> Most startups are not competing for talent that would otherwise be making $400k.
But why not?
Obviously you shouldn't only hire $400k-TC engineers. But if you're going to hire a team of 5-10, wouldn't it make sense to hire at least one more-senior engineer to help lead and mentor the more-junior ones?
When I was an early-stage startup founder, I was told by various advisers* that $150k should be the absolute upper limit on engineer salaries, and that I should try to talk engineers down to $110k or even sub-$100k by selling them on the "vision". I was told I should make up the difference in equity, but also that I shouldn't give an employee more than 1% in equity or maybe 2% for a "rockstar".
Do the math here. A company raises a typical seed round at $6M valuation cap, and is offering 2% over four years (considered VERY generous!). Even if we pretended that was preferred stock rather than common, it's worth $30k/yr. So you're trying to hire senior engineers while offering less than half their previous total compensation.
What ends up happening is you hire people straight out of college or away from other startups. But you cannot hire a senior Google engineer.
In my opinion, a tech-oriented startup should plan that exactly one of their first 5-10 engineers should be a senior engineer for whom they offer a salary of $200k-$250k and equity of 3-5%. Aim to poach an L6 from Google with this offer. (But only hire one such engineer early on. A team with too many senior engineers can be even worse than a team with none.)
Or alternatively, make sure one of your co-founders is such an engineer and is able to focus their time entirely on engineering, not other founder duties.
* Advisers all say different things, often contradictory. It's probably best not to listen to them, TBH. Yes, that advice applies to this comment as well, and even this footnote. Have fun.