The competition for skilled talent in tech has always been fierce, but the recent surge in AI-driven roles has pushed established players like Meta and OpenAI to offer jaw-dropping salaries – sometimes even millions of dollars. This intensifies the pressure on startups, who traditionally can’t compete with these hefty paychecks. But don’t despair! While directly matching big tech’s compensation packages might be unrealistic for many early-stage companies, there are smart strategies that can help startups attract and retain top talent.
Experts gathered at TechCrunch Disrupt 2025 offered some key insights. Instead of trying to win a salary war they can’t afford, startups should focus on crafting compensation packages that are generous, fair, and flexible. This approach not only acknowledges the realities of startup funding but also sets the stage for growth as companies evolve.
“Startups shouldn’t aim to mirror big tech,” advised Yin Wu, co-founder and CEO of Pulley, an equity management software company. “The pool of candidates attracted by a stable corporation differs significantly from those seeking out the dynamic environment of a startup.”
Wu advocates for maximum generosity when it comes to equity – more than founders might initially think necessary. “When building a successful company,” she posits, “you’re unlikely to regret offering a robust equity package to your team.”
Randi Jakubowitz, head of talent at 645 Ventures, emphasizes the importance of setting clear performance expectations for each hire to ensure that their compensation aligns with tangible contributions. She cautions against overlooking vesting schedules – the timeframe when employees gain full control over their equity stakes – which can have significant financial implications for startups if underperformance goes unchecked.
Building a Flexible Framework
The experts stressed that startups shouldn’t treat their compensation and equity strategies as rigid, set-in-stone blueprints from day one. Instead, they should prioritize fairness from the outset to build a solid foundation for future adjustments without encountering legal hurdles or internal discord.
Pulley’s approach illustrates this principle. They establish clear salary ranges for each role, regardless of location, and consistently structure compensation packages with equity offerings that typically land in the 90th percentile. Wu explains: “This framework allows us to adapt as our company grows. While the actual number of shares awarded may change due to fluctuating company valuations, the fundamental fairness remains constant.”
Rebecca Lee Whiting, founder of Epigram Legal and fractional general counsel, highlights the legal ramifications of inconsistent compensation practices. Equal pay for equal work is not only ethically sound but also legally required in many states like California. Establishing transparent standards upfront helps startups avoid potential pitfalls down the line.
Adaptability and Continuous Improvement
Whiting, Wu, and Jakubowitz all agree that a foundation built on fair intentions allows for future adjustments as needed.
“Don’t obsess over perfection from the start,” Whiting advises. “You might need to fine-tune things after your Series B funding round, but remember, acknowledging this is perfectly acceptable.” The key is to understand the motivations of the talent you want to attract and tailor compensation accordingly.
Startups that prioritize fairness and flexibility in their compensation strategies can successfully navigate the competitive landscape and build strong teams without having to match the astronomical salaries offered by tech giants.
