What should you pay your first engineer, CTO, or Head of Sales? Get startup-stage salary ranges and equity norms for EU and US markets — instantly.
Equity shown as % of fully-diluted shares at time of grant. Typical 4-year vesting with 1-year cliff. Seed-stage grants are diluted ~50-60% by Series A.
Hiring at a startup is categorically different from hiring at a corporation. Enterprise salary benchmarks from platforms like Glassdoor or LinkedIn are calibrated to large organizations with stable headcount, HR departments, and established compensation bands. A pre-seed founder using those numbers will either over-pay and destroy runway, or under-pay and lose candidates to better-resourced competitors. Startup compensation requires a different framework — one that accounts for funding stage, equity dilution, market geography, and the risk premium a candidate accepts by joining early.
The core principle is total compensation: cash plus equity plus the implied value of the company's trajectory. Early employees at high-growth startups regularly earn less cash than market rate, compensated by equity that could be worth multiples of the salary gap if the company succeeds. Understanding how to model this trade-off — and communicate it clearly to candidates — is a core hiring skill for founders.
At pre-seed, most compensation is heavily equity-weighted. Founding team members often take 0–40% of market-rate salaries in exchange for 1–5% equity stakes. First hires (employees 1–5) typically receive 0.25–1% equity with below-market cash. By seed stage, cash compensation closes toward 60–80% of market with equity grants of 0.1–0.5% for key roles. At Series A and beyond, cash reaches near-market levels with equity grants becoming smaller percentages but higher absolute values given the company's increased valuation.
Geography compounds this further. A senior engineer in Berlin commands roughly €75,000–€95,000 base at seed stage. The same role in London ranges £85,000–£110,000. In San Francisco, $140,000–$180,000. These gaps are not arbitrary — they reflect local cost of living, talent market depth, and the competing offers a candidate has on the table. EU-based startups hiring remotely must decide whether to pay local rates, home-office rates, or a blended policy, and communicate that policy transparently.
A Berlin startup raises a €1.5M seed round at a €6M pre-money valuation. They want to hire a Head of Product with 5–8 years experience. Market rate for this role in Berlin is approximately €85,000–€100,000. At seed stage, a realistic offer might be: €72,000 cash + 0.3% equity (vesting over 4 years with a 1-year cliff).
The candidate models the equity: 0.3% of €6M post-money = €18,000 current paper value. At a 10x exit (€60M), that's €180,000 — equivalent to about 2.5 additional years of salary over 4 years of vesting. The cash discount of ~€13,000–€28,000 per year is the risk premium the candidate pays for that upside. Whether this is attractive depends entirely on the candidate's personal risk tolerance and their conviction in the company's trajectory.
Employee #1–3 at pre-seed typically receives 0.5–1.5% equity, with senior technical roles at the higher end. By seed stage, this compresses to 0.25–0.75% for equivalent seniority, reflecting the reduced risk of joining a funded company. Options are standard for employees; restrict stock units (RSUs) appear more commonly at later stages. All grants should include a 4-year vest with 1-year cliff as the default structure.
Paying significantly below market rate is a short-term cash optimization with long-term talent risk. Candidates who accept large cash discounts often revisit the decision as their vesting cliff approaches and competing offers appear. A safer approach is to benchmark at 70–85% of market rate for senior hires, compensate with meaningful equity, and be explicit about the trade-off during the hiring process. Candidates who accept those terms tend to be genuinely aligned with the company's mission rather than financially pressured into the role.
A new funding round is an appropriate moment to adjust compensation toward market rate. Build a compensation review into your post-close roadmap alongside hiring plans. Early employees who accepted large cash discounts often expect meaningful increases at Series A; having a clear, transparent policy avoids resentment and attrition during the period when you most need team stability.
A founding CTO at pre-seed typically draws €0–€50,000 depending on personal financial situation, with equity stakes of 10–30% depending on co-founder agreements. Once seed-funded, a fair range is €50,000–€75,000 in Berlin/Munich, with the gap to market rate reflected in founder equity already held. At Series A with 10+ person engineering teams, CTO compensation typically aligns with senior engineering management market rates of €100,000–€140,000 in major EU tech hubs.