💥The First Ten Hires: Tactics, Incentives, Employer Branding & Channels That Work
Synthesizing Insights From the Data
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Hiring Top Talent in Early-Stage Startups (Without a Big Brand)
Early-stage startups (especially pre-seed and seed) face a classic catch-22: They need top-notch talent to succeed, but without a well-known brand or big-budget perks, attracting and closing those candidates is daunting. Yet many scrappy startups consistently manage to hire world-class engineers, salespeople, and marketers long before anyone knows their name. How do they do it?
In this deep dive, we’ll explore specific tactics for winning over great talent without name recognition, examine data on equity vs. cash tradeoffs for early hires, discuss workarounds to build an employer brand from scratch, and highlight which recruiting channels and practices work best for young companies.
We’ll also include a short look at how startups today are generating more ARR with leaner teams (thanks to AI) – a trend that is reshaping early hiring strategies.
Let’s jump in👇
Compensation: Balancing Equity and Cash for Early Hires
When you lack a big brand or profits, a compensation strategy becomes pivotal. Early-stage startups can’t usually match big-company salaries, so they must offer compelling equity stakes and intangibles to sway talent. Let’s look at what the actual data says about early-stage pay:
According to Carta’s extensive cap table data, the very first non-founder hire at a startup tends to receive about 1.5% of the company’s equity (median), vesting over four years (Carta, 2025; Techcrunch, 2024) Subsequent early hires get progressively smaller slices: the second employee’s median grant is ~0.85%, the fifth employee around 0.34% (Techcrunch, 2024).
By the time you reach hire number 6 or 7, typical equity grants are down in the 0.2–0.3% range (Techcrunch, 2024). In fact, if a founder granted exactly the median equity to each of their first 5 employees, they would have only used about 3.6% of the company in total (Carta, 2025) – a surprisingly small dilution for building an initial team.
On the cash side, startups do pay something, of course – just usually below market / established companies. A December 2024 analysis of 450+ seed-stage startups found that founders paid themselves and early executives fairly modest salaries (around $130K for CEOs and $135K for CTOs on average) (Techcrunch, 2024). Senior engineers in Bay Area startups were coming in around $180K–$235K, with entry-level engineers more like $75K–$105K (Techcrunch, 2024).
Meanwhile, non-technical early hires saw ranges such as $80K–$110K for mid-level sales roles and $100K–$175K for mid-level marketing roles in high-cost markets (Techcrunch, 2024). These figures are by no means top-of-market for experienced talent, but they’re not rock-bottom either – early employees often get slightly below big-company pay, plus that equity kicker. Startups know they must at least be in a reasonable range on base salary so folks can pay their bills.
As the data shows, the equity ownership curve drops off steeply with each hire. That’s by design: The first one or two key employees might command 1–2 %+ each, but by employee #10, the “market rate” might be well under 0.2%. Founders understandably guard their cap table – they want to preserve equity for future hires and investors. However, there’s a tension: If you under-allocate equity early on, you risk failing to attract truly top-tier talent who are motivated by ownership.
As Carta’s Head of Insights Peter Walker noted, many startups in 2024 got through their first 10 hires using less than 5% equity total, but he hopes founders will consider being more generous if they’re running ultra-lean teams (Carta, 2025). After all, if you only need half as many employees to reach a milestone (thanks to efficiency or AI), perhaps you can afford to grant a bit more ownership to each early team member to keep them incentivized (Carta, 2025).
There are ways to sweeten the equity deal beyond initial grants, too – e.g., providing refresh grants, longer option exercise windows, or even early liquidity opportunities down the road to reward those who bet on you (Carta, 2025). If you want to take an in-depth look at this, check out the Ultimate Guide to ESOP we wrote a couple of months ago.
One bright spot for founders: The current job market (post-2022) has shifted some leverage back to employers. During the 2021 talent war, startups sometimes had to dangle huge option grants to woo candidates. But by 2023, with a softer tech job market, salaries plateaued, and equity packages got smaller at many startups (Carta, 2024). In other words, candidates have been accepting offers with less negotiation power, and companies haven’t felt as pressured to make up for lower cash with extra stock.
Carta data confirms this decline – the average equity% % in new hire grants fell notably from 2021 to 2023 (Carta, 2024). While this trend can help founders conserve equity, it’s a double-edged sword: Lower equity incentives may make it harder to truly align early employees with the long-term upside.
The savviest founders use equity strategically as their trump card. For example, carving out a larger option pool (15–20% of the company) early onso they have room to grant meaningful chunks to star hires (McLoughlin, 2019).
They then emphasize how valuable that equity could become in concrete terms, e.g., discussing how an employee’s 0.5% might be worth $X at a Series A valuation, or how hitting certain milestones could increase the value of their shares (McLoughlin, 2019). Painting a line of sight from equity to personal wealth gain helps candidates appreciate the tradeoff of a lower salary.
For commercial hires like salespeople, compensation may tilt even more toward performance-based pay. Early-stage startups often lure strong sales reps by offering aggressive commission plans (even if base salary is low) (McLoughlin, 2019). The logic: A great salesperson in a startup can literally be the engine that drives revenue from $0 to $1M, so if they deliver, they should end up the highest-paid person in the company. Rich commissions or bonus accelerators can convince a sales candidate that there’s no cap on their upside – a compelling prospect if they believe in the product.
And critically, many founders wait to hire a sales leader until they have a bit of traction (a few referenceable customers) and then make that hire immediately, with a very generous comp plan . If the person truly is a “rockstar” who will “move the needle,” it’s worth the cost in equity or commission to get them on board early (McLoughlin, 2019).