Carta Compensation

 View Only

Ask Me Anything - Compensation

  • 1.  Ask Me Anything - Compensation

    Posted 04-25-2024 10:03

    Hi everyone, I'm Josh Steinfeld and I lead product strategy for Carta Total Compensation (CTC). CTC is Carta's compensation benchmarking and communications tool for startups. Our salary and equity benchmarks are built off of the largest private market data set and give us unique insight into the compensation landscape facing startups.

    Prior to joining Carta I spent about 20 years as a compensation professional - first as a consultant for WTW (Towers Perrin when I first joined) and then joining Google's compensation team. While I was at Google I led the day-to-day comp for YouTube, Google's G&A functions, Area 120 (Google's former internal incubator), and their investment funds (GV, CapitalG, Gradient Ventures).

    Looking forward to today's AMA and seeing what's on everybody's mind. Let's get started!

    #CartaTotalCompensation #AskanExpert 

    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 2.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:10

    Hi Josh, thanks for hosting but I'm a little confused whether we are supposed to be posting questions as a comment here or whether we need to reply to the discussion thread.

    Anyways, I wanted to ask how founders should set their own salaries. I know that all else equal, investors want to see founders take little to no salary to preserve cash and also signal commitment, but founders also have life and family expenses and may have put all of their savings into the business as well. 

    If I could edit my post to add a second question, what is the typical amount of equity given out to advisors and what is the maximum amount you have seen? If it's a super senior and experienced former government official, what would be the maximum level of equity you would advise providing this advisor? (Understand this is highly context dependent but some ranges would be helpful.)

    ------------------------------
    Daniel Ahn
    ------------------------------



  • 3.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:13

    No worries Daniel...I'll answer them wherever I can find them!

    To your question we do see Founders taking salaries, though they are typically below what a hired CEO would be paid (especially early on). In talking to investors, you can make this a data driven conversation. There are benchmarks for Founder salaries (we have them in CTC) so I'd recommend sharing benchmarks but also squaring that with any financial plan or budget that you may have shared.



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 4.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:12

    @Indrajit Sen asked in the event comments: 

    I wanted to ask about the Draw Against Commission compensation model.

    - Is it common or appropriate for a startup cofounder? 

    - The cofounder will have a combined responsibility of operating (contracts, accounting, tax, hiring) the company and also growing the business (sales, biz dev, account management, partnership). What would be a reasonable commission model and a salary for the cofounder?

    - Does Draw Against Commission model cause lack of motivation or trust for the cofounder?



    ------------------------------
    Brent Devey
    ------------------------------



  • 5.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:15

    Good question. To be honest I'm more familiar with this type of model for pure sales roles vs. a Founder. I'd actually point back to my first answer. There are benchmarks around how much a Founder is to be paid, but you can then structure that level of comp in a way that works for both the Founder and investors. I'm not sure there are any specific benchmarks on a specific commission model though



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 6.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:20

    Thanks @Josh Steinfeld. One more question if I may (also modified my first posting), what is the typical amount of equity given out to advisors and what is the maximum amount you have seen? If it's a highly distinguished and experienced former government official, what would be the maximum level of equity you would advise providing this advisor? (Understand this is highly context dependent but some ranges would be helpful.)



    ------------------------------
    Daniel Ahn
    ------------------------------



  • 7.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:23

    For pre-seed companies, the median advisor grant is about 0.25%. The 90th percentile is 1.00% so we do see a pretty wide range based on the factors you describe.



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 8.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:29

    We now have a few employees that have worked with us for 1-3 years. We've started talking about how we can retain their talent and avoid turnover as much as possible. Do you have any insights on best practices when it comes to refresh grants?



    ------------------------------
    Jason Eliason
    ------------------------------



  • 9.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:31

    We just published a great article with some best practices and data around refresh grants. You can check it out here.



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 10.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:36

    Very helpful! Thanks



    ------------------------------
    Jason Eliason
    ------------------------------



  • 11.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:45

    With your unique position at Carta, what are some of the overall compensation data trends that you're currently seeing? 



    ------------------------------
    Brent Devey
    ------------------------------



  • 12.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:49

    The most striking trend that we've seen over the last year or so has been the reduction in the size of equity grants that companies are giving new hires. Lots of companies were going way outside of their typical grant ranges to bring in talent during 2021 and much of 2022. But at VC funding dried up and hiring slowed, companies were much more conservative on grants to new hires in an effort to manage their equity runways. We're just now starting to see both salary and equity benchmarks starting to grow again, but I'm not sure we'll see the market run as hot as it was just a couple of years ago.



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 13.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 10:50

    I should add that my colleague Kevin Dowd just published a great piece on the changing nature of equity comp.



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 14.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 11:04

    Ok, thanks for the questions everyone. We're always posting new data and content on Carta's blog and the Carta Classroom.

    If you'd like to learn more about Carta Total Compensation, you can start here.

    Have a great day!



    ------------------------------
    Josh Steinfeld
    ------------------------------



  • 15.  RE: Ask Me Anything - Compensation

    Posted 04-25-2024 11:23

    Thanks so much for hosting today, Josh! You're such a great resource and we appreciate the expertise that you shared with us. 

    Thank you all for the questions and great discussion! 



    ------------------------------
    Brent Devey
    ------------------------------