Startups have never been capable of offer salaries as high as large tech corporations. Now with corporations like Meta AND OpenAI willing to pay tens of millions in salaries in the race for artificial intelligence – the pay gap has turn out to be even greater.
However, startups at an early stage of development are not doomed to failure. According to founders and experts on stage at TechCrunch Disrupt 2025, if they develop a compensation strategy that is generous, fair and flexible, they’ll give you the option to supply competitive compensation packages and give themselves room to adapt their approach as they grow.
Startups shouldn’t attempt to compete with big tech corporations anyway, Yin Wu, co-founder and CEO of capital management software Pulley, said on stage at TechCrunch Disrupt in October. She added that a stable tech company and a startup typically don’t attract the same potential candidates initially.
Instead, startups should provide compensation packages to charity to the extent they can, Wu said, no matter whether or not they can’t match the salaries of a large tech company.
“My pretty strong opinion when it comes to equity in a startup is that you should be more generous than you think you should be,” Wu said. “I think it’s unlikely that if a company becomes really successful, you’ll look back and say, ‘Man, I gave away too much capital from everyone who was in my company trying to make this company really successful.’”
Randi Jakubowitz, head of talent at 645 Ventures, agreed. Jakubowitz added that if a startup desires to make a competitive offer, it should set clear goals for the person it hires to make sure it matches the salary they receive.
“Make sure you hold them accountable and make sure you understand what the implications are from a vesting cliff standpoint,” Jakubowitz said, referring to a situation in which employees gain control over their equity stake. “In this case, if you don’t act quickly, if someone is underperforming, that’s capital that you’ll never get back if that person is underutilized. Make sure there’s very clear accountability.”
Techcrunch event
San Francisco
|
October 13-15, 2026
The panelists also emphasized that corporations do not have to have established strategies regarding remuneration and equity from the starting. Instead, startups should ensure they have a fair approach from the starting, so even if they need to alter, they have the right foundation to do so without facing legal hassles or corrupt office politics.
For Wu and her company, Pulley, that meant setting standards for compensation packages. Wu said the company pays a set amount for each position – no matter where the potential worker works – and consistently builds compensation packages with stock offers in the ninetieth percentile.
“Having this framework allowed us to evolve and say, ‘great, because the company continues to do well, the actual variety of shares received will vary because the company values are different, but this framework is still applied.’
Rebecca Lee Whiting, founding father of Epigram Legal and factional general counsel, added that having these standards will help corporations avoid potential legal pitfalls in the future. For example, it helps corporations avoid offering unequal pay to candidates of various genders – something all corporations should ethically avoid – but is also illegal in states like California, Whiting noted.
Whiting, Wu and Jakubowitz agreed that so long as founders approach crafting their compensation packages with honest intentions, every thing else can be adjusted or modified in the future.
“I think it’s really important to think beyond just the process. Think about who the people are that you want to hire and what will encourage them to take you up on the offer,” Whiting said. “It’s not something you need to put out of your mind right away. You’ll probably have to clean up after the B series and confirm that everything’s OK. But don’t try to achieve perfection right away by hiring the first few people.”