What is the percentage of Equity for first hires? Is there a number for co-founder? What about senior employees?
How much Equity Should you give your first hire? And why should you give them?
After completing the excruciating hiring process, the new hurdle would be compensating the people enough. Also it is difficult to set a bench mark. They go beyond their job profile to get things done.
First it’s important to give them their due. Second this Equity for first hires is crucial to create a sense of belongingness. Although it’s norm to offer equity for first hires in form of ESOPs, the fix comes with percentage. Further this figure differs for senior employees and co-founders again. Needless to say, it takes some tough decision making to satisfy everyone.
In the video our mentor Pallav Nadhani helps us in gifting equity for first hires. He became a successful entrepreneur at 17 of Data Presentation Company Fusion charts. Back then he started out operations of company single handed and now employs around 100 others.
The idea of Start-up 101 series is to give a head start for budding entrepreneurs. These are basics for beginners in form of short, to the point solutions to all the probable hurdles.