Qubit: Carta Startup Comp Report H1 2022

Nov 15, 2022

As a startup founder, your biggest burn is employee compensation.

What should you expect to spend as you scale your company?

Once a startup becomes a unicorn, it typically has over 700 employees
Median payroll for unicorns is around $110m
Engineering is always the majority of company payroll
Option pools range 13-20% of fully diluted equity across stages

You should keep in mind that the above will likely change in this new economic environment we are now entering.

“Headcount expands as a company’s valuation increases, though not always linearly. The median company valued at $50 to 100 million employs 52 people in addition to the founders. Once a startup hits the $1 billion mark, it typically has more than 700 employees. Only 12% of these unicorns have fewer than 250 employees.”

“Early-stage startups tend to spend early on payroll and ramp up quickly, with a $10 million payroll median for companies at valuations of $50–100 million.”

“Engineering accounts for the largest share of payroll spend across company valuations. This job function is at least 30% of spend, no matter the size or maturity of the company. Other functions slot in after engineering, but rapidly shrink under 10% in most cases.”

“While the total percentage of company equity reserved for employees varies widely, it’s clear that employees take a larger overall share as the company grows. The median company worth $25 million designates around 14% of its shares for employees, while the median unicorn has an employee pool of around 20% of fully diluted shares.”