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

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

"The smallest viable audience"

When it comes to hiring and building a company, there are many factors to consider. One of the most important aspects is determining the right salary and equity benchmarks for the employees. In a recent analysis of AngelList job postings, it was found that these benchmarks can vary depending on the size of the company and the position being hired for.

The danger of being too generous with equity is that it can result in giving away more than necessary, especially for the first few hires. This equity could have been used to provide stronger offers to multiple candidates later on, raise more money from investors, or retain more decision-making power for founders. It is important to strike a balance between attracting top talent and preserving the company's resources.

Based on a medium-sized sample of engineering jobs in Silicon Valley, the salary ranges for employees 2 through 13 are as follows: the 20th percentile salary range is $75k - $100k, the 50th percentile salary range is $85k - $125k, and the 80th percentile salary range is $100k - $150k. As the employee number increases, the salary range tends to rise for higher paying jobs.

When it comes to equity, the percentages also vary depending on the hire number. For example, the first hire typically receives 2% - 3% of equity, while hires 2 through 5 receive 1% - 2%. As the number of hires increases, the equity percentages tend to decrease. Hires 6 and 7 receive 0.5% - 1%, hires 8 through 14 receive 0.4% - 0.8%, and so on.

It is important to note that these benchmarks are not hard-and-fast rules, but rather general guidelines based on the analyzed data. Each company and position may have unique circumstances that require adjustments to these benchmarks.

In addition to salary and equity benchmarks, it is crucial to consider the employee's expectations. Sometimes, the employee's expectations may be too high, leading to a waste of time in the interview process and potential rejection of multiple good job opportunities. On the other hand, if a founder exploits an employee with low expectations, it can result in long-term resentment and hinder retention.

Now, let's shift gears and discuss the concept of the "smallest viable audience." In today's saturated market, it is no longer enough to cater to everyone. Instead, companies must focus on identifying their target audience and creating products or services that cater specifically to them. This idea is about being the provider that people would miss if you were gone, rather than trying to appeal to everyone.

By focusing on a specific audience, companies have the opportunity to create a unique and memorable experience. This experience becomes the hook that attracts like-minded individuals who are more likely to spread the word and become loyal customers. The key is to build a great product, service, or content that brings value to people's lives and creates a connection.

Specificity is the key to success in this approach. It is not about absolute scale or reaching as many people as possible. Instead, it is about being clear about who your target audience is and what your offering is meant to accomplish. By setting a standard for producing work that people connect to and are changed by, companies can build a loyal customer base and establish themselves as a go-to provider in their niche.

In conclusion, when it comes to hiring and building a company, it is essential to consider the appropriate salary and equity benchmarks. By finding the right balance between generosity and preserving resources, companies can attract top talent while protecting their long-term interests. Additionally, focusing on the smallest viable audience allows companies to create unique and memorable experiences that resonate with their target audience. By being specific and setting high standards, companies can build a loyal customer base and establish themselves as leaders in their niche.

Actionable Advice:

1. Evaluate and adjust your salary and equity benchmarks based on the size of your company and the position being hired for. Find a balance between attracting talent and preserving resources.
2. Identify your target audience and create products or services that cater specifically to them. Focus on providing a unique and memorable experience that will resonate with your audience.
3. Set high standards for your work and strive to create content or offerings that people connect to and are changed by. This will help you build a loyal customer base and establish yourself as a leader in your niche.