June 30, 2026
Adapted from a Thelander panel, “The Founder’s Guide to Capital, Talent & Compensation,” with Jodie Thelander (J. Thelander Consulting), Chris (Perceptive Advisors), and Ellen & Joanna (JM Search biopharma executive search).
For a founder, compensation and capital are the same conversation. How much you raise, how you build your team, and how you structure equity all pull on each other — and getting them right early is what separates companies that recruit smoothly from those negotiating every hire from a position of weakness. This panel brought together a compensation-data firm, a life-sciences investor, and two executive recruiters to talk through what they are seeing across the market.
Capital Is Concentrating in Fewer, Sharper Companies
For the second straight year, capital is concentrating in fewer, more selective opportunities. Companies are getting sharper on their scientific hypotheses and disciplined development plans, and the market is showing an almost U-shaped curve: large pools of capital pour hundreds of millions into some Series A rounds to build big teams, while at the other end companies run capital-efficient, lean models to keep post-money valuations reasonable and attract the next round. The tension throughout is how much to raise to reach a genuine value inflection versus staying lean enough to climb to the next rung before diluting further.
Your Cap Table Is a Talent Strategy, Not Just a Financing Tool
The recruiters made the sharpest point of the session: in early biotech, you often cannot win on cash compensation alone. Equity is the lever that lets founders attract experienced leaders who could command more elsewhere — and it signals to a candidate that they have real skin in the game to reach the inflection point that makes the equity worth something. Candidates have gotten more sophisticated, asking pointed questions on the front end about the hiring plan and future raises. How a company answers reveals whether it has planned thoughtfully or is making it up as it goes.
Benchmark by Total Financing Raised — and Watch Geography
The most consistent way to read equity data is by percentage of fully diluted shares, viewed against total financing raised to date (series labels can mean wildly different things company to company). The data set has also shifted: tech now makes up over 30% of it, thanks to cross-fertilization with life sciences, and the old “95% US, mostly Bay Area” concentration is gone. Post-COVID comfort with virtual teams means a CMO in New York and a head of regulatory in California — with real UK activity now coming out of Oxford and Cambridge, which carries its own compensation data.
When to Build Compensation Infrastructure
The inflection point where a company must “put an infrastructure around compensation” is when it moves past a lean, scattered team toward the value-inflection hiring surge — bringing on dozens or hundreds of people to push an asset toward the FDA goal line. That is the moment to formalize how you pay chiefs and VPs (and the cash/equity mix), then extend structured pay plans down to scientists, technical staff, and administrative roles.
The Option Pool: Not Dilution, But Infrastructure
A recurring reframe: setting up an option pool is not dilution — it is infrastructure. Without a well-planned pool, every critical hire becomes a fresh negotiation with the board and the cap table; with one, a company has flexibility and avoids reactive fixes. The data shows remarkable stability: the pool sits around 10–15% across stages, from sub-$5M seed rounds (often academic spinouts) through $90M+ later stages. Above 15% tends to get questioned by investors, so lean and virtual teams that keep the pool low are attractive.
Investors typically wait for a healthy Series A or B to align with new investors on a reasonable pool size, since it affects dilution. And while founders with direct equity will be diluted over financings — nobody promises to make them whole — firms often grant additional vested equity to founders who keep working in the C-suite, as relief rather than a full make-whole.
Non-Founder CEO Equity Hovers Around 5%
For a non-founder life-sciences CEO, equity clusters around 5% and stays remarkably stable at both the median and 75th percentile across financing levels. Executives now run the math themselves: someone joining a company that just raised $200M has runway and may be less sensitive to the absolute percentage, while someone with a shorter runway scrutinizes how a 5% grant erodes to 2.5% after the next raise — which is where anti-dilution conversations come in. For truly proven “Ferrari” talent from pharma, companies will pay above what the data suggests, because the premium for a track record of success is real.
Get the Initial Grant Right, and Refresh Is Easy
If you set the number correctly at the start, refresh and replenishment are straightforward — you top up to keep pace as dilution nudges a 5% holder down toward 3.5–4%. The trouble comes when the initial grant was wrong: a CEO who has slipped to 2% is now a burden on the cap table, and correcting it comes at the investors’ expense. The lesson repeated throughout: get it right the first time.
Fractional Executives and Board Compensation
Lean models lean heavily on consultants, advisors, and fractional C-suite executives — often domain experts (a cancer specialist may not fit an immunology or CNS company) — sometimes incentivized with equity out of fear of losing them, or priced hourly by backing into what a full-time hire would earn. For non-investor board members, one-time equity dominates (about 47% of firms use it), with life-science outside directors often wanting a cash-and-equity combination; early stage skews to equity to preserve cash, shifting toward a mix as a company approaches public markets. Executive chair compensation is heavier still, with sizable one-time equity grants.
The Bottom Line
After a tough four-to-five-year stretch, the panel sees positive momentum returning — the biotech IPO market starting to reopen, and M&A, PIPE, and SPAC activity picking up. Their unified message: it is never too early to plan your compensation infrastructure. Understand who you will pay, how you will pay them, and which levers you have. The cash-and-equity mix will look different at each stage, but it levels out over time — and the sooner you get it right, the fewer problems you will face.
This article is adapted from a Thelander panel and is intended as general educational information, not legal, tax, or investment advice. For guidance specific to your company, consult qualified compensation and legal advisors.