Tim Brady - How Much Equity Should I Give My First Employees?

Startups typically allocate 10% to 20% of their equity to an employee pool, where early hires receive substantially larger grants ranging from 1% to 2% to compensate for high risk and chaotic working conditions. Founders must strategically balance cash and equity offers based on individual risk tolerance, ensuring that critical roles like an outside CEO or CTO do not prematurely deplete resources needed for future talent. Decades of Silicon Valley precedent suggest that granting generous ownership stakes to these early team members is essential for long-term engagement and maximizing the venture's chances of massive financial success.