How to Handle Salary Negotiations as an Early-Stage Startup

# How to Handle Salary Negotiations as an Early-Stage Startup

Early-stage startups can't win bidding wars with Big Tech. But that doesn't mean you can't hire great people. You just need to negotiate differently.

The Startup Compensation Reality

### What You're Up Against - FAANG companies paying $400K+ total comp - Late-stage startups with near-liquid equity - Established companies with stability

### What You Offer - Meaningful equity upside - Outsized impact and ownership - Faster growth and learning - Mission and adventure

Before the Negotiation

### Know Your Numbers - Budget for the role - Market rates for comparison - Equity pool and typical grants - Flexibility in structure

### Understand the Candidate - Current compensation - What they value most - Risk tolerance - Alternative options

Negotiation Strategies

### Lead with Total Story Don't start with cash. Start with: - The opportunity and impact - Equity and potential outcomes - Growth trajectory - Total value proposition

### Be Transparent About Trade-offs "We can't match Big Tech cash, but here's why people choose us anyway..."

### Find Creative Structure - Sign-on bonus vs. higher base - Equity vs. cash trade-offs - Performance bonuses - Review timeline acceleration

### Use Scenario Analysis Show equity value under different outcomes: - Conservative case - Expected case - Optimistic case

Common Negotiation Scenarios

### "I Need to Match My Current Cash" Explore why. Is it lifestyle or financial obligation? Sometimes creative structuring helps. Sometimes they're not the right fit for early stage.

### "The Equity Seems Risky" Acknowledge it. Explain your path to liquidity. Share comparable outcomes. But respect that not everyone has the risk tolerance for startups.

### "I Have a Higher Offer" Don't panic. Ask what would make them choose you. Often it's not about matching—it's about showing why your opportunity is better.

### "I Need Time to Decide" Give reasonable time (3-5 business days). Create urgency without pressure. Stay engaged but don't be pushy.

Closing the Deal

### Make It Personal Founder involvement shows commitment. Personal outreach reinforces how much you want them.

### Remove Friction Quick offer letters, clear terms, easy signing process.

### Build Conviction Address any remaining concerns. Connect them with team members. Reinforce the vision.

When to Walk Away

Not every negotiation should result in a hire. Walk away when: - Cash requirements exceed your budget significantly - They're primarily motivated by money - Cultural fit concerns emerge - The negotiation reveals problematic behavior

The best hires are excited about the opportunity, not just the compensation. Find people who want to be there, and compensation negotiations become much easier.