We’re looking at bringing on a VP of sales, and I was thinking about providing a 0.75 – 1% equity stake with a 3 year vesting period. Is this about right? We’re pre-funding right now.
by Naomi Kokubo, Cofounder of Founders Space
Based on what I’ve seen in the past, 0.5% to 3% is typical for an experienced VP post Series A funding. Pre-funding it’s usually much higher. But it depends on what you’re paying this person. If you’re giving a full salary, then less equity is fine. Most startups pre-funding can’t afford much of a salary, so they usually compensate with higher equity. Also, the employee will be taking significant dilution upon funding, so you want their equity to be enough to motivate them both pre and post funding.
Some of it comes down to the person and how valuable he/she is. If the person is experienced and can bring a lot to the table, the pre-funding stock options should be significantly higher. But again, it’s on a case-by-case basis. A four year vesting schedule is typical.