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Plenty has been written about AI over the past two years. For much of that time, AI has been more hype than ...
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We get asked by clients all of the time – “How much equity should we give our employees?” Every situation is a bit different, but we thought a quick guide could be very helpful.
Why you need to offer Equity
Attracting and retaining top talent is almost always the difference maker between success and failure, sluggish or rapid growth and ultimately good and great companies. Like most start-ups, you will likely need to provide equity as part of the compensation package since cash can be scarce during the early days. But how much is enough? Although there is not a cookie-cutter answer, the practices described below can help you define your strategy.
Before getting into the nuts and bolts, take a look at this great infographic if you need a refresher on how valuation and equity work throughout a company’s life cycle.
Early Stage Equity
If your company is still more of a vision that has yet to garner marketable value, the standard is to offer straight points of equity to your core team (i.e., 1%, 2%, 5%, 10%). According Y Combinator’s Sam Altman, “As an extremely rough stab at actual numbers, I think a company ought to be giving at least 10% in total to the first 10 employees, 5% to the next 20, and 5% to the next 50. In practice, the optimal numbers may be much higher.”
This gets expensive, especially if you need more than a few core members to launch your vision into a working, breathing company, so move away from points of equity as soon as possible.
Talk Dollars and Cents
If the question of equity is overwhelming and confusing, convert it to a dollar figure. When you talk about equity as dollars instead of the number of shares or a percentage, you may easily compare it to market conditions, other employees and future value. For instance, if you said, “all engineers will get two percent,” that percentage will have different values as your company grows and moves through rounds of financing. Talking about equity as dollars also rallies employees around the goal to increase company worth.
Deriving the dollar value of equity for each employee
We recommend two fairly simple approaches commonly used by compensation consulting firms to determine the dollar value of equity:
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Use the current share price
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Multiply the employee’s base salary by a fixed, predetermined multiplier
Current Share Price Method
Although your company’s formula may be different, the key is to use a consistent methodology that factors in fully diluted shares and the current company value. (This approach does not apply to the equity given to founders and investors, which should be set by the board.)
Company value = Determine the fair value of your company. You may use a recent offer, formal valuation or market analysis. For our example, let’s say your company is worth $10 million.
Fully diluted shares = This is the entire option pool both issued and outstanding, including common stock issued to founders, issued options and remaining options. For our example, we will assume you have 5,000,000 total shares.
Share price = Company value/fully diluted shares. Your share price would be $2.
Now that you have a share price, it’s easy to back into a dollar value. Let’s say you hire a senior engineer at $100,000 and want to offer $30,000 in equity value. It is presumed that $30,000 will increase over time, which may be factored into the salary assumption.
Now that you have a fair dollar amount, you can back into the number of shares:
Number of equity shares to offer = equity value/share price, or $30,000/$2.00 = 15,000 shares. This translates to .3 percent of the issued and outstanding shares (15,000 /5,000,000).
Once you agree on a basic formula, you can assign percentages to different levels in your company hierarchy.
Remember: If you’ve got anything you’d like to share – we’d love to hear it. And once you are ready to start bringing on key employees – give us a call! We know a thing or two about that….
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Plenty has been written about AI over the past two years. For much of that time, AI has been more hype than reality. I THINK 2026 is when that starts to change.
Here’s the first in a three part series of where we see AI going in the recruiting world.
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For the last few years, most companies treated AI like a recruiting assistant. It helped draft job descriptions, summarize resumes, and speed up outreach. Useful, sure. But it didn’t fundamentally change how hiring worked. And oftentimes, things needed to be double checked before hitting send.
I think that’s going to change.
In 2026, we’re seeing the rise of agentic HR. These are systems that don’t just support recruiters. They can execute work autonomously inside defined guardrails.
That shift is forcing talent leaders to rethink what recruiting teams are actually responsible for and what still requires a human.
From Copilot AI to Agentic Recruiting Systems
Traditional recruiting AI waited for humans to click “next.”
Agentic systems don’t.
They can interpret real-time funnel data, align to hiring goals, and take multi-step action. That includes adjusting sourcing spend, coordinating interview schedules, and triggering workflow changes without manual oversight.
This isn’t automation layered onto old processes. It’s the early version of a self-driving recruiting function.
The Metric That Matters More Than Time-to-Fill
Time-to-fill and cost-per-hire still matter. They just don’t fully capture what’s changing.
A concept showing up more in 2026 is Return on Autonomy. It measures the value created when humans and autonomous systems are paired intentionally.
In plain terms, the question is simple.
Are we using technology to eliminate busywork, or are we just doing the same work faster?
Because speed doesn’t help if it leads to worse decisions, a weaker candidate experience, or more noise in the funnel.
Why This Changes the Role of TA Leadership
As agentic systems absorb transactional work like screening, scheduling, and coordination, the role of recruiting leadership shifts.
The best TA leaders are spending less time managing process and more time doing what actually drives hiring outcomes. That includes aligning hiring to business priorities, building trust with candidates, and improving decision quality.
The real opportunity of 2026 isn’t more AI. It’s that recruiters finally get to focus on the work that requires being human.
The Mistake Companies Are Making Right Now
Here’s the trap.
Companies adopt advanced recruiting technology but keep the same habits. Long approval chains. Inconsistent communication. Unclear evaluation criteria.
When that happens, speed increases, but trust collapses.
Candidates don’t experience innovation. They experience silence, confusion, and a process that feels even more impersonal than before.
In 2026, the human experience of hiring is becoming a differentiator again because so many companies are getting it wrong.
What Talent Leaders Should Be Thinking About Now
You don’t need a total rebuild tomorrow. But you do need clarity.
The companies winning in 2026 are asking the right questions.
What parts of our hiring process truly require human judgment?
Where are we slowing things down out of habit?
Are recruiters trained for strategic work, or just process management?
Do our systems increase transparency, or just efficiency?
These aren’t technology questions. They’re leadership questions.
What’s Next
Agentic HR is changing how recruiting works. It’s also creating a new challenge.
As employers deploy autonomous systems, candidates are doing the same. The result is an emerging AI-on-AI hiring arms race that’s flooding pipelines with highly optimized but low-trust applications.
Next in this series: The AI-on-AI Hiring Arms Race and How to Protect Hiring Quality Without Breaking Trust
A lot of companies are going to try to AI their way into faster hiring this year and still end up with worse results. If you want to build a recruiting model that actually works in 2026, one that balances speed, quality, and credibility, we can help. Reach out if you want a second set of eyes on your hiring approach.
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