Hiring our third employee — senior engineer. Offering $140K salary (below market) + equity. She's asking for 2% ownership. We're pre-seed, bootstrapped, ~$20K MRR. Is 2% reasonable or am I being taken advantage of?
Yes, standard is 4-year vesting with 1-year cliff. So after year 1, she gets 0.5%. Then monthly vesting for the remaining 1.5% over 3 years.
Also make sure to use ISOs (Incentive Stock Options) if she qualifies — better tax treatment for her. And have her file an 83(b) election if you're granting restricted stock.
Real talk: uPDATE: Offered 1.5% with 4-year vesting, 1-year cliff, and double-trigger acceleration. She accepted. Also bumped salary to $150K since we just closed a small angel round. Thanks for the sanity check everyone!