Equity in SaaS: How Much Should It Really Matter to Candidates?

Equity has become one of the most talked-about elements of compensation in SaaS, particularly within startups and high-growth technology companies. For candidates, the opportunity to own a small part of the business can represent more than potential financial upside; it can create a sense of ownership, impact and participation in the company's future.

But how much should equity really influence a career decision?

At Oakstone International, we regularly speak with commercial and leadership candidates who include equity among their priorities when considering a new opportunity. However, as conversations progress and candidates gain a deeper understanding of the role, company and potential earning opportunity, those priorities can change.

We recently saw exactly this during a search.

A candidate initially placed considerable importance on receiving equity. They wanted to feel that they were part of the impact they would be making on the organisation and that, if they contributed significantly to its future growth, they would participate financially in that success.

On the surface, it was an entirely understandable expectation.

However, the opportunity itself began to change how the candidate viewed the importance of equity.

The scope of the position meant they would have significant influence over the business and its future performance regardless of whether they held shares. At the same time, the owner had no current intention of selling the company, which raised an important question: what would the equity actually mean in practical terms?

As the candidate understood the opportunity more thoroughly, their priorities shifted. Rather than focusing predominantly on ownership, they became more interested in the earning potential associated with the position, the scope of their responsibilities and what they could achieve professionally.

It highlights something candidates and hiring companies should consider; equity should be understood before it is prioritised.

Why Is Equity So Attractive in SaaS?

Startups and scale-ups have traditionally used equity as a powerful part of their employee proposition.

For an early-stage company competing against larger businesses capable of offering higher salaries, established brands and greater job security, equity can provide an alternative incentive. A candidate might accept a lower salary today in exchange for the possibility of participating in significantly greater value creation tomorrow.

There is also an emotional element.

Equity can reinforce the idea that employees are building something rather than simply working for it. This can be particularly attractive to senior commercial hires joining early-stage SaaS companies where their individual contribution could materially influence revenue growth, international expansion, funding rounds or the development of a GTM organisation.

The potential financial upside can also be significant.

Having Equity and Making Money from Equity Are Different Things

One of the biggest misconceptions surrounding startup equity is that receiving shares or options automatically represents significant financial value, however this is untrue. The eventual value depends on what happens to the company. A SaaS business could achieve rapid growth, raise successive funding rounds and ultimately be acquired or complete another liquidity event that allows employees to realise value from their equity.

Another company could remain privately owned for decades. Others may struggle to grow at the expected rate, raise additional capital under different terms, experience dilution, or fail altogether. That doesn't necessarily make equity unattractive. It simply means candidates should understand what they are being offered rather than comparing packages based purely on the percentage attached to them.

A smaller equity stake in a highly successful company could ultimately be considerably more valuable than a larger stake in a company that never reaches a meaningful liquidity event. Equally, a role without equity could potentially provide greater financial reward through salary, commission, bonuses and other incentives. The complete package matters.

What Does the Equity Actually Represent?

Before making equity a deciding factor in a job search, candidates should ask questions about how the scheme works.

• What type of equity is being offered?

• What is the vesting period?

• Are there performance conditions?

• What happens if you leave?

• How has the company's valuation changed?

• Has the business raised external investment?

• Could future funding rounds dilute your position?

• What would need to happen before you could actually realise the value?

• Most importantly, what is the company's long-term strategy?

If a founder intends to build towards an acquisition within five years, the relevance of equity may be very different from a profitable founder-owned SaaS business whose owner has no intention of selling. Neither business model is inherently better for the candidate, but the context changes the meaning of the equity considerably.

Candidates therefore need to look beyond "Do I get equity?" and ask "How could this equity realistically become valuable to me?"

Equity Should Be Considered Alongside the Opportunity

Compensation is only one element of a career decision, particularly for experienced SaaS professionals. A candidate might be comparing a role offering equity against another offering none, but that doesn't necessarily mean the first opportunity has greater long-term potential.

Consider the scope of the role.

• Will you be responsible for building a team?

• Is the company entering a new market?

• Are you responsibility for creating a GTM strategy?

• Will you own a meaningful revenue target?

• Will you be reporting directly to the CEO?

• Will you be responsible for building a function from scratch?

Those responsibilities could significantly strengthen someone's experience and future market value. Then there is immediate earning potential.

For commercial SaaS professionals, a strong commission structure, achievable targets and meaningful accelerators could generate significant earnings without relying on a future liquidity event. A candidate may ultimately decide that an opportunity to earn considerably more over the next three years is more attractive than holding equity whose future value and liquidity remain uncertain. The answer will be different for everyone, which is exactly why understanding motivation during the recruitment process is so important.

Hiring Companies Need to Understand Candidate Motivation Too

The same principle of understanding motivations applies to employers too. Simply including equity in a compensation package doesn't automatically make an opportunity compelling.

If you are hiring an experienced CRO, VP Sales, CCO or another senior GTM leader, explaining that the package includes equity is only the beginning of the conversation. Candidates will increasingly want to understand the wider story.

• Why is the business offering equity?

• How could value be created?

• What impact will this person have on that outcome?

• What is the founder's long-term ambition for the company?

For some candidates, genuine ownership will remain one of their biggest motivations. For others, autonomy, earning potential, career progression or the opportunity to build something may ultimately matter considerably more.

Recruitment processes need to uncover those motivations rather than assume them.

Understanding What Really Matters

One of the advantages of a thorough recruitment process is that priorities can be explored rather than simply recorded on an initial candidate brief. Someone might begin a search saying equity is essential, only to discover that what they actually want is impact. Another candidate may say compensation is their primary motivation before discovering that greater autonomy matters more.

Equity can be an extremely attractive component of a SaaS compensation package, and in the right circumstances it can create significant wealth, but its presence alone should not determine whether an opportunity is attractive.

Candidates need to understand the business, its trajectory, ownership structure, potential exit opportunities and the terms attached to their equity. They should then weigh that potential future value against what is available today: salary, commission, scope, influence, progression, experience and earning potential. The most important question is what equity could realistically mean, and whether it makes or breaks an opportunity.

Recommended Reading

Is Title Inflation a Problem When Screening Candidates?

Why Early-Stage SaaS Companies Should Hire for Adaptability Before Experience

Why GTM SaaS Sales Recruiters Are the Hidden Advantage for Series A-C Growth Acceleration

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SaaS Equity FAQS

• How does equity work in a SaaS company?

  Equity in a SaaS company gives an employee the opportunity to own a stake in the business, usually through shares or stock options. The potential value depends on factors such as the company’s valuation, growth, future funding, vesting terms and whether a liquidity event such as an acquisition or IPO occurs. Candidates should understand the specific terms of an equity package before considering it part of their expected compensation.

• Is equity worth it when joining a SaaS startup?

  Equity can be valuable when joining a SaaS startup, but its future value is not guaranteed. A startup may grow significantly and create substantial value for shareholders, but it may also remain privately owned, experience dilution or never reach a liquidity event. Candidates should therefore assess equity alongside salary, commission, bonuses, career progression, company trajectory and the overall scope of the opportunity.

• What questions should candidates ask about equity before accepting a SaaS job?

  Before accepting an equity package, candidates should ask what type of equity they are receiving, how much they are being offered, the vesting schedule, exercise terms, what happens if they leave, the company's current valuation and how future funding could affect their ownership. It is also important to understand the company's long-term strategy and how employees may eventually realise the financial value of their equity.

• Should I choose a higher salary or equity in a SaaS job?

  Choosing between a higher salary and equity depends on your financial priorities, appetite for risk and confidence in the company's future. Salary and commission provide more immediate and predictable earning potential, while equity may offer greater long-term upside but with considerably more uncertainty. Candidates should compare the complete compensation package alongside the role's responsibilities, progression opportunities, influence and potential impact on their longer-term career.