How much is too much?

I read Etsy’s announcement about paid maternity leave with something of a torn heart. As a working Mom, I’m a huge fan of paid maternity leave and recognize the incredible benefits in loyalty and morale this has on an organization. But as an entrepreneur and investor, I know first hand the kind of pressure paid maternity leave puts on early stage companies. It’s not that the entrepreneurs are cruel-hearted and don’t want to pay it, it’s that for many startups, these are survival choices: do they offer paid maternity leave (and for how long) or do they hire a much needed developer?

Last year, a group of VCs, angels and entrepreneurs collaborated to try to answer the question of how much is too much? What should early stage companies pay their team members, and what additional benefits should be offered? We surveyed several dozen companies in North America and I’m fortunate to be the custodian to compile the survey results.

Certain perks are pretty much standard for early stage companies now: 63% of venture backed startups grant options of some form to all staff (a further 37% pay options to some staff only), almost all startups pay annual leave beyond the statutory minimums, most have paid sick leave (irrespective of statutory requirements), and all venture-backed Series A companies in our survey pool paid for health insurance.

And despite Etsy’s announcement this week (and don’t forget — they aren’t a startup anymore, they went public almost a year ago) our survey group (all Seed and Series A companies in North America) still tell a more frugal story.

Startups Remain Frugal

Don’t be pressured into jumping too soon on additional perks: implemented too early, these benefits can actually break your company. You are not alone in being frugal. And ultimately you may be creating the runway to enable you to grow to profitability, even to IPO, and offer further benefits to your staff in the future.

A shout out and thank you for @NYU student, @CoenNathan who helped me compile these survey results. If you would like to participate in the 2016 survey (and receive the full compensation survey results, including base, bonus and equity details by individual role), please email me (details are on the website: www.peregventures.com).

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