One of the areas we're often asked for help by founders is pay - what's the market salary for this position, how many options should I give out, should we have a bonus pool and how should it be setup? But bench-marking information can only get you so far when thinking about salaries. Often it comes back to more fundamental questions around company culture and how you want to build teams.
Especially in competitive talent markets like London, it pays to develop a broader strategy to attract and retain talent at your start-up. Great culture, community reputation, office location or just being friendly are all potential strategies to win candidates without having to pay top dollar. And this ultimately means more cash for other things.
This is an area where there isn't a right answer, but even for early stage companies it's worth spending the time to think how your strategy for compensation will develop. Homebrew recently published a great overview of the issues, which I found a great catalyst for thinking about pay.
We all know people who “winged” it when it came to hiring and putting compensation packages together for employees in the early days. This may work for a while. However, it’s likely to lead to later adjustments and readjustments as you hire more people.