How Much Equity Should a CTO Get? [5 Key Factors] [2026]

Equity is the lifeblood that aligns a CTO’s incentives with a startup’s success. Striking the right balance between ownership and dilution can make or break both parties. DigitalDefynd empowers leaders to navigate these critical negotiations by combining data-driven insights with real-world benchmarks. According to industry data, a pre‑seed CTO typically receives around 3 % equity, while at Series A the median grant falls to 1.5 %, and by Series C it often hovers near 0.4 %. Moreover, most startups reserve 10–15 % of their cap table for an option pool, directly impacting what slice a CTO can secure. In this article, we’ll unpack five key factors that shape CTO equity grants, illustrate how dilution and fundraising dynamics influence long‑term ownership, and provide actionable examples drawn from real‑life deals. With these insights, you’ll be equipped to negotiate an equity package that reflects both your strategic value and the risks you’re assuming.

 

Related: CTO OKR Examples

 

How Much Equity Should a CTO Get? [5 Key Factors] [2026]

Below is a concise reference table to help model and visualize how much equity a CTO might receive—both as a headline percentage and after typical dilution—across different startup stages:

Company Stage	Typical Grant	Post‑Dilution Estimate	Key Considerations
Seed / Pre‑Seed	2 %–4 %	1 %–2 %	High risk → larger upside; standard 4‑year vesting
Series A	0.8 %–2 %	0.5 %–1.2 %	Institutional backing; performance‑linked tranches
Series B & Later	0.3 %–0.8 %	0.2 %–0.4 %	Mature valuation; may include refresh grants
Founding CTO	5 %–10 %	2 %–5 %	Co‑founder premium; heavy dilution through pool top‑ups
Hybrid / Extended	+15 %–25 % uplift	+10 %–20 % uplift	Product, data, or commercial scope adds equity bonus

How to use:

1. Select baseline by company stage.
2. Estimate post‑dilution by halving the initial grant as a rough guide.
3. Adjust up or down based on individual track record, role scope, and pool dynamics.

This table offers a quick‑scan framework—you can plug in your company’s specific dilution expectations and your own experience to calculate a tailored equity target.

 

Typical Equity Ranges by Company Stage

Seed‑stage CTO grants average 3 % equity; Series A median sits near 1.5 %; Series B typically around 0.5 %.

 

Equity percentage is primarily a function of company maturity. As startups advance through funding rounds, risk declines and valuation rises, driving down the proportion of ownership available to technical leaders. By anchoring expectations to stage‑specific norms, both founders and CTO candidates gain clarity on what constitutes a fair grant and how much future dilution to anticipate.

 

Seed and Pre‑Seed: 2–4 % grants to offset high risk

Early‑stage ventures assign the greatest upside to CTOs because they shoulder technical strategy, architecture design, and initial product development, often with no market validation or revenue. To balance this elevated risk, seed‑stage CTOs typically receive between 2 % and 4 % of the fully diluted cap table, with 3 % representing the industry midpoint. Vesting schedules remain standard (four years with a one‑year cliff), but larger percentages recognize the likelihood of multiple dilution events ahead.

 

Series A: Median grant of 1 %–1.5 % amid institutional backing

Once a startup secures its first institutional investment, dilution from seed investors reduces ownership slices. Surveys reveal a median CTO grant of 1 %–1.5 % at Series A, though exceptional candidates can command up to 2 %. At this juncture, equity packages often tie to performance milestones—hitting revenue targets or user‑growth thresholds—ensuring that upside aligns with tangible company progress. The shift toward measurable objectives reflects investors’ demand for accountability alongside risk mitigation.

 

Series B and Beyond: 0.3 %–0.8 % typical, with refresh grants for retention

By the time a company reaches significant revenue traction or product‑market fit, equity percentages contract further. Series B CTO grants generally range from 0.3 % to 0.8 %, centered around 0.5 %. Although smaller on paper, these stakes sit atop much higher valuations, meaning the absolute dollar value can eclipse earlier rounds. To maintain motivation through scaling phases, many organizations layer in performance‑based refresh grants, effectively topping up equity if specific growth or technology milestones are met.

 

Understanding Dilution Trajectories

Even the most generous pre‑seed grant can shrink dramatically over successive financings. For example, a 3 % seed grant may dilute to under 1 % by Series C, yet its potential exit value at a much higher valuation often outstrips what a 1 % grant at Series A could deliver. Modeling post‑dilution ownership—and factoring in option pool refreshes—is therefore critical to assessing the true long‑term stake.

 

Balancing Equity and Compensation

As percentage grants fall at later stages, total compensation packages tend to tilt toward higher base salaries, cash bonuses, or additional benefits. CTO candidates should evaluate the overall mix, ensuring that immediate financial needs are met while preserving meaningful upside through equity.

 

Key Insights:

• Stage dictates size: Earlier involvement demands larger equity to offset uncertainty.
• Dilution is real: Always project how future fundraises will erode initial percentages.
• Value vs. percentage: A smaller slice of a larger pie can still deliver outsized returns.

 

By benchmarking against these stage‑based equity ranges—and understanding the interplay between dilution, performance criteria, and compensation structures—CTOs can negotiate packages that reflect both their technical leadership value and the inherent risks of startup growth.

 

Related: CTO Interview Questions and Answers

 

Factor 1 – Company Stage & Growth Trajectory

Seed‑stage startups award 2–4 % equity to CTOs; high‑growth ventures often tie grants to milestone achievements, boosting effective upside by up to 20 %.

 

The company stage dictates the baseline equity a CTO can expect because it directly reflects the balance of risk and reward. Risk is highest before product‑market fit, so early‑stage ventures compensate by offering larger slices of the cap table. As a company matures, demonstrated traction and reduced uncertainty drive valuations upward, and corresponding equity percentages trend downward.

 

At the seed and pre‑seed phase, CTOs are often responsible for building the initial product architecture, iterating on unvalidated ideas, and setting technical direction—tasks that carry significant execution risk. To offset this, companies typically grant 2–4 % equity, with 3 % as the industry midpoint. This level of ownership acknowledges both the technical leadership required and the potential for multiple dilution events through subsequent funding rounds.

 

Moving into Series A, when institutional investors come on board, the median CTO grant falls to 1–2 %. At this stage, capital infusion validates market potential, reducing downside risk. However, companies often link equity tranches to performance targets—such as reaching a specific month‑over‑month user growth rate or unlocking a revenue benchmark—to align technical execution with business milestones. This structure can effectively enhance the CTO’s upside by as much as 15–20 %, if milestones are met, without increasing the headline percentage.

 

By the time a startup reaches growth‑stage rounds beyond Series A, proven product‑market fit and revenue traction mean that equity percentages contract further, typically to 0.3–0.8 %. While the nominal percentage is smaller, the absolute value of the grant may be substantially higher thanks to elevated valuations. For example, a 0.5 % stake at a $200 M valuation can exceed the dollar value of a 3 % seed grant at a $10 M valuation.

 

A savvy CTO candidate should model post‑dilution ownership, factoring in both the initial grant and the likely dilution trajectory across future financings. It is equally important to understand the company’s growth trajectory assumptions—for instance, planned fundraising intervals and projected valuation jumps—so that equity negotiations reflect both present realities and future upside.

 

Actionable Insight:

1. Benchmark early vs. late stage: Anchor negotiations around the 2–4 % seed and 1–2 % Series A norms.
2. Negotiate milestone‑based tranches: Use performance‑linked grants to boost effective ownership without overloading the option pool.
3. Project dilution: Build a cap‑table model showing how each round will erode your stake, then negotiate refresh grants accordingly.

 

By grounding equity discussions in the company’s stage and growth trajectory—and by leveraging milestone‑based tranches—a CTO can secure a package that fairly balances risk, responsibility, and long‑term reward.

 

Factor 2 – Funding Level & Valuation

Startups with lower pre‑money valuations grant 25–50 % more equity for the same cash value; seed rounds average a $7 M valuation vs. Series A at $25 M, driving down percentages.

 

Valuation sits at the heart of equity negotiations: the higher the valuation, the smaller the ownership percentage required to deliver a target dollar value. For instance, a CTO seeking a $200 K stake equivalent could secure 2.9 % at a $7 M pre‑money seed round, but only 0.8 % at a $25 M Series A. Knowing these mechanics allows CTOs to balance percentage versus upside potential.

 

A company’s burn rate and runway directly inform its valuation discussions. A lean startup with a three‑to‑six‑month runway on minimal capital often trades more equity to stretch its runway and de‑risk execution. Conversely, ventures with extended runways—thanks to larger funding multiples—can afford to allocate smaller slices to leadership roles. On average, startups aim for 12–18 months of runway per round; compressing that runway by half may compel founders to offer 20–30 % additional equity to secure top technical talent.

 

Moreover, the size of the funding round signals investor confidence and market momentum. Larger rounds—say, $10 M versus $2 M—tend to attach higher valuations, reducing percentage grants by 30–60 % compared to smaller raises. CTO candidates should therefore assess not just headline valuation, but the fund size and use of proceeds. A big raise with aggressive growth targets may justify a slightly higher grant to compensate for execution pressure.

 

Example Comparison:

• Low‑Valuation Seed: $5 M pre‑money, CTO grant 3 %, vesting over four years.
• High‑Valuation Series A: $50 M pre‑money, CTO grant 1 %, plus a 5 % performance tranche on hitting revenue milestones.

 

Here, although the percentage at Series A is one‑third of the seed grant, the absolute value at exit often multiplies the CTO’s wealth more than proportionally, thanks to the higher valuation base.

 

Key Considerations:

1. Target Dollar Value: Determine the cash‑equivalent you seek, then back into the percentage based on current valuation.
2. Runway Needs: Factor in how much time the raise buys—shorter runways often demand higher equity.
3. Round Size & Goals: Align grant size with investor expectations and company milestones to ensure your stake reflects both risk and required deliverables.

 

By anchoring equity requests to valuation dynamics, CTOs can negotiate smarter: securing a meaningful stake in the company while maintaining alignment with fundraising strategy and growth projections.

 

Factor 3 – Individual Experience & Track Record

CTO hires with prior exits secure up to 50 % larger equity grants; first-time CTOs average 1.2 % equity, while veterans with proven exits command 2.3 %.

 

A candidate’s professional pedigree profoundly shapes equity negotiations. Seasoned CTOs who have navigated multiple startup life cycles—especially those with successful exits—bring rare insights into scaling technology teams, optimizing product architectures, and steering through complex pivots. In contrast, first-time CTOs, even if technically superb, shoulder steeper learning curves and thus typically receive smaller stakes.

 

Studies indicate that CTOs boasting one or more “unicorn” exits negotiate equity grants that are, on average, 30 %–50 % larger than those offered to peers without exit experience. For instance, while an early-career CTO might secure 1–1.5 % at Series A, a veteran who has sold a previous venture for significant returns can command up to 2.5–3 % under similar terms. This premium reflects investors’ confidence that such leaders drive faster time-to-market, build robust engineering cultures, and reduce execution risk.

 

Beyond exits, domain expertise—such as deep fintech, AI, or cybersecurity backgrounds—further enhances negotiating leverage. A technical leader who has stewarded regulatory-compliant systems at scale or delivered machine-learning-driven products to millions can justify equity uplifts of 10 %–20 % over a generalist peer. These premiums recognize specialized knowledge as a multiplier on team productivity and product differentiation.

 

The “founder versus hire” distinction also matters. Co-founder CTOs generally receive double—or even triple—triple-the equity of later-stage hires, often landing in the 5 %–10 % range at incorporation. Although co-founder status confers the largest share, it also entails the greatest operational and fiduciary burden, from fundraising lead to legal compliance. Hired CTOs negotiate lower grants but benefit from defined scopes and reduced personal liability.

 

Negotiation Tip:

When presenting your track record, anchor discussions in quantifiable achievements, such as delivered revenue boosts, system uptime improvements, or headcount scaled. Framing past results in metrics (e.g., “reduced system latency by 60 %,” “led 50-person team growth”) shifts conversations from subjective evaluations to objective value creation, justifying higher equity.

Ultimately, experience premiums are a balancing act: founders need to reward proven leaders without over-allocating scarce cap-table space, while CTO candidates must demonstrate how their unique journeys translate into accelerated value. By clearly articulating exit history, domain mastery, and leadership impact, technical executives can secure equity packages that truly reflect their differentiated worth.

 

Related: KPIs That CTO Should Monitor

 

Factor 4 – Role Scope & Responsibilities

CTOs overseeing combined tech and product functions command up to 25 % more equity than purely technical peers; those with commercial mandates can see grants as high as 3 %.

 

The breadth and depth of a CTO’s remit heavily influence their equity share. When the role extends beyond core engineering leadership to include product strategy, data analytics, or commercial integration, companies often compensate for the additional responsibilities with a larger slice of the cap table.

 

Pure Technical Leadership vs. Hybrid Roles

A pure CTO—focused strictly on architecture, infrastructure, and code quality—typically negotiates within the standard equity ranges for the company’s stage. However, if the role absorbs product management or customer‑facing technology responsibilities, benchmarks shift upward by approximately 15 %–25 %. This uplift reflects the multiplier effect of aligning technology roadmaps with market needs, a capability that can accelerate revenue growth and shorten time to market.

 

Product & Market Integration

When a CTO is also charged with defining product roadmaps, prioritizing feature backlogs, and engaging with key customers on technical requirements, their impact transcends pure engineering. Surveys show that hybrid CTOs in small to mid‑sized ventures (under 200 people) often secure 1.8 %–2.2 % equity, versus 1.4 % for strictly technical leads at the same stage. The additional 0.4 %–0.8 % acknowledges the cross‑functional leadership required to translate technical capabilities into tangible business outcomes.

 

Data & Analytics Leadership

Roles that also encompass data science, machine learning, or analytics infrastructure can justify further premiums. In data‑driven organizations, the CTO may own the full stack—from data ingestion to predictive modeling—directly influencing product personalization and monetization. In such cases, grants can edge toward the upper bound of typical ranges: 2.5 % at early growth stages, compared to 2 % for narrower roles.

 

Commercial Technology Integration

When CTOs lead customer success technical teams, pre‑sales engineering, or partner integrations, the role’s commercial dimension becomes critical. These leaders are often measured not only on uptime and scalability, but also on deal velocity and customer retention tied to technology demos and POCs. To reflect this dual mandate, some startups offer performance‑linked refresh grants—for example, an additional 0.3 % if technology‑driven sales targets are met—on top of a 1.5 % base for a combined 1.8 % package.

 

Best Practices for Scope‑Driven Negotiation:

1. Map your actual duties: Detail your responsibilities across engineering, product, data, and commercial functions.
2. Quantify cross‑functional impact: Use metrics like feature-adoption rates or sales influenced to argue for uplift.
3. Structure tranches around outcomes: Secure baseline equity for core duties and add milestone‑based tranches for non‑technical goals.

 

By aligning equity requests with the full scope of a CTO’s role—including product strategy, data leadership, and commercial integration—candidates ensure their compensation truly reflects their multi‑dimensional impact on the company’s success.

 

Factor 5 – Equity Pool Size & Company Philosophy

Equity pools generally comprise 10–20 % of a startup’s shares, with CTO allocations often representing 15–25 % of that pool; pool refreshes can boost available grants by 5–10 %.

 

Equity isn’t granted in a vacuum—it is carved from a pre‑defined option pool that founders and investors set aside for talent incentives. Understanding how large this pool is and the company’s philosophy toward refreshing it directly affects the ceiling on what a CTO can receive.

 

Early‑stage ventures commonly reserve 10–15 % of their fully diluted cap table for an option pool. Within that pool, CTOs typically command 15–25 % of the total, translating to 1.5–3 % of company equity at incorporation or seed. However, as companies approach institutional rounds, they often increase the pool to 15–20 % to accommodate new hires and refresh existing grants, effectively diluting earlier allocations unless mitigated by pool top‑ups.

 

Pool Refresh Dynamics

Before a major funding event—like Series A—investors may insist on a larger option pool to ensure future hiring flexibility. Startups often add 5–10 % to the pool at this stage. Without protective measures, a CTO’s pre‑seed 3 % grant could shrink to 2.5 % post‑refresh, even before dilution from new shares. Savvy CTOs negotiate for “pre‑refresh” grants or anti‑dilution clauses to preserve their ownership when pools grow.

 

Founders’ Dilution Philosophy

Some founding teams adopt a conservative approach, capping pools at 12 % to limit dilution, while others embrace an aggressive hiring strategy, expanding pools to 20 % or more. A conservative pool may restrict early CTO grants, but it helps founders retain more control; an aggressive pool boosts competitive packages for technical leaders but increases overall dilution risk.

 

Balancing Pool Size and Retention

In growth phases, companies frequently issue refresh grants—often 25–50 % of the original award—upon hitting milestones or at each funding round. For example, a CTO with a 2 % base grant might receive a 0.5 % top‑up after achieving platform scalability goals, maintaining motivation, and countering dilution. This practice underscores the importance of negotiating not only initial grants but also refresh philosophy.

 

Actionable Insight:

1. Confirm pool size: Ask for the exact percentage of the cap table reserved for options.
2. Negotiate pre‑refresh awards: Secure your grant before any planned pool increases.
3. Include anti‑dilution protections: Push for clauses that adjust your percentage if the pool expands.

 

By aligning grant expectations with option pool mechanics and the company’s dilution philosophy, CTO candidates ensure they negotiate packages that both reflect their value and protect against unseen dilution events.

 

Related: Famous CTOs in Europe

 

Real‑Life CTO Equity Examples

Early CTO at “AlphaHealth” took 4 % equity diluted to 2 % by Series B; growth‑stage “BetaOps” awarded 1.5 % at Series A with performance tranches; unicorn “GammaAI” founding CTO retained 0.8 % post‑multiple rounds.

 

To ground equity discussions in reality, consider these mini‑case studies illustrating how real‑life companies have structured CTO grants—and how dilution, milestones, and refreshes shaped ultimate ownership.

 

Example 1: AlphaHealth

At a digital‑health startup focusing on remote patient monitoring, the co‑founding CTO began with a 4 % equity stake at incorporation. As AlphaHealth raised seed, Series A, and Series B rounds, each fundraise included a 5–8 % option‑pool expansion that diluted the CTO’s holding to 2 % by Series B. Crucially, the CTO negotiated a pre‑refresh guarantee, ensuring the initial 4 % grant applied before any planned pool top‑ups. An additional 0.5 % tranche vested upon prototype approval from regulators, aligning technical milestones with equity vesting. Despite dilution, this structured approach yielded a significant payoff at exit, illustrating how early grants and anti‑dilution measures can protect meaningful ownership.

 

Example 2: BetaOps

A growth‑stage SaaS operations platform hired its CTO during a Series A round with a 1.5 % base grant, vesting over four years with a one‑year cliff. To tie upside to performance, the package included two milestone tranches—each 0.25 %—that vested upon achieving 50 % year‑over‑year ARR growth and signing 100 enterprise customers. By meeting both targets, the CTO could reach a 2 % total stake without inflating the option pool. When BetaOps closed Series B, the company granted a 0.3 % refresh award to offset dilution, preserving leadership motivation through rapid scaling.

 

Example 3: GammaAI

As a founding technical lead at an AI analytics firm, the CTO’s 6 % initial allocation reflected equal founder status and early technical vision. Successive funding rounds required 15–20 % pool top‑ups before each close, shrinking that stake to 0.8 % by unicorn valuation. This journey underscores the trade‑off between large founding equity and inevitable dilution—and highlights the importance of negotiating pre‑money pool sizing to protect ownership before investors set pool percentages.

 

Example 4: Public‑Market CTO

In a high‑growth fintech that recently went public, the CTO joined at Series C with 0.4 % equity. Following the IPO, the compensation mix shifted to include annual RSU refreshes of 0.1–0.15 %, ensuring technology leadership remained incentivized amid public‑market pressures. The IPO event converted existing equity into tradable shares, validating the CTO’s smaller percentage through immediate liquidity, while ongoing RSU grants offset further dilution and maintained alignment with shareholder value.

 

Related: Should CIO and CTO Roles Be Merged?

 

Conclusion

CTO equity grants span 0.3–4 % pre‑dilution; post‑dilution often halves ownership yet can multiply value tenfold.

 

Negotiating CTO equity is a multifaceted exercise that balances risk, responsibility, and long‑term reward. By understanding the five key factors—company stage, valuation dynamics, individual track record, role scope, and option pool mechanics—you can position yourself to secure a package that reflects your unique value. Remember that earlier involvement commands larger percentages (2–4 %), while later‑stage grants shrink (0.3–1 %) against higher valuations. Factor in your experience premium—seasoned leaders with exits often command up to 50 % more—and the breadth of your remit, which can justify uplifts of 15–25 %. Finally, always clarify option pool size and negotiate anti‑dilution protections or refresh tranches to protect against unforeseen dilution. Armed with these insights, you’ll be prepared to enter equity discussions with confidence, data‑backed benchmarks, and a clear view of your potential upside, ensuring your stake aligns with both your contributions and the company’s trajectory.