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

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 next 5 hires get up to 0.5% - 1.0%. 0.2% - 0.5% for employees #10-30.

The employee’s expectations are too high. In this case, the interview process is likely a waste of time, and the employee is likely to pass on multiple good job opportunities before realizing they have unrealistic expectations.

The employee’s expectations are too low. If a founder exploits this, it hurts long-term retention and builds long-term resentment among employees.