What's a competitive offer for this role?

Vesting & cliffs

The standard vesting schedule is 4 years with a 1-year cliff. This means no equity vests until the employee's first anniversary, at which point 25% vests immediately. The remaining 75% vests monthly over the next 3 years.

The cliff protects you from granting equity to short-tenure hires. Some founders offer 3-year vesting or accelerated schedules for senior hires — but the 4-year standard is well-understood by candidates and investors alike.

How dilution works

Every time you raise a round, existing shareholders get diluted. A 0.5% grant at seed might become 0.35% after a Series A that creates 30% new shares. This is normal and expected.

When communicating equity to candidates, be transparent about the current share count and what dilution they should expect. Sophisticated candidates will model this — it's better to address it upfront than have it surface during negotiation.

Comp philosophy by stage

Pre-seed / Seed: Below-market cash, above-market equity. You're asking people to bet on the vision. Equity is your edge.

Series A: Cash approaches market rate. Equity grants shrink in percentage but grow in dollar value as valuation increases.

Series B+: Cash is at or above market. Equity packages compete with public-company RSUs. Retention grants and refreshers become important tools.

ISOs vs. NSOs

Incentive Stock Options (ISOs) get favorable tax treatment — employees pay capital gains tax instead of income tax if they hold shares for 1+ year after exercise. ISOs are only available to employees, not contractors.

Non-Qualified Stock Options (NSOs) are taxed as ordinary income on the spread at exercise. They're simpler but less tax-efficient. Many companies use ISOs up to the $100K annual limit, then NSOs beyond that.

409A valuations

Your 409A valuation (fair market value) determines the strike price of options. A lower 409A means a lower strike price, which means more upside for employees. You're required to get a new 409A after each priced round or material event.

The spread between the 409A and preferred price is your employees' built-in upside. Early-stage companies typically have 409As at 25-35% of the last preferred price.

Negotiation tips

Lead with the total comp story, not just the salary number. Frame equity in dollar terms using your latest valuation — "0.1% sounds small, but that's $80K/year at our current valuation, before any growth."

Be prepared to flex on either cash or equity, but not both. If a candidate needs more cash, reduce equity proportionally. Keep your comp bands consistent to avoid internal equity issues as you scale.