Set Hiring Equity Without Confusing FMV With Value

Use Equitybee Benchmark to check a new-hire offer against comparable grants—not to decide what an option is worth or how much ownership your company can afford to grant. For an early engineering hire, use it to inform an equity range alongside a cash offer and a bottom-up hiring budget. A market median cannot set that range for you.

Enter your proposed grant to separate Grant FMV, fully diluted percentage and exercise cost.

Equitybee Measures New-Hire Grant FMV, Not Option Value

Equitybee’s public methodology describes more than 9,000 new-hire grants submitted through its platform, with data last updated in July 2026. Its comparison unit is Grant FMV: options granted multiplied by fair market value per share on the grant date.

This is the first grant an employee received when joining a company. It is not an annual compensation figure, a refresh-grant benchmark or the current value of someone’s accumulated equity.

The tool compares cohorts by department, seniority and company stage. Detailed results require a free account and include distributions and sample sizes. Equitybee calls the grants “verified,” but also states that its dataset and methodology have not been independently verified and may not represent the broader startup market. Treat a result as evidence about that platform’s sample, not a universal compensation standard.

The public page reports a median of roughly $20,000 in new-hire Grant FMV for Seed / Series A companies. That combines roles and seniority levels; it is not a recommended grant for your first engineer. The combined stage category also cannot isolate the circumstances of a company making its first hire.

The Same Grant Has Three Different Measures

The calculator starts with a hypothetical offer: 40,000 options, grant-date FMV of $0.50 per share, a $0.50 strike price and 10,000,000 fully diluted shares, including the option pool. Assume the grant comes from the pool already included in that denominator; do not count it twice.

Measure	Example Result	What It Answers
Grant FMV	$20,000	Benchmark comparison
Fully diluted percentage	0.4%	Share of capitalization
Full exercise cost	$20,000	Purchase cash, excluding taxes

The percentage shows the grant’s share of the defined fully diluted capitalization, not shares the employee already owns. Exercise cost is the cash required to purchase all the underlying shares, assuming they become exercisable.

Equitybee says grant-date FMV equals the strike price for most option grants. When those prices are equal, its metric also equals the full exercise cost. It does not mean the employee has received that amount in spendable compensation, nor is it a valuation of the option itself. Stock options are rights to buy shares at a fixed price; exercising requires payment, and private shares may be difficult to sell. Carta’s stock-option guide explains those mechanics.

If FMV and strike price in this example were both $1 instead, the same 40,000 options would show $40,000 of Grant FMV and cost $40,000 to exercise. The fully diluted percentage would still be 0.4% on the same denominator. A higher benchmark dollar amount is therefore not, by itself, evidence of a better offer.

Match the Cohort to the Work, Not Just the Title

Write down the role’s actual scope before selecting a cohort: individual contributor or team lead, technical ownership, management responsibility, department and company stage.

A founding engineer responsible for architecture, recruiting and production operations may not fit the same cohort as an engineer joining an established team. Use the closest match, then inspect adjacent cohorts by changing one factor at a time. Record the sample size and distribution, not just the median. A thin cohort should carry less weight.

The public aggregate does not supply a role-specific range for your first engineer. Without the relevant cohort results, do not present a precise market range as though the benchmark established it.

Set an Equity Range Alongside Cash Compensation

Choose an internal equity range for that scope and level. Document why an offer should sit toward its lower or upper end: responsibility, scarce expertise, salary trade-off or unusually early joining risk.

Do not convert a cash salary shortfall into an equal amount of Grant FMV. One is reliable pay; the other is a comparison measure attached to an uncertain, potentially illiquid asset. Keep salary and equity visible as separate components rather than presenting a single guaranteed “total compensation” number.

Budget the Pool From the Whole Hiring Plan

Convert proposed grants into option counts and fully diluted percentages using a consistent, dated denominator. Sum the grants for planned hires, then budget separately for refresh grants and possible leadership hires.

This is a bottom-up pool calculation. Carta’s option-pool guidance likewise recommends sizing the reserve from the hiring plan and using peer benchmarks as a sanity check. Equitybee’s new-hire dataset does not directly establish your refresh budget.

Use a cap-table model to distinguish grants from an existing reserve from an expansion of that reserve, and to test future financing dilution. An individually competitive offer still needs to fit the aggregate hiring plan.

Explain the Offer and Complete the Grant Approvals

Give the candidate the option count, estimated fully diluted percentage and denominator date, valuation context, vesting schedule, cliff, exercise price, expiration date, post-departure exercise window and grant-approval process. Identify estimates as estimates.

Do not treat an offer letter as a completed option grant. Carta’s US-oriented option-pool guidance describes formal board approval as necessary to lock in the grant’s terms. Define the vesting cliff clearly, and have counsel confirm the required approvals, applicable plan and local requirements.

The benchmark can support your explanation of competitiveness. Your hiring policy must still explain the ownership, cash trade-off and terms the candidate is actually being offered.