Article · 20 min read

What Early Stage Founders Should Know About Comp: The Rules To Break (And A Few You Should Actually Follow)

Kaitlyn Knopp (Pequity), via First Round Review · First Round Review Free Intermediate

The discipline half of the answer. When cash is tight the reflex is to over-give equity to close the gap, and this piece pushes back hard: you have more leverage than you think, and your first ten hires together should not blow past a roughly 10 percent pool. It gives you a defensible comp philosophy to state out loud instead of negotiating equity ad hoc per candidate, which is what breeds the resentment the answer warns about.

• Do not paper over a low salary with runaway equity: keep the first ten hires inside a disciplined pool (around 10 percent total).
• Define a comp philosophy before you start hiring so every offer is consistent and defensible, not reverse-engineered per candidate.
• Contract-to-hire is now acceptable to strong talent and can bridge a cash gap without permanently underpaying.