not the conclusion. When a company negotiates salary and treatment with its employees, it often makes comprehensive consideration based on their qualifications, experience and ability. Some employees hope to get more cash returns, get more salary and sacrifice a small part of their options, which will be more attractive to such employees.

When allocating options, the most important thing is that the company has good communication with employees. The original intention of the startup company to issue options is also to motivate employees and let employees create greater value for the enterprise. The above-mentioned common parameters in the market are also for companies to have a comparison when allocating options, not too generous or too stingy.

The former may not have enough equity for investors in the next round of financing. In the latter case, employees may feel that they are not valued by the company, and their efforts are not recognized by the company, which also loses the incentive effect and even produces negative incentives. It is also possible.

Therefore, good and transparent communication with employees is the most important thing to implement equity incentive.