How can startups fairly attract good talent without big tech bank accounts?

Startups have never been able to offer the same great salaries as big tech companies. Now with companies like dead and OpenAI Willing to pay million-dollar salaries amid AI race – the compensation gap has widened even further.

However, early-stage startups are not doomed to failure. If they develop a generous, fair and flexible compensation strategy, they can offer competitive compensation packages and give themselves room to adjust their approach as they grow, according to founders and experts who were on stage at TechCrunch Disrupt 2025.

Yin Wu, co-founder and CEO of stock management software Pulley, said on stage at TechCrunch Disrupt in October that startups shouldn’t try to compete with big tech companies anyway. She added that established technology companies and startups generally don’t attract the same potential candidates to start with.

Wu said startups should instead be as charitable as possible in their compensation packages, regardless of their inability to match the salaries of big tech companies.

“My strong opinion when it comes to startup stocks is that you should be more generous than you think you should be,” Wu said. “I think it’s unlikely that, if the company was really successful, you would look back and say, ‘Man, I gave up a lot of stock from everyone who was in my company trying to make this company really successful.’

Randy Jacobowitz, head of talent at 645 Ventures, agrees. Jacobowitz added that when a startup is looking to make a competitive offer, it should set clear goals for the person it’s hiring to ensure the employee lives up to the level of compensation they receive.

Regarding when employees gain control of their stock stakes, Jacobowitz said: “Make sure you hold them accountable and make sure you understand what the implications are from a cliff standpoint.” “This is where, if you don’t move quickly if someone underperforms, these are equity that you would never get back if they were fully vested. Make sure there is very clear accountability.”

Participants also stressed that companies do not need to establish their own compensation and equity strategies from the beginning. Instead, startups should make sure their approach is fair from the start, so even if they want to change, they have the right foundation to do so without exposing themselves to legal troubles or tense office politics.

For Wu and her company Polly, that meant setting standards around compensation packages. Wu said the company pays a specific range for each role — regardless of where a potential employee is located — and constantly builds compensation packages with equity offers in the 90th percentile.

“Having this framework has allowed us to be able to grow and say, ‘Wow, as the company continues to do well, the actual number of shares you receive will vary because the value varies between companies, but this framework still applies.

Rebecca Lee Whiting, founder of Epigram Legal and partial general counsel, added that having these standards will help companies avoid potential legal risks in the future. For example, it helps companies avoid offering unequal pay to candidates of different genders — something all companies should ethically try to avoid — but it’s also illegal in states like California, Whiting noted.

Whiting, Wu, and Jacobowitz all agreed that as long as founders approach building their compensation packages with fair intentions, everything else can be tweaked or changed in the future.

“I think it’s really important to think about not just the process. Think about the people you’re trying to hire and what will motivate them to accept that offer,” Whiting said. “It’s not something you have to get out of right away. You’ll probably have to do the cleaning up after the Series B and admit that’s a good thing. But don’t try to get it perfect out of the gate when you’re hiring the first few people.”