The funding in our startup comes from the pockets of the two founders. The monthly salary of the initial team will be in line with the market average and we are looking for ways to reward people in the short term, but not necessarily diluting the company ownership.
Any suggestions/comments would be helpful.
Access to strategy and direction are one way. Saying thank you a lot and doing meals together when milestones are hit is another.
uhh bonuses?
Reasonable bonus stock grants with the normal 4 year vest and 12 month cliff... its the easiest way to see who are going to be your core team in three years or three months. Personally, I believe giving cash bonuses very early on sends the wrong message - hired guns that tend to leave when a better deal comes along.
People often want to be rewarded appropriately with a mix of real-now money, genuine appreciation, security, belonging/ownership, a visible and viable forward path should they want to progress, and a sense they're doing something worthwhile.
So money is just an element, and 'market average' may not be enough alone and shouldn't be the major consideration.
You'll be wise to reconsider the equity option.Too many foolishly, to their detriment, try to retain too much.
Distributed and vested appropriately, equity encourages and rewards both short- and longer-term work, often bringing greater return to the founders.
An option is to structure an 'employee/associate pool' which holds equity and receives financial rewards therefrom, but is only available to continuing employees/associates (those who're still there, rather than came and went).
<a href="http://glvr.com" rel="nofollow">I'm happy to not be anonymous, and welcome sensible contact.</a>