Startups have never been able to offer the same big salaries as big tech companies. Now with companies like After and OpenAI willing to pay million-dollar salaries amid the AI race — the compensation gap has grown even wider.
However, early-stage startups are not doomed. If they develop a compensation strategy that’s generous, fair and flexible, they can offer competitive compensation packages and give themselves room to adjust their approach as they grow, according to founders and experts on stage at TechCrunch Disrupt 2025.
Startups shouldn’t be trying to compete with big tech companies anyway, Yin Wu, the co-founder and CEO of stock management software Pulley, said on stage at TechCrunch Disrupt in October. He added that an established tech company and a startup generally don’t attract the same potential candidates in the first place.
Instead, startups should be as charitable as possible in their compensation packages, Wu said, regardless of their inability to match the salary of a big tech company.
“My very strong opinion when it comes to equity for a startup is that you have to be more generous than you think you have to be,” Wu said. “I think it’s unlikely, if the company is really successful, that you’re going to look back and say, ‘man, I gave a lot of equity from everybody who was in my company trying to make this company really successful.’
Randi Jakubowitz, chief talent officer at 645 Ventures, agreed. Jakubowitz added that when a startup wants to make a competitive bid, it should set clear goals for the person it’s hiring to make sure the hire matches the compensation it’s getting.
“Make sure you hold them accountable and make sure you understand what the consequences are in terms of the vesting cliff,” Jakubowitz said, regarding when employees gain control of their stock. “There, if you don’t move quickly if someone underperforms, that’s equity that you’ll never get if it’s fully vested. Make sure there’s very clear accountability.”
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The panelists also emphasized that companies do not need to define their compensation and equity strategies from scratch. Instead, startups should ensure that their approach is fair from the start, so even if they want to change, they have the right foundation to do so without running into legal trouble or bringing in the heat of office politics.
For Wu and her company Pulley, that meant setting standards around compensation packages. Wu said the company pays a set range for each role — regardless of where a potential employee is based — and consistently creates compensation packages with stock offers in the 90th percentile.
“Having that framework allowed us to be able to grow and say ‘great, as the company continues to do well, the actual number of shares you get will vary because the value of the companies are different, but that framework still applies.’
Rebecca Lee Whiting, founder of Epigram Legal and fractional general counsel, added that having these standards in place will help companies avoid potential legal pitfalls down the line. For example, it helps companies avoid offering unequal pay between candidates of different genders — something all companies should ethically try to avoid — but it’s also illegal in states like California, Whiting noted.
Whiting, Wu and Jakubowitz agreed that as long as founders approach creating their compensation packages with fair intentions, everything else can be adjusted or changed afterward.
“I think it’s really important to think about not just that process. Think about who are the people you’re trying to hire and what will motivate them to take that offer,” Whiting said. “It’s not something you have to get right out of the gate. You should probably clean up after Series B and recognize that it’s OK. But don’t try to get it perfect out of the gate when you hire your first people.”
