I would've been employee #22 at the company. I also worked at another startup - 0.1% for employee #13. That may have been low-balled a bit because I was straight out of high school.

I've heard that the options pool is usually about 20% of the company, the first hire gets about 2.5%, and then it decreases exponentially from there. So the second hire might get 1.5%, the third 1%, the tenth about 0.2%, the 20th 0.01% (perhaps a bit higher; it seemed low to me too, which is why I didn't take the job), and on down. If you gave 2% to each of the first 10 employees, the options pool would be exhausted right there.

Of course, the company is hopefully growing all this time. But if you're employee #20 or even #10 and the company is profitable, they may be heading for a liquidity event soon, in which case there's not much time for growth.

My current situation - no equity at all - is atypical, because it's a bootstrapped startup and the founder really wants to maintain control. IMHO it's probably a mistake - I know I'd work a whole lot harder if I had equity. But I get a decent salary, and it's really the founder's call...

I downmodded you by mistake because of my fat fingers on this iPhone. I guess either I need to zoom in next time or Paul needs bigger buttons. :)

I upmodded to compensate :).

[pg: Anyway, why is it that you can't correct your mistakes/change your mind when voting? I think reddit's way of marking your current vote with colored arrows, which you can click again if you change your mind, is better (you may prefer to use shades of grey, or the YComb orange color for the 'chosen' arrow.)]

It doesn't sound TOO unusual. Facebook apparently is the next Google, and there is no shortage of news about projects being started by ex-facebook engineers. Why would they leave, unless their equity package was pathetic?

The 20% set aside is usually reserved for "key hires" which is assumed to mean a flotilla of VP level people. If you follow the standard Silicon Valley VC-backed startup script, this means the VP of Product, the VP of Product management, the VP of Operations, and so forth. After the A round, engineers are usually looking at an equity maximum of 0.25-0.5%.

"be aware that founders get rich, late-stage employees get paid, and early-stage employees get screwed" is a great maxim. Unless your company is truly on track for a $1B acquisition or IPO, you are not going to be able to buy a house with an early-stage engineer's equity.

Oh, and... eventually you need to know C++, anyway. How it works these days is: employee #9 makes the site in Rails, or Python, or PHP. She makes $70K a year and 0.25% of the company. Eventually, she burns out and goes backpacking in Thailand for a year. Everything tips over, and you need to hire employees 30 and 31. They get paid $170K a year with no equity, cuz they are the only ones who know how to make it all work fast in C++.

Of course, employees #1 and #2 wrote the cool algorithm in Python, hired some other people to do the boring stuff, then let those people argue about Java on message forums while they argue about who gets the "California King" sized bed in the jumbo-jet. ;-)

> ...eventually you need to know C++...

Why? I'd rather be the Python guy in that scenario :-)

So what is the typical % for employee # < 10 ? I know that there will be variance depending on the employee and the employer so I am asking about the average range.

The common setup is like this: 1) 1/3 equity for co-founders, 2) 1/3 equity for investors, 3) 1/3 equity for employees.

Early employees should get the highest bit, and it should drop off sharply after. Depending on the size of the company, you should look for 1-3% if you're under 10, vested over 1-2 years. That's assuming the company is small and plans to exit within a year or two.

A lot of people will probably say 1-3% is a huge amount of equity, even for an employee #10, but I've seen what happens when you don't give good equity to the earliest employees. I'm the type of person who would rather give more equity in order to keep people pretty focused. It probably depends on your opportunity costs, your experience, and how replaceable you are.

I've been in startups where the equity was really low, and the employees will figure out they're being exploited. The rest is history.