Compensation & Benefits

*Company pays for healthcare plan premiums, there may be additional copays or out of pocket costs to employees and dependents. See details for country-specific compliance here.

** Option for Company CEO to implement the bonus plan after the external funding round

Each company should establish an annual performance and compensation review process (see detailed notes under Annual Performance Review and Salary Increases below).

While start-ups offer many benefits such as the opportunity to work on exciting projects, a fast-paced work environment, and the chance to be part of creating something new, compensation is a concern. OCV companies have to manage their burn rate and cannot always offer salaries that compete with a larger, established company. OCV companies offer stock equity incentives, opportunities to learn the latest technologies, and rapid career advancement.

Hiring managers should look for workers who are willing to take a certain amount of risk when working for a start-up. Workers must weigh the risks and benefits of working at a start-up and decide if such an opportunity is right for them.

Compensation is an important issue for both companies and workers in the start-up world. Companies must offer compensation packages that are attractive and competitive, while workers must be willing to take on a certain amount of risk in exchange for the opportunity to be part of something new and exciting. With the right balance of risk and reward, start-ups can attract and retain top talent and continue to grow and innovate.

OCV companies should want to hire people willing to take risks and value their equity compensation as owning a piece of a business with tremendous potential.  We want a team who feel committed to the success of the company and are not solely motivated by a paycheck.

Open Core Ventures recommends that our companies seek to compensate workers with location as a consideration.

Some companies advertise compensation packages at a global rate which may send a message that the company can't hire anyone who lives in high cost of living areas but which represents above market compensation to people in the rest of the world.

When companies post their roles with salary transparency and pay the same everywhere it may appear simple,  but a one-size-fits-all approach has limitations

Great candidates who live in high cost of living areas may be unaffordable to compensate when compared to a global rate and can negatively impact staffing choices

Appropriate compensation based on location is challenging to implement and maintain, but ultimately it will enable you to hire the best talent for your team regardless of location.

The following resources may provide you with information to better understand fair market compensation for salaries and equity .

Also see:

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Stock Options and

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Step 5: Establish the company’s options pool

Management teams are responsible for developing an annual review process. Considerations for compensation increases should be based around market rate for the role rather than inflation-based adjustments.

The market’s adjustments may account for the inflation rate to some degree but also factor in other macroeconomic factors affecting compensation which may counteract any increases in the inflation rate. Inflation can be high while market rate changes are low. Parity for companies with the market at large is important to remain consistent.

Similarly, conversations around salary adjustments should also not mention any changes to employee cost of living.