1. Equity ranges by stage
Always express equity as a percentage of fully diluted shares, not a raw option count. These are 2026 market ranges for a true founding engineer (first 1–3 engineering hires):
| Stage when they join | Equity range | Notes |
|---|---|---|
| Pre-seed (first eng hire) | 0.5% – 2.0% | Highest range; you're trading cash risk for ownership |
| Seed | 0.3% – 1.0% | Still meaningful; product/market signal reduces risk |
| Post-seed / pre-Series A | 0.2% – 0.5% | Lower equity, higher base as the company de-risks |
| Series A+ | 0.1% – 0.3% | "Founding engineer" title fades into senior/staff roles |
2. Vesting, cliff & acceleration
- •4-year vest, 1-year cliff — the market standard. 25% vests at the 1-year mark, then monthly for 36 months.
- •Extended exercise window — offer 7–10 years post-termination instead of the default 90 days. Low cost to you, huge signal to senior candidates.
- •Acceleration — consider single- or double-trigger acceleration on acquisition for a genuine founding hire.
- •Early exercise / 83(b) — if you allow early exercise, remind them the 83(b) election must be filed within 30 days (their tax decision, not advice from you).
3. Salary bands & the cash/equity menu
Founding engineers usually trade some cash for equity, but "exposure" isn't a salary. A practical 2026 US range for a senior founding engineer is roughly $130K–$190K base depending on stage and location, paired with the equity above. The move that closes offers: present a menu anchored to one target, and let them pick their risk level.
Option A — higher cash
Top of the salary band, lower end of the equity range.
Option B — higher equity
Lower base, top of the equity range. For believers who want maximum upside.
4. Offer-letter skeleton (copy-paste)
Not legal or tax advice — have counsel review your option plan and grant docs.
Get the editable version (Google Doc + offer letter)
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Frequently asked questions
How much equity should a founding engineer get?
For the first engineering hire at a pre-seed startup, 0.5–2% is the typical range, dropping toward 0.3–1% at seed and 0.1–0.3% by Series A. The exact number depends on how early they join, whether they take a below-market salary, their seniority, and how critical they are to the build. Always express it as a percentage of fully diluted shares, not just a share count.
What vesting schedule is standard for founding engineers?
Four-year vesting with a one-year cliff is the market standard: nothing vests until the one-year mark (then 25% vests at once), and the remainder vests monthly over the following three years. Some startups add a small acceleration clause (single- or double-trigger) for acquisition scenarios — worth discussing for a true founding hire.
Should founding engineers negotiate the option exercise window?
Yes. The default 90-day post-termination exercise window can force an engineer to pay to exercise (and owe taxes) shortly after leaving. An extended exercise window (e.g., 7–10 years) is increasingly common and is one of the highest-leverage, lowest-cost terms a founder can offer to attract senior talent.
Cash vs equity — how should founders frame the tradeoff?
Offer a clear menu: a higher-cash/lower-equity option and a lower-cash/higher-equity option anchored to the same total target. Strong founding engineers self-select based on their risk appetite, and giving them the choice signals respect and transparency — both of which close offers.