Startups should aim to be fair and generous when building their compensation strategy. | Image Credits:Flickr

Startups have never been able to offer the same sizable salaries as big tech companies. Now with companies like Meta and OpenAI willing to pay million-dollar salaries amid the AI race — the compensation divide has grown even larger.

Early-stage startups are not doomed though. If they develop a compensation strategy that is generous, fair, and flexible, they can offer competitive compensation packages and give themselves room to adjust their approach as they grow, according to founders and experts who were onstage at TechCrunch Disrupt 2025.

Startups shouldn’t try to compete with big tech companies anyway, Yin Wu, the co-founder and CEO of equity management software Pulley, said on stage at TechCrunch Disrupt in October. She added that a stable tech company and a startup don’t generally attract the same potential candidates to begin with.

Startups should instead be as charitable as they can in their compensation packages, Wu said, regardless of their inability to match a big tech company’s paycheck.

“My pretty strong opinion when it comes to equity for a startup is that you should be more generous than what you think you should be,” Wu said. “I think it is unlikely, if the company is really successful, you’re going to look back and say, ‘man, I gave away too much equity of everyone that was at my company trying to make this company really successful.’”

Randi Jakubowitz, the head of talent at 645 Ventures, agreed. Jakubowitz added that when a startup is looking to make a competitive offer, they should set clear goals for the person they are hiring to ensure that hire lives up to the compensation they are getting.

“Make sure you’re holding them accountable and make sure that you understand what the implications are from a vesting cliff standpoint,” Jakubowitz said, regarding when employees gain control over their equity stakes. “That’s where, if you don’t move quickly if someone’s underperforming, that’s equity that you’ll never get back if they are fully vested. Make sure that there’s very clear accountability. “

The panelists also stressed that companies don’t need to get their compensation and equity strategies set in stone from the start. Startups should instead ensure their approach is fair from the beginning, so even if they do want to change, they have the proper foundation to do so without setting themselves up for legal trouble or soured office politics.

For Wu, and her company Pulley, that meant setting standards around compensation packages. Wu said the company pays a set range for each role — regardless of where a potential employee is based — and consistently builds compensation packages with equity offerings in the 90th percentile.