Team, Co-founders & Legal

As a solo founder, how much equity should I give the first employee or advisor who is helping me before I can pay a salary?

A starting point

An advisor is not a co-founder: think 0.25% to 1% on standard vesting, not 10%. An early employee working for below-market pay might get 0.5% to 2% depending on how early and how critical, always on a 4-year vest with a 1-year cliff. Be generous with cash-poor helpers but ruthless about vesting, because the person who ghosts you in month three should not walk away owning a chunk of your company.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked Read Use

Read

📄 Article
✓ Link checked Free Beginner

Why we picked it This is the empirical spine for the employee half of your answer, built on Carta data from 50,000 real cap tables, not opinion. It shows equity drops fast: hire #1 sits around 1.5% at median (0.5% to 4% range), hire #2 at 0.85%, hire #3 already near 0.5%. That anchors your 0.5% to 2% call for a genuinely early, critical below-market hire and tells you exactly how fast to shrink grants as you keep hiring.

How Much Equity to Give Your First Employees: The Real Data from 50,000 Startups

From SaaStr by Jason Lemkin 8 min read

  • Median first-hire grant is about 1.5%, but the honest working range is 0.5% to 4% depending on how early and how critical
  • Each subsequent hire drops 20% to 50%: by hire #3 you are usually below 1%
  • Every grant assumes 4-year vesting with a 1-year cliff, which is non-negotiable market standard, not a nicety
Open saastr.com →
📄 Article
✓ Link checked India Free Beginner

Why we picked it Once you have decided a key hire gets an ESOP grant and not co-founder shares, this is the India-specific playbook for actually doing it: pool sizing (5% to 15%), the mandatory one-year minimum vesting the Companies Act imposes, exercise price at fair market value, and the DPIIT-recognised-startup carve-outs. It is the practical alternative to over-granting equity, written for the Indian cap table you are actually running.

ESOPs / Employee Stock Option Plans: Structuring for Early Startups

From Razorpay Rize by Razorpay Rize 15 min read

  • Carve a 5% to 15% ESOP pool and grant a key hire from it instead of founder-level shares
  • Indian law mandates a minimum one-year gap between grant and first vesting; a four-year vest with a one-year cliff is standard
  • DPIIT-recognised startups get specific ESOP exemptions, so recognition status changes what you can grant and to whom
Open razorpay.com →

Use

🛠️ Tool
✓ Link checked Free Intermediate

Why we picked it This is the canonical, industry-standard answer to 'how much equity for an advisor', a free, ready-to-sign template used by tens of thousands of founders and advisors a year. It replaces awkward negotiation with a simple grid that maps engagement level and company stage to an equity number and vesting schedule.

The FAST Agreement (Founder / Advisor Standard Template)

From Founder Institute (fi.co) by Founder Institute short

  • Advisor equity is standardized by engagement level (standard / strategic / expert) and company stage, roughly 0.25% to 1%.
  • The template bakes in vesting (typically ~2 years) so a departing advisor doesn't keep unearned equity.
  • It removes the need for custom legal drafting: check a few boxes, sign, and start working.
  • Version 3 (2026) can be localized to jurisdictions beyond the US, including India, without hiring a lawyer.
Open fi.co →

People also ask

How should co-founders split equity fairly? For most early teams, split close to equal, an even split signals you see each other as true partners, and long-term contribution rarely matches wh... Beginner 3 resources → What is vesting and why do I need a vesting schedule? Vesting means you earn your shares over time (the standard is 4 years with a 1-year cliff) instead of owning them all on day one. It's the single m... Intermediate 3 resources → Should I use a dynamic equity split like Slicing Pie instead of fixed percentages? Dynamic models like Slicing Pie allocate equity based on actual contributions over time, which is genuinely fairer at the pre-funding grunt stage w... Advanced 3 resources → What must go into a co-founder / founders' agreement in India? Cover equity split, vesting and leaver clauses, roles and time commitment, IP assignment to the company, decision-making and deadlock resolution, a... Intermediate 3 resources → How much equity should I set aside for an ESOP pool for employees? Carve out roughly 10-15% for an option pool before you raise, so early hires get real ownership without diluting you unexpectedly later. In India, ... Advanced 3 resources → What happens to equity if a co-founder leaves early? With vesting done right, they keep only what they've earned and the unvested portion returns to the company, which is exactly why vesting exists. W... Intermediate 3 resources →