Carta: tech startup workers are receiving 37% less equity in their companies on average compared with 18 months ago; average salaries are down 0.2% since 2022
Tabby Kinder / Financial Times :
Context & Ripple Effects
The compensation shift follows a broader startup funding crunch that had already reduced available capital for young companies. It matters because cash pay and ownership are the two main levers startups use to share risk and attract employees.
Carta's figures connect tighter financing conditions to workers' immediate economic stake in venture-backed employers, rather than treating equity grants as a fixed feature of startup jobs.
First-order effects
- Startup workers receive materially smaller ownership stakes on average, reducing the potential upside attached to joining or staying at a young company.
- With average salaries also slightly below their 2022 level, employers have less room to preserve total compensation through either cash or equity.
Second-order effects
- Startups recruiting for scarce roles may need to differentiate through role scope, flexibility, or clearer liquidity prospects when they cannot offer richer equity packages.
- Smaller grants can make workers more sensitive to company quality and financing durability, raising the importance of credible paths beyond the seed stage.
Third-order effects
- If this persists, startup employment could become less of a broad-based ownership proposition and more of a conventional labor market with concentrated upside among founders and investors.
- The pattern would reinforce a financing environment in which access to capital shapes not only company survival but also how widely the gains from successful startups are shared.
The trend: Tighter startup financing is reshaping compensation by reducing the equity upside that once compensated employees for venture-backed risk.