Startup software company looking for realistic stock % for employees.

[Guest grizzled]

I am currently negotiating a compensation package for our 4th (key) employee, and am looking for guidance regarding what portion of the company should be set aside for employees generally, and what portion should be awarded to early, key employees (as options). Any comments from eployees or employers would be greatly appreciated. MTIA!

[Guest nwr1972]

I am currently negotiating a compensation package for our 4th (key) employee, and am looking for guidance regarding what portion of the company should be set aside for employees generally, and what portion should be awarded to early, key employees (as options). Any comments from eployees or employers would be greatly appreciated. MTIA!

I used to work at a private equity firm and took venture capital clases at Wharton. The standard is to leave 10% - 15% of the total equity available for employees options. The options would then vest over a reasonable period of time (3-5yrs). If your already making money my preference is to not give away equity but give away a % of the profits every year. I would rather give away 20% of the profits than 10% of the company but if your not making money then a % of profits is not an incentive.

How much you allocate to each key employee depends on their role, a key exec should get more of the 10% to 15% unless its a sales VP who should mainly be compensated sales.

Just general guidlines if you have limited to no sales and your hiring a heavy hitter then you need to give away much much more.

Hope this helps.