# State of Startup Compensation, H1 2024 Authors: Peter Walker, Hamza Shad, Kevin Dowd Published date: July 25, 2024 Carta data shows that companies have become leaner and salary benchmarks have remained flat across much of the ecosystem. --- Companies on Carta made more than 60,000 new hires during the first four months of 2024. Over that same span, more than 60,000 employees on Carta left their positions. That’s a lot of activity: A lot of dream jobs earned, a lot of new opportunities begun—and, unfortunately, a lot of opportunities ended. As these tens of thousands of individual lives have changed, the broader landscape of startup compensation has changed, too. Layoffs have become less common. The average salary has increased for some job functions, such as design, and declined for others, such as customer support. And the geography of startup compensation is shifting: The average size of pay packages is on the rise for employees in metro areas like Atlanta, Cincinnati, Pittsburgh, and Sacramento. At Carta, we believe it’s our responsibility to share the insights that come from an unmatched amount of data about the private market. The data below comes from thousands of CTC customers with over 500,000 data points used by Carta Total Compensation. Other metrics in the report, such as those that describe employee movement, derive from the aggregate pool of more than 1 million employees currently working for the 45,000 startups that use Carta to manage their cap tables. ## **H1 2024 key takeaways** - **Salary and equity held steady:** The average amounts of both salary and fully diluted equity issued to new employees have been largely unchanged since last September. The market seems to have landed on a new normal for equity packages, which had previously declined sharply in late 2022 and 2023. - **Hiring hasn’t picked back up:** There were fewer new hires this January than in any of the previous four Januaries. The same was true for this February, this March, and this April. In part due to lower hiring, total net headcount on Carta has remained flat. - **Companies raising cash are leaner:** Startups that closed seed funding in H1 had an average of 5.3 employees, down from 6.9 in H1 2021. Series A startups have averaged 15.6 employees so far this year, compared to 17.6 in H1 2021. At most stages, successful fundraising teams have been smaller. ## **Hiring & headcount** The number of monthly job departures from companies on Carta has been declining steadily so far in 2024, with most of that reduction coming from a dip in layoffs and firings. There were 7,305 of these involuntary departures in May, down 38% since January 2024 and 62% from the recent peak of layoffs and firings, which occurred in January 2023. Voluntary job departures have also been on the wane over the past two years, if to a less dramatic degree than involuntary moves. There were 11,683 voluntary job departures on Carta in May, 4% lower from this January’s total and down 51% from May 2022, the recent high point. As this year has progressed, layoffs and firings have begun to make up a smaller portion of all job departures. Overall, there were 18,988 departures tracked on Carta in May. Less than 40% of those departures were involuntary, the smallest proportion since September 2022. Ever since late 2022, the total number of employees on Carta has essentially been in a state of stasis. Headcount would grow by a few thousand one month, then decline by a few thousand the next. This stands in sharp contrast to the preceding four years, when net headcount on Carta typically grew by at least 10,000 people per month. This new emphasis on financial austerity means that, in terms of employees, the startup industry is no longer growing like it used to. Hiring data bears out the low-growth hypothesis. January is typically an active time for adding talent. In three of the past four full years, it’s been the busiest hiring month of the year. Once again, January 2024 saw a spike in new hires relative to other recent months. Relative to past Januaries, however, it was a slow start to the year. The 27,677 new hires that occurred on Carta in January 2024 is down 29% from the previous January. It’s also the fewest new hires that have taken place in any January so far this decade. In the first four months of the year, total net headcount on Carta declined for six of the 11 primary industries we track. It stayed flat for two more. That leaves just three industries where total headcount has grown: medical devices, hardware, and energy. The most growth took place in energy, where hires outpaced departures by 1.8x during the first four months of the year. ## **Company composition** Less than 3% of all venture-backed companies on Carta are currently at Series D or later. But these late-stage companies account for about 25% of all headcount on Carta, a testament to just how much larger these advanced startups are than their early-stage peers. The average company at Series E+ has nearly 285 employees on its payroll, while the average pre-seed company has just six or seven employees. Despite this huge disparity in average company size, total headcount across all employees on Carta is dispersed relatively evenly across the venture lifecycle. No stage comprises more than 20% of all employees on Carta (Series A), and no stage comprises less than 8% (seed). In recent years, the time between when an employee is hired and when they leave their job keeps getting shorter. Since the pandemic in particular, it appears that workers as a whole are less inclined to stick with jobs for longer periods of time. One example: 43.4% of all employees on Carta who were hired in 2021 had left within two years. That proportion never reached 40% among workers hired in any year from 2016 to 2020. Another example: 23.3% of all employees hired in 2022 had left within one year. Again, that’s significantly higher than any of the previous six annual cohorts. However, this trend may already be coming to an end. The cohort hired in 2023 saw 8.2% of employees leave within six months; while that’s higher than most recent years, it’s lower than the 9.0% rate for employees hired in 2022. Companies that closed Series A rounds in the first half of 2024 had an average of 15.6 employees. That’s 16.3% lower than the average headcount for Series A companies five years ago, in 2019. The average employee count has also declined over that span at Series B and Series C. The average size of seed-stage companies ticked up slightly between H1 2019 and H1 2024. On a shorter timeline, however, seed-stage companies are shrinking, too. The average seed startup was 23% smaller in H1 2024 than it was in H1 2021. Similar trends in company size can be found within the SaaS sector, the most common industry designation for startups on Carta. Average headcount has declined over the past few years at seed, Series A, and Series C, and it’s increased only slightly at Series B. ## **Salary trends** The average salary benchmark across a wide range of job functions increased by 0.5% between January and April, continuing a stretch of modest salary gains in recent months. The average salary benchmark previously rose by 0.6% between September 2023 and January 2024. Employee paychecks got bigger in the past year. The average salary on Carta increased from May 2023 and April 2024 for nearly every job level, with senior individual contributors the lone exception. In terms of percentage gains, the largest increases occurred for entry-level employees, who saw their average salary rise by 2.3%. For every job level, however, the average increase in salary over this span did not keep pace with inflation. The annual inflation rate in the U.S. was 3.4% for the 12 months ending in April 2024. Average salaries stayed mostly steady from May 2023 to April 2024 across different job functions, as was the case for different job levels. But there’s a bit more variation among functions, at both ends of the financial spectrum. The average salary for customer success employees increased by 3.7% during this span—outpacing inflation—while the average salary for support employees declined by 1.8%. ## **Equity trends** The average size of equity packages issued to new hires (measured on a fully diluted basis) has declined substantially since November 2022. Since September 2023, however, it has barely budged. The startup world as a whole seems to have settled on a new normal for the amount of equity compensation that new hires can expect—at least for now. The percentage of vested, in-the-money stock options that employees choose to exercise before they expire has been in a state of steady decline over the past few years. In Q1 2024, the exercise rate ticked up slightly but resumed declining in Q2, dipping to 32.8%. Most of the time, when a company parts ways with an employee, the former employee has 90 days to decide whether to exercise any vested stock options. Over the past several quarters, however, the frequency with which companies offer an extended post-termination exercise period (PTEP) longer than 90 days has gone up—and now seems to have settled on a new normal. In each of the past six quarters, the rate of extended PTEP for terminated options has landed somewhere between 19% and 21%. ## **Compensation geography** Small companies are a bit more likely to offer geographic adjustments than larger companies. About 90% of all startups valued at less than $25 million factor in an employee’s location when determining compensation. Over the past few years, startups have grown less likely to make hires in their home state and more likely to add talent in other markets. Although this year has seen an uptick in the frequency of home-state hires for startups valued between $1 million and $10 million, it continued to decline for companies valued between $50 million and $500 million. The geographic complexion of startup hiring is undergoing a clear shift in the 2020s. One of the biggest changes has come in SaaS. By 2023, the rate of new hires at SaaS startups working in the same state that their company was located dropped to 36%. In terms of geography, accommodation is typically higher for startup employees who work in the Bay Area than any other market in the West census region. However, several other metro areas are close, with workers in the Seattle area being paid at about 97% the level of San Francisco. Average compensation in the Northeast region remains close to New York City, which has maintained higher average compensation levels. Average compensation recently increased in Boston and Burlington, but the gap with New York is shrinking. --- ## Additional equity compensation data Download the equity addendum below to see: - Employee option pool sizes by valuation - Median advisor equity for pre-seed, seed, and Series A companies - Median equity grants for a startup’s first 10 employees - Median equity grants for startup board members at the early stages - Average headcount by stage and industry over time.