# Shares vs. Salary: What Every Startup Needs to Know Before Making an Offer

> Master the startup offer. Learn how to balance cash and equity to attract top talent without draining your bank account.

- **Author:** David Verbustel
- **Category:** tmgXwfBTmoDvzx4s5EcX
- **Published:** 2026-04-01
- **Language:** en

## The Offer Conversation Most Startups Aren't Ready For
A strong candidate sits across from you. The interview went well. You're ready to make an offer. Then they ask: "Can you walk me through the equity structure?"
Most founders stumble here. Not because the offer is bad — but because they haven't prepared for the questions a well-informed candidate will ask. They don't have the cap table numbers ready. They can't explain the vesting terms clearly. They haven't thought about what the equity is actually worth at different exit scenarios.
The candidate leaves the meeting uncertain. They talk to a friend who works at a larger company. The competing offer arrives two days later. You lose them.
This happens constantly — and it has nothing to do with how much equity you're offering. It has everything to do with how prepared you are to explain it.
## Why This Matters More Than Most Founders Realise
Equity and salary aren't just compensation. They're signals. The way you handle this conversation tells a candidate everything about how you'll treat them once they're inside the company.
A candidate who understands exactly what they're being offered — and why — is far more likely to accept, stay, and perform. A candidate who feels confused or brushed off will accept the next clear offer they receive.
 💡 Quick Tip: Before any offer conversation, prepare a one-page compensation summary: base salary, equity percentage, current fully diluted share count, most recent valuation, and vesting terms. Handing this over says more about your professionalism than the numbers themselves.
## The Two Things You're Actually Offering
Every startup compensation package has two components. Candidates evaluate both — and the most informed ones evaluate them very differently.
Salary is certain. It pays rent, funds savings, and doesn't depend on anything going right. Candidates who are risk-averse, supporting families, or coming from stable corporate environments weight this heavily.
Equity is a bet. It's a share of something that doesn't exist in its final form yet. It could be worth ten times the salary — or nothing. Candidates who understand this bet correctly evaluate the odds. Many don't, which is actually a problem for you: a candidate who accepts low salary based on inflated equity expectations will eventually do the math and feel misled.
 ⚠️ Warning: Never let equity do the work that salary should do. If the salary is genuinely below what the candidate needs to live comfortably, equity won't compensate for that stress long-term. You'll get resentment, disengagement, or an early departure — none of which is what you're hiring for.
The right mix depends on stage, role, and the individual. But the goal is always the same: an offer the candidate can understand, evaluate honestly, and say yes to without regret.
## How Much Equity Is Actually Normal
This is where preparation pays off most. Candidates research this. They'll have looked at databases before they walk in. If your numbers are wildly out of range in either direction, they'll know — and they'll wonder why.
### By Hire Number
The eightfold spread at hire #1 alone shows how context-dependent this is. A first engineering hire at pre-revenue pre-seed is a completely different conversation from the same title at post-Series A.
### By Stage
📊 STAT CALLOUT:
- Pre-seed / Seed: Senior technical hire: 0.5%–2.0%

- Series A: VP-level: 0.25%–1.0%. Senior IC: 0.1%–0.5%

- Series B+: Individual contributors typically receive 0.05%–0.2% Source: Carta H1 2025 / SeedLegals / Mercury


### By Role — A Practical Reference
 ✅ Best Practice: Before making any offer, check Carta's compensation data and TopStartups.io for current market rates in your specific stage and sector. An offer based on two-year-old benchmarks in a shifted market signals that you haven't done your homework.
## What Candidates Are Privately Thinking
Here's the information that most founders never get to hear — because candidates don't say it out loud, they just decline the offer.
They're calculating the real value. A prepared candidate will take your equity percentage, multiply it by the last-round valuation, then mentally apply a heavy discount for the probability of a real exit. If that number doesn't feel meaningful relative to the salary gap, they'll ask for more salary or walk.
They're Googling your cap table. They can't see it directly, but they'll look for press coverage of your funding rounds, estimate your post-money valuation, and work backwards. If your equity offer doesn't add up against publicly available data, they'll notice.
They're checking the exercise window. More candidates than you'd expect now know to ask: "How long do I have to exercise my options after I leave?" The standard is 90 days. If yours is shorter, or if you haven't thought about it, that's a flag.
They're asking about dilution. A candidate who asks "what happens to my percentage after your next raise?" is a good candidate. Be ready to explain how dilution works, what the expected option pool top-up looks like, and roughly what their stake might look like at a typical exit scenario.
 💡 Quick Tip: Prepare a simple one-page "equity explainer" that shows: current valuation, your option pool size, what the candidate's percentage represents in shares, and a rough scenario table (e.g., "if we exit at €50M, €100M, €200M, here's what your stake is worth before tax"). Candidates who receive this are far more likely to accept — because they feel respected enough to be given the information to decide.
## Structuring the Offer: The Details That Signal Professionalism
The percentage is just the headline. How the equity is structured underneath matters just as much — and a well-structured offer from a company offering less equity will often win over a poorly structured offer with more.
### Vesting Schedule
The standard is four years with a one-year cliff. This is what candidates expect. Deviating without a clear reason creates friction.
- The cliff means they earn nothing if they leave in year one

- After 12 months, 25% vests at once

- The remaining 75% vests monthly over the following three years


 ✅ Best Practice: If you're offering a shorter vesting schedule to attract someone, think carefully. It can work — but signal it as a deliberate choice ("we believe in getting equity into your hands faster") rather than leaving the candidate to wonder why it's unusual.
### Exercise Window
This is the amount of time a departing employee has to buy their vested shares. The standard is 90 days. The problem: 90 days is often not enough time for someone to afford the exercise cost or manage the tax implications.
A growing number of well-regarded startups now offer 5–10 year exercise windows. It costs you nothing but goodwill — and it's become a meaningful differentiator in competitive hiring.
✅ Best Practice: At minimum, explain the exercise window clearly in the offer letter. If you can offer more than 90 days, do it. It signals that you want employees to actually benefit from the equity they earned.
### Acceleration on Acquisition
Acceleration means vested equity speeds up under certain conditions — usually if the company is acquired. Without it, an employee who joined two years ago still has half their equity unvested when the company sells. That's a bad outcome for them, and a retention risk for you beforehand.
Single-trigger acceleration (on acquisition alone) is the most employee-friendly. Double-trigger (acquisition plus termination) is more common and a fair middle ground.
 ⚠️ Warning: Not having any acceleration clause at all is increasingly seen by candidates as a red flag. It suggests either that you haven't thought about exit scenarios, or that you're structuring things in your favour at their expense. Either way, it damages trust in the conversation.
## Getting the Salary Side Right Too
Equity is the conversation everyone focuses on. Salary is the one that determines whether you can close.
Candidates will benchmark your salary offer against their current role, against competing offers, and against public salary data. If you're more than 15–20% below market on salary, you need meaningful equity to bridge the gap — and you need to be able to explain that bridge clearly.
 ✅ Best Practice: Calculate the "salary discount" — the gap between your offer and the candidate's market rate. That gap is the implicit price they're paying for the equity. If you can articulate what that equity is worth at different exit scenarios, candidates can make an informed decision. If you can't, they'll assume the equity is worth less than the discount.
 💡 Quick Tip: If you genuinely can't move on salary, offer clarity on when that changes — a specific milestone, a funding round, a revenue target. "We can revisit salary at Series A" is far more credible than a vague "as we grow." Candidates who trust the roadmap are more willing to take the shorter-term trade.
## The Belgian Context: What Founders Here Must Know
If you're a Belgian startup offering equity, there is one critical difference from how this works everywhere else — and not knowing it can seriously damage the relationship with a new hire before it's even started.
### Tax at Grant: The Belgian Regime
In most countries, employees pay tax on equity when they sell shares. In Belgium, stock options are typically taxed at the moment of the offer — before anything has vested, before the shares can be sold, and even before the options are exercised.
The employee has a 60-day window after the offer to accept or decline the options. If they accept, the tax obligation is triggered. A candidate who doesn't understand this — and finds out later — will feel blindsided. That's a trust problem that starts at day one.
 ✅ Best Practice: For every equity offer made in Belgium, include a plain-language explanation of the tax-at-grant regime, the 60-day acceptance window, and a recommendation to seek personal tax advice before accepting. This is not standard practice — but it should be, and it immediately signals that you're a founder who operates with transparency.
### The Law Is Changing
EY Belgium has flagged that the government intends to reform the stock option law and build a clearer framework for equity incentives. Belgian founders making equity offers in 2025 or 2026 should work with a specialist advisor — both to structure offers correctly and to stay ahead of changes that may affect existing agreements.
 ⚠️ Warning: Structuring equity in Belgium without legal guidance isn't just risky for you — it can create unexpected obligations for your employees. A single consultation with a lawyer familiar with Belgian stock option law can prevent years of complexity.
## What Makes You Look Unprepared — And How to Fix It
Candidates don't always say why they declined. Here are the most common signals that erode confidence in an equity offer, and what to do about each one.
You can't tell them the fully diluted share count. Fix: Know this number before every offer conversation. It's on your cap table.
You can't explain what happens to their stake after the next raise. Fix: Prepare a simple dilution model — a one-page spreadsheet showing expected ownership after one and two future rounds.
The equity percentage changes between the verbal offer and the written one. Fix: Never give verbal equity numbers you haven't confirmed. Even a small discrepancy creates doubt about everything.
You describe equity as "potentially worth millions" without any numbers. Fix: Show the math. Real projections — even rough ones — are worth more than vague optimism.
You haven't thought about the exercise window. Fix: Decide your policy before you're in the room. Then explain it proactively.
✅ Best Practice: Run your offer through this checklist before presenting it:
- Current fully diluted share count

- Most recent post-money valuation

- Vesting schedule and cliff terms, in plain language

- Exercise window after departure

- Acceleration provision (or clear statement that there is none)

- Estimated value at two or three exit scenarios

- Belgian tax-at-grant explanation (if applicable) A candidate who receives all of this upfront will be far easier to close — and far less likely to regret accepting.


## How to Run the Actual Conversation
Most founders either overpromise or underprepare. The best version of this conversation is honest, specific, and calm.
Lead with the salary. Get that agreed first — it's the part the candidate can act on today. Once salary is settled, move to equity as the upside layer.
Explain the equity in plain numbers, not percentages. "You'll receive options representing 0.4% of the company. Based on our current post-money valuation of €8 million, that's a theoretical value today of €32,000 — before dilution from future rounds."
Walk through a scenario table. "If we exit at €50M, your stake — assuming one more round of dilution — is roughly worth €120,000 before tax. At €150M, roughly €360,000." Real numbers change the conversation entirely.
Invite questions and answer them honestly. A candidate who asks hard questions about equity is the candidate you want. Answer fully. If you don't know something, say so — and get back to them.
 💡 Quick Tip: At the end of the equity conversation, ask: "Does this make sense, and do you feel like you have everything you need to make a decision?" Candidates who feel respected and informed move faster. Those who feel uncertain stall, shop around, or say no.
## Frequently Asked Questions
Should we offer more equity to avoid paying market salary? Only if the candidate accepts the trade knowingly and willingly, the salary is still liveable, and the equity is genuinely meaningful at realistic exit scenarios. If you're using equity to paper over a salary you know is too low, the candidate will figure that out — and leave.
What's a fair salary cut for equity at seed stage? The commonly used benchmark: 10–20% below market for seed-stage roles with meaningful equity. Beyond 20%, the equity needs to be substantially above-market in size. At Series B+, any significant discount is harder to justify.
What if a candidate pushes back on the equity percentage? First, understand whether they're pushing on the percentage or the value. If they want a higher percentage, ask what benchmark they're using — then compare it with yours. Often it's a framing issue, not a real gap. If they want higher value, explore whether a larger grant or a refresh schedule bridges it.
Do we have to offer equity at all? No. Some early-stage companies offer cash-only. But in a competitive talent market, no equity offering signals either that you don't believe the equity will be worth anything, or that you don't want to share the upside. Both are hard signals for ambitious candidates to ignore.
What is a refresh grant, and should we offer one? A refresh grant is additional equity offered after a period of time — usually tied to performance or the end of a vesting cycle. Companies offering performance-based refresh grants nearly doubled in 2024. For hires who join early and stay long, it's one of the most powerful retention tools available.
How do we handle advisors vs. employees? Differently. Advisor equity is smaller — typically 0.1%–0.25% at seed, with shorter vesting periods (often 1–2 years). If someone is asking for 1%+ as an advisor with no operational role, that's a red flag worth pushing back on.
## The Bottom Line
The best startup compensation packages aren't the most generous ones. They're the clearest ones.
Candidates who understand exactly what they're being offered — the salary, the equity, the structure, the realistic scenarios — make better decisions. They join for the right reasons, stay longer, and contribute more. That's a direct result of how prepared you were before you walked into the room.
The equity conversation isn't a negotiation to win. It's a trust-building moment. Come prepared with the numbers, explain the structure clearly, acknowledge the uncertainty honestly, and give candidates the information they need to say yes without regret.
The founders who do this well don't just close more offers. They build better teams.

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*Source: [Joobs.be](https://joobs.be/en/blog/shares-vs-salary-what-every-startup-needs-to-know-before-making-an-offer)*