Wouldn’t life be easy if we just had the cash to hire the best of the best at market salaries and the upside to realize more as your business succeeds. Unfortunately, that’s not the case in entrepreneur land. So to attract and retain talent, you need to bring your creativity to designing compensation that combines financial rewards with other opportunities not available outside an entrepreneurial venture.

• It’s not likely that you will be able to afford market salaries for good talent. But if you are too far below market salary – such as 50 percent below – it will be hard to attract talent. While you may be able to bridge the gap with some of the other techniques discussed below (i.e., equity and incentives), the gap cannot be so large that the risk is too great for the candidate.
• One of the most common ways for startups to attract talent without spending a ton in salaries upfront is to offer your employees some equity in the business. This will not only save you money at the time you need it most but also aligns your employees’ goals with yours more so than if they were merely collecting a paycheck. They know that their hard work will be rewarded in spades when their tiny piece of the pie grows larger and larger over time. Equity is the great compensation equalizer in startup companies—the bridge between an executive’s market value and the company’s cash constraints.
• Most sales professional are accustomed to having a commission structure as part of their compensation package. Generally this entails a payout of a percentage of the sale amount to the employee. While it is not common for commissions to be part of non-sales or business development personnel in larger companies, you can add commission to the compensation packages of non-sales personnel to bridge the gap of cash compensation.
• Profit Sharing. The way you choose to give you team members “a slice of the pie” can vary depending on the size of your business. For smaller companies that are self-funded, profit sharing can be a great motivator. Typically this involves working with a bank or other institution to create a plan under which a portion of your proceeds will be split among your employees and placed into a holding account for distribution.