Analyzing AngelList Job Postings, Part 2: Salary and Equity Benchmarks

Analyzing AngelList Job Postings, Part 2: Salary and Equity Benchmarks

The danger of generosity is that, especially for the first few hires, you are giving away much more equity than you need to. That equity could be used to give stronger offers to multiple candidates later on, to raise more money from investors, or to retain more decision-making power for founders. Note: These are benchmarks based on a medium-sized sample; they’re not hard-and-fast rules.

The benchmarks are for engineering jobs in Silicon Valley. For employees 2 through 13, salaries rise for higher paying jobs:

• 20th percentile salary range is $75k - $100k
• 50th percentile salary range is $85k - $125k
• 80th percentile salary range is $100k - $150k

When it comes to equity, the distribution is as follows:

• Hire 1: 2% - 3% of equity
• Hires 2 through 5: 1% - 2%
• Hires 6 and 7: 0.5% - 1%
• Hires 8 through 14: 0.4% - 0.8%
• Hires 15 through 19: 0.3% - 0.7%
• Hires 21 through 27: 0.25% - 0.6%
• Hires 28 through 34: 0.25% - 0.5%

A good way to frame these numbers is to add “up to” before each range. For example, a typical 6th hire will get up to 0.5%-1%. Designers among the first four hires get up to 1-2% equity, occasionally only 0.5%. Designers among the next 5 hires get up to 0.5% - 1.0%. 0.2% - 0.5% for employees 10-30.

These benchmarks provide a guideline for founders and hiring managers to structure their salary and equity offerings. It is important to strike a balance between being generous and ensuring long-term sustainability for the company. Giving away too much equity in the early stages can limit the company's ability to attract top talent later on or secure funding from investors. On the other hand, being too stingy with equity can lead to low employee retention and resentment among the team.

Finding the right balance requires understanding the expectations of both the company and the potential employees. If the employee's expectations are too high, it may be a sign that they are not the right fit for the company. On the other hand, if a founder exploits an employee's low expectations, it can harm long-term retention and create a negative work environment.

Incorporating Philosophy into Entrepreneurship

Philosophy isn't just an abstract intellectual exercise; it has practical implications for entrepreneurship. At its core, philosophy focuses on improving our understanding of humanity and how we evolve as individuals in society. It challenges our assumptions and helps us develop new frameworks for grappling with truth.

One common misconception about philosophy is that it provides definitive answers. Instead, philosophy's purpose is to provoke and improve our own thinking. It develops from the way philosophical ideas interact with our own minds and the way they inspire us to develop new ways of understanding the world.

A key technique in philosophy is to ask ourselves what is right and wrong about different ideas and theses. This approach helps us understand other people's perspectives and challenges our own beliefs. In entrepreneurship, this questioning mindset is crucial for innovation and problem-solving.

Aristotle, one of the great philosophers, believed in studying the material world as a starting point for philosophy. He emphasized the importance of theory and practice working together. This approach is valuable for entrepreneurs as it encourages them to develop theories and test them in practice, refining their ideas based on the results.

Nietzsche, another influential philosopher, focused on the creation of the new and the importance of individual creativity. He believed in engaging in creative destruction and constantly striving to improve ourselves. This emphasis on the individual and creativity resonates with the entrepreneurial spirit, where innovation and pushing boundaries are vital.

Wittgenstein, a philosopher known for his work on language, highlighted the significance of language in our understanding of the world. He emphasized the role of rituals and agreements in forming our identities and how we collaborate. For entrepreneurs, understanding the power of language and effective communication is essential for building high-performing teams.

Actionable Advice:

1. Find the right balance between generosity and sustainability when offering equity to employees. Consider the long-term implications and potential impact on future hiring and funding opportunities.

2. Embrace a questioning mindset and regularly challenge your own beliefs and assumptions. This mindset can lead to innovation and new perspectives in entrepreneurship.

3. Recognize the importance of effective communication and language in building a strong team. Pay attention to rituals and agreements that shape your work environment and promote collaboration.

In conclusion, analyzing job postings in terms of salary and equity benchmarks can help founders and hiring managers make informed decisions. It is important to strike a balance between generosity and sustainability to ensure long-term success. Philosophy also plays a valuable role in entrepreneurship, challenging our thinking and providing frameworks for innovation. By incorporating philosophical insights into business practices, entrepreneurs can gain a deeper understanding of humanity and create meaningful and impactful ventures.