Technology start-ups have slashed equity packages for new hires as they weather a prolonged downturn, according to new data from San Francisco-based software company Carta.
People going to work at start-ups are receiving 37 per cent less equity in their companies on average compared with 18 months ago, the figures showed. Average salaries have barely changed during that time, shrinking by 0.2 per cent since November 2022, according to Carta, which mines information from the 43,000 early-stage US tech groups that use its platform to manage their investors.
Equity packages that grant new employees shares in their company have long been a crucial element of start-up compensation and a means by which fledgling companies can still attract top talent even if salaries are lower than at bigger rivals.