Attracting Top Engineers in a tight market
I think the answer to this question falls into comp and non-comp buckets.
On the comp side, there needs to be a clear stratification of importance of specific positions within the firm. I know certain companies, post seed round, that have given incredible engineers with top creds and experience between 4%-10% of the company. Clearly these are for CTO/Chief Scientist-type positions, but these are packages I haven’t seen before. In my opinion the companies that have made these moves have done so wisely: the difference between a very good engineer and a game-changer, rock the world engineer is massive, and these hires clearly fall into the latter category. Besides co-founder type grants for uber rock stars, I have seen top engineers, in general, getting more equity than I have seen before. Quite frankly, I think engineers have been systematically underpaid (from an equity perspective) in many companies and the shortage of top talent is causing the market to (appropriately) adjust.
On the non-comp side, targeting the right engineers with a burning passion to help solve your problem is critical. The best people (e.g., big data Ph.Ds) have lots of options - quant hedge funds, academia, etc. For them to join and to do so in an economically rational manner for the company, they need to be deeply invested in helping the company achieve its “big idea.” Cash comp will never be equivalent to joining a hedge fund. Otherwise, tension and disruption will reign and nobody will be happy.
Clearly there are no silver bullets, but IMHO these are two necessary approaches for addressing the competitive landscape.
