According to TechCrunch, startups are facing an even wider compensation gap as companies like Meta and OpenAI offer million-dollar AI salaries that early-stage companies simply can’t match. At TechCrunch Disrupt 2025, founders and experts including Pulley CEO Yin Wu and 645 Ventures’ Randi Jakubowitz argued that startups shouldn’t even try to compete directly on salary. Instead, they recommend developing compensation strategies that are generous, fair, and flexible from the beginning. Pulley pays set ranges for each role regardless of location and offers equity in the 90th percentile. The panelists emphasized that companies don’t need perfect compensation strategies immediately but should establish fair frameworks that can evolve through Series B funding and beyond.
The reality of competing without cash
Here’s the thing – startups have never been able to throw money at talent like big tech can. But now with AI salaries hitting seven figures at places like OpenAI, the gap feels almost comical. Yin Wu from Pulley made the crucial point that startups and stable tech companies aren’t even competing for the same people. They’re selling different dreams. One offers security and big paychecks, the other offers potential upside and the thrill of building something from scratch. So why try to fight on their turf?
Why generosity actually pays off
Wu’s advice is pretty radical in a world where founders often cling to every percentage point of equity. “You should be more generous than what you think you should be,” she said. And she’s right – if your company actually succeeds, are you really going to look back and regret giving early employees meaningful ownership? Probably not. The people who help build something from nothing deserve to share significantly in the success. It’s not just about being nice – it’s about aligning incentives properly.
Where accountability comes in
But here’s the flip side that Randi Jakubowitz highlighted: you need clear accountability. If you’re giving away substantial equity, you’d better make sure people are earning it. The vesting cliff – that point where employees actually gain control of their shares – becomes crucial. If someone’s underperforming and you don’t act before they’re fully vested, that’s equity you’ll never get back. So it’s not about being stingy, it’s about being smart. Set clear goals, measure performance, and don’t be afraid to make tough calls early.
Building frameworks that evolve
The most practical insight from the panel might be that you don’t need to get everything perfect from day one. Rebecca Lee Whiting noted that you’ll likely need to do cleanup after Series B, and that’s okay. What matters is having a fair foundation. Pulley’s approach of set salary ranges per role and consistently high equity offerings creates a framework that scales. The actual share numbers might change as company valuation increases, but the principle remains. And this approach has the bonus of avoiding legal pitfalls around unequal pay – something that’s not just ethically important but legally required in states like California.
What really motivates people
Ultimately, this isn’t just about compensation mechanics. It’s about understanding what drives the people you’re trying to hire. Some candidates will never take a startup risk no matter what you offer. Others are specifically looking for that early-stage environment where they can have real impact and ownership. The trick is identifying those people and then not being cheap about rewarding them for taking the leap. You’re asking people to bet on your vision – so you’d better make sure the upside is worth the risk.
