In the post–AI boom economy, the war for tech talent is fiercer than ever. Startups are chasing engineers, product leads, and data scientists who are used to the salaries, perks, and stability of Big Tech. The challenge? Matching that appeal without the same cash reserves.

But experts say the solution isn’t to compete on pay — it’s to compete on purpose, ownership, and fairness.

A recent TechCrunch panel with startup veterans Sarah Tavel (Benchmark Capital), Henry Ward (Carta), and Michelle Zatlyn (Cloudflare) explored how young companies can design equitable compensation frameworks that attract top talent while staying financially disciplined.

“People don’t join startups just for the paycheck,” Tavel said. “They join for belief — and for a real stake in the outcome.”

The Ownership Equation

Equity remains the most powerful weapon in a startup’s arsenal, but as companies grow, fairness can quickly erode if ownership isn’t managed transparently.

Ward, CEO of Carta, which manages equity for more than 40,000 startups, says founders often underestimate how critical it is to communicate what stock options really mean.

“You’re not giving away money - you’re giving away the future,” Ward said. “That only works if people understand what they’re earning, when they earn it, and how it scales.”

Experts recommend setting up a clear equity philosophy early, outlining how ownership ties to role impact, not just seniority. This avoids late-stage inequities that can breed resentment or talent churn.

Fairness Over Flash

Cloudflare co-founder Michelle Zatlyn emphasized that early-stage startups don’t need to mimic Google or Meta’s compensation models. Instead, they can compete by offering transparency and trust — two things large corporations often lack.

“At Cloudflare, our pitch wasn’t ‘We’ll make you rich.’ It was ‘We’ll make you essential,’” Zatlyn said. “We couldn’t pay what others paid, but we could give people something money doesn’t buy — visible impact.”

This approach resonates in 2025’s climate, where younger employees increasingly value authenticity, mission alignment, and growth potential over lavish perks.

A Glassdoor survey this year found that 73% of startup employees said “feeling valued and informed about company direction” mattered more than financial benefits.

Designing Smart Equity Systems

Startups that scale responsibly tend to follow three rules for fair equity:

1. Define equity bands early — link grants to clear job levels, not negotiations.

2. Refresh grants periodically — reward loyalty and prevent early dilution.

3. Educate constantly — help employees understand vesting, liquidity, and tax implications.

Zatlyn warns that ignoring this education gap can destroy morale: “If your first liquidity event surprises your employees instead of rewarding them, you’ve failed.”

Ward adds that even small companies should use cap table automation tools from day one. “Spreadsheets break the moment you raise your second round,” he said.

Competing on Culture, Not Cash

Culture is still the ultimate differentiator. Startups can’t match Big Tech’s paychecks, but they can offer something corporate giants can’t — speed, visibility, and meaning.

“A $200K engineer at Meta might push code once a month,” Tavel said. “At a startup, that same person ships products every week that could change the company’s trajectory. That’s ownership — not in shares, but in spirit.”

The best founders, she added, view culture itself as compensation. “Equity matters, but so does giving people the autonomy to build something that feels personal.”

The Takeaway

Winning the talent race in 2025 isn’t about money — it’s about math and meaning.

Startups that balance fairness in equity with clarity in communication can offer something more valuable than Big Tech ever could: a real seat at the table when the future is written.

As Tavel put it: “The best talent doesn’t just want a job. They want a journey.”