Tech Startups Must Adapt to Compete with Big Tech Salaries

Shares of startups have long been hampered by their inability to match the sizable salaries offered by big tech companies. However, with the current AI race intensifying, companies like Meta and OpenAI are willing to pay million-dollar salaries, further exacerbating the compensation divide. Despite this, early-stage startups are not doomed, as they can develop a compensation strategy that is generous, fair, and flexible, according to founders and experts who spoke at TechCrunch Disrupt 2025. Yin Wu, the co-founder and CEO of equity management software Pulley, emphasized that startups should not try to compete with big tech companies in terms of salary. Instead, they should focus on being charitable in their compensation packages, regardless of their financial limitations. "A stable tech company and a startup don't generally attract the same potential candidates to begin with," Wu said on stage at TechCrunch Disrupt in October. "Startups should be as charitable as they can in their compensation packages, regardless of their inability to match a big tech company's paycheck." Wu also shared her perspective on equity, stating that startups should be more generous than they think they should be when it comes to offering equity to employees. "I think it is unlikely, if the company is really growing, that you're going to regret giving away too much equity," she said. "But I think it's very likely that you're going to regret not giving away enough equity." The current AI landscape has created a new challenge for startups, as they struggle to attract and retain top talent. With companies like Meta and OpenAI offering million-dollar salaries, startups must find alternative ways to compete. According to Wu, this can be achieved by offering a compensation package that is not just about salary, but also about benefits, equity, and work-life balance. In addition to Wu's perspective, other experts at TechCrunch Disrupt 2025 emphasized the importance of flexibility in compensation packages. "Startups should be willing to adjust their compensation packages as they grow and change," said one expert. "This can include offering more equity or benefits to employees as the company's financial situation improves." The current status of startups in the AI landscape is one of challenge and opportunity. While they may not be able to match the salaries offered by big tech companies, they can still attract top talent by offering a compensation package that is generous, fair, and flexible. As the AI landscape continues to evolve, startups will need to adapt and innovate in order to remain competitive. In terms of next developments, it will be interesting to see how startups respond to the current AI landscape and the challenge of attracting and retaining top talent. Will they continue to focus on offering competitive salaries, or will they shift their focus to other benefits and perks? Only time will tell, but one thing is certain: the future of startups in the AI landscape will be shaped by their ability to adapt and innovate in the face of changing market conditions.