4 Key Compensation Guidelines for Founders

As biotech companies remain private for longer and hiring markets begin to rebound, founders must address compensation, equity, and organizational structure earlier in their growth trajectory. In a recent webinar JM Search hosted in partnership with J. Thelander Consulting, featuring Chris Garabedian of Xontogeny, we examined how biotech companies are approaching executive hiring, option pools, and compensation in today’s market. 

Below are a few of the key themes that emerged from the conversation. 

1. Equity Discussions 

For many early-stage biotech companies, cash is limited, so the opportunity to have a stake in the company is essential for bringing experienced candidates to the table. These leaders are looking at equity differently. Instead of asking: “What percentage do I get?” Candidates are examining future dilution, financing plans, and whether the company has enough runway to reach a meaningful value creation point. According to the panel, experienced executives are showing up to those conversations much more informed than they were even a few years ago. As Chris Garabedian, Chairman and CEO of Xontogeny and Portfolio Manager at Perceptive Advisors, observed, “Executives have gotten more sophisticated about understanding when companies plan to raise the next round and how much capital they expect to raise.”  

2. Companies Stay Lean Longer 

Another major shift is the extended period during which companies are operating with lean teams. Many biotech companies are intentionally delaying full-time hiring until they hit key scientific or financing milestones. This has fueled the rise of fractional leadership, for instance part-time CMOs, regulatory leaders, and operators, who help companies advance programs without adding permanent overhead too early on. Garabedian shared that many of the growth stage companies he interacts with are still prioritizing lean operating models: “If you can keep it (compensation expenses) low, that is attractive to investors. We’re seeing more lean teams, virtual teams, fractional C-suite executives.” In some cases, those relationships eventually turn into full-time roles. In others, they simply help companies grow while remaining capital efficient during the earliest stages. 

3. Option Pools  

Option pools and dilution were also topics of conversation. The consensus was straightforward: companies that plan ahead generally have fewer problems later. As Jo Neuman, Principal, noted during the discussion, “The cap table, it’s not just a financing tool. It is your talent strategy. Without it, every critical hire becomes a negotiation with the board.” A well-structured option pool gives management teams flexibility to recruit executives, refresh equity grants, and avoid turning every hire into a board-level negotiation. It also creates clearer expectations for candidates coming into the business.  

4. The Market Is Gaining Momentum 

There was also cautious optimism about where the market is heading. Participants pointed to improving IPO activity, stronger financing conditions, and increased M&A momentum as signs that hiring activity could accelerate over the next few years. Garabedian described the current environment as a meaningful shift from the last several years: “After a four- to five-year tough time for the industry, we’re finally seeing some positive momentum.” If that continues, competition for experienced operators is likely to grow quickly as well, particularly for executives with experience navigating financing, clinical development, and growth-stage company building. 

For founders, that means compensation planning is becoming a more pressing topic of conversation. Increasingly, companies are treating it as part of the broader strategy for scaling the business successfully. To learn more about executive compensation and hiring strategies in today’s biotech market, watch the full webinar here.