Article · 12 min read

Equity for Early Employees (with Elizabeth Yin)

Elizabeth Yin · Hustle Fund Free Beginner

This is the single clearest articulation of the exact call you are making: equity is a counterbalance to risk, and someone taking little salary at the true zero stage (Employee #1 at effectively 10%, four-year vest) is functionally a co-founder, while a market-rate hire after you have raised belongs in the 0.1% to 5% band. It hands you concrete numbers to argue yourself out of giving away a third of the company for a role that is really a senior hire.

• Price equity against the cash and risk the person is actually giving up, not against a title or a gut feeling
• A pre-funding first hire on near-zero salary is basically a co-founder (up to ~10%); a post-raise hire on market pay is a 0.1% to 5% employee
• Vest everything over four years with a one-year cliff so the grant tracks contribution, not the handshake