Startups have historically been unable to match the high salaries offered by major tech firms. With companies like Meta and OpenAI now offering million-dollar salaries due to the AI boom, the compensation gap has widened.
However, early-stage startups are not necessarily at a disadvantage. According to founders and experts at TechCrunch Disrupt 2025, they can create competitive compensation packages by developing a compensation strategy that is generous, fair, and adaptable, allowing them to modify their approach as they expand.
Yin Wu, co-founder and CEO of equity management software Pulley, stated at TechCrunch Disrupt in October that startups shouldn’t try to compete with large tech companies in the first place. She noted that stable tech companies and startups typically attract different types of candidates.
Wu suggested that startups should be as generous as possible with their compensation packages, even if they can’t match the paychecks of large tech companies.
“My very firm belief regarding equity for startups is that you should err on the side of generosity,” Wu stated. “I doubt that if the company succeeds, you’ll regret giving away too much equity to the people who helped make it successful.”
Randi Jakubowitz, head of talent at 645 Ventures, concurred. Jakubowitz added that when a startup aims to make a competitive offer, it should establish clear goals for the new hire to ensure they justify their compensation.
“Ensure you are holding them accountable and understand the implications from a vesting cliff perspective,” Jakubowitz said, referring to when employees gain control of their equity. “If you don’t act quickly when someone is underperforming, that equity is lost if they are fully vested. Ensure there is clear accountability.”
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The panelists also emphasized that companies don’t need to finalize their compensation and equity strategies from the outset. Instead, startups should ensure their approach is fair initially, providing a solid foundation for future changes without risking legal problems or internal strife.
For Wu and Pulley, this involved setting standards for compensation packages. Wu mentioned that the company offers a fixed range for each role, regardless of the employee’s location, and consistently designs compensation packages with equity offerings in the 90th percentile.
“This framework has allowed us to grow and say, ‘as the company thrives, the actual number of shares you receive will vary based on the company’s value, but the framework remains consistent.’”
Rebecca Lee Whiting, founder of Epigram Legal and fractional general counsel, added that these standards help companies avoid potential legal issues later. For example, they prevent unequal pay among candidates of different genders, which is ethically wrong and illegal in states like California, Whiting noted.
Whiting, Wu, and Jakubowitz all agreed that as long as founders approach compensation packages with fairness in mind, adjustments and changes can be made later.
“It’s crucial to consider not just the process, but also the people you’re trying to hire and what will incentivize them to accept the offer,” Whiting said. “You don’t have to get it perfect immediately. You’ll likely need to refine it after Series B, and that’s okay. Don’t aim for perfection when hiring your first few employees.”
