Seed-stage founders often struggle with how much equity to offer their first hires. The decision can significantly impact talent attraction and future hiring flexibility. According to Carta’s State of Seed report, equity grants for early employees drop steeply. The first hire typically receives about 1.5% equity, while the second hire gets around 0.85%, and by the fifth hire, that figure falls to about 0.33%. This stark decline reflects the increasing normalization of equity as the company grows and fills out its team. Many founders mistakenly treat all early hires the same. The first hire carries more risk, joining before the company has proven itself, which justifies a higher equity offer. Misjudgments also occur with advisor equity, where founders often over-grant. Data indicates that pre-seed advisors typically receive around 0.24% equity, with only 10% getting more than 1%. If an advisor demands more, they need to bring exceptional value. Founders commonly make four key mistakes. They fail to recognize the vast differences in equity expectations between early hires, grant too much to advisors, neglect to reserve equity for future senior hires, and overlook the importance of context. A former CTO, for instance, warrants more equity than a less experienced engineer. Understanding these benchmarks helps founders make informed decisions that align with their company’s growth and hiring strategy.