How much equity should you give your employees?
There's no single right number, but Europe's leading VCs broadly agree on the ranges. Here's how much equity startups set aside for employees, how much individual hires receive by role, and how it affects your dilution, based on published guidance from Index Ventures and Balderton Capital.
The short answer
Most startups reserve a 10–20% option pool for employees. Both Index Ventures and Balderton Capital advise setting aside around 10% at seed, then growing the pool through later rounds, often past 20% at growth stage (Index Ventures; Balderton Capital). European pools have historically run a little lower than US ones, but the gap is closing (Balderton).
At the individual level, grants scale with seniority and stage: the earliest hires might receive up to around 1% each (Balderton), executives considerably more, and later employees progressively less, typically framed as a multiple or percentage of salary once past the first ten hires (Index Ventures; Balderton).
Option pool size by stage
Index Ventures and Balderton Capital both recommend around 10% at seed, growing past 20% at later stages. European pools have historically been lower than US ones but are rising (Balderton Capital).
How much equity per hire
By hire stage (Balderton Capital)
- Earliest hires (first ~10): up to around 1% each in the US; Europe somewhat lower but rising.
- Mid-size (15–50 people): grants shift to seniority and performance-based ranges.
- Growth stage (50+): grants by role and seniority, typically framed as a multiple of salary.
By role and seniority (Index Ventures, Rewarding Talent)
US-indicative values. Guidance only. Convert to your own fully-diluted equity percentage and currency. Based on a ~50-person hiring plan between Series A and B.
| Function | Level | Grant as % of salary | Indicative grant value |
|---|---|---|---|
| Executives | C-level | — | ~$250,000 |
| Executives | VP-level | — | ~$100,000 |
| Engineering / Product / BizDev | Director | 75% | ~$97,500 |
| Engineering / Product / BizDev | Senior | 50% | ~$40,000 |
| Engineering / Product / BizDev | Individual | 33% | ~$20,000 |
| Marketing / Finance / HR | Director | 33% | ~$36,000 |
| Marketing / Finance / HR | Senior | 20% | ~$13,000 |
| Marketing / Finance / HR | Individual | 15% | ~$6,000 |
| Sales / Customer Success | Director | 33% | ~$26,000 |
| Sales / Customer Success | Senior | 10% | ~$5,000 |
| Sales / Customer Success | Individual | 5% | ~$1,500 |
Standard vesting terms
Index Ventures
- 4-year vesting with a 1-year cliff, the standard across the US and Europe.
- 25% vests at the one-year cliff, then the remainder vests linearly to 100% at year four.
- Europe typically uses quarterly or annual vesting after the cliff to reduce admin; the US almost always uses monthly.
What the option pool does to your ownership
Option pools are typically funded pre-money at a round, so creating or topping up the pool dilutes founders and existing shareholders before new investors come in (Balderton Capital; Index Ventures).
Sizing matters: too large and you over-dilute now; too small and you cannot hire. Both Index Ventures and Balderton Capital recommend sizing to your actual hiring plan and refreshing at each round rather than over-sizing upfront.
How to size your own pool
- 1Model 18–24 months of planned hires by role and seniority.
- 2Apply per-role benchmarks from the table above to get a total grant value.
- 3Convert to percentage of fully-diluted equity. Add a buffer for unplanned hires.
- 4Refresh the pool at each round rather than over-sizing now.
Structure decides how much your team keeps
The benchmarks above tell you how much equity to give. Structure decides how much of it your team actually keeps after tax. In Germany, the same grant can net very differently under a VSOP compared to a §19a real-share EIP: growth in an EIP is taxed at 25% flat rather than up to 45% as salary. Because an EIP is more tax-efficient, you can deliver the same net reward with a smaller grant, meaning less dilution for founders and existing shareholders. All §19a and tax claims per PXR, GAIA's legal partner.
Common questions
Most startups reserve around 10% at seed, growing past 20% at later stages. Both Index Ventures and Balderton Capital recommend sizing to your hiring plan and topping up at each round.
Model a grant with our free calculator
See the after-tax difference between a VSOP and a §19a real-share EIP on your own numbers. Free, no sign-up required to see your VSOP result.