The LinkedIn Economic Graph published hiring and compensation data in early 2025 showing continued divergence between large tech company salaries and those at smaller companies, particularly outside of AI and ML roles. That gap has been widening for about four years now, and 2026 doesn’t look like a turning point.
So let me put some actual numbers on the table, with the caveat that compensation ranges move fast and any specific figure I cite will be approximate by the time you’re reading this.
Base salary, stated simply
A mid-level software engineer (think: 3 to 6 years of experience, solid but not staff-level) earns roughly $160K to $220K base at large tech companies in the US. The same engineer at a well-funded Series B startup earns somewhere between $140K and $185K base. That’s an 11 to 15 percent gap in raw salary, which is meaningful but not catastrophic.
Seed-stage startups are a different story. Base salaries at pre-Series A companies often land between $90K and $130K for mid-level roles. The gap there is real and it compounds: lower base today means smaller raises calculated off a smaller number, smaller 401k match (if there is one), and a longer run of financial tightness before any liquidity event.
The Stack Overflow Developer Survey 2024 found median developer salaries in the US at approximately $165K, with significant spread based on company size and specialization. AI/ML specialists at companies of any size showed the highest growth, with some early-stage AI companies paying base salaries competitive with FAANG for the right profile.
Total comp tells a very different story
Big tech total comp is large because the stock component is real, liquid, and predictable. An L5 engineer at Google in 2025 earns somewhere between $280K and $380K total depending on location and performance rating. Most of that stock vests quarterly. You can sell it on Wednesday if you want to pay off your student loans. That liquidity matters more than most salary comparison articles admit.
Startup equity is valued at whatever the most recent 409A or funding round price was, but that number is entirely theoretical until there’s an exit. Most options have a 10-year exercise window but a 90-day post-termination window, meaning if you leave before a liquidity event, you have 90 days to buy your options out-of-pocket at the strike price. For a mid-size package at a well-funded company, that might be $80,000 you have to write a check for. Most people don’t, and the equity evaporates.
I don’t have precise data on what percentage of startup equity packages ultimately return more than an equivalent big tech package would have earned over the same period. My honest estimate, based on conversations and publicly available exit data, is that it’s under 15%. That might be wrong. But it should calibrate how you think about the “lottery ticket” framing.
The AI/ML exception is real but narrow
There is a genuine exception to the big-tech-pays-more story, and it’s sitting right at the intersection of AI research, ML engineering, and large model infrastructure. Early-stage AI companies backed by top-tier investors have been paying base salaries of $250K to $350K plus significant equity to researchers with the right profile. Some of those packages at well-funded AI labs in 2024 and 2025 were structured to be competitive with or better than what Google DeepMind offers.
This is real. It also applies to maybe 3% of software engineers. If you’re not in applied ML or AI infrastructure research, the premium startup salary story mostly doesn’t apply to you, and treating it as a general market signal will lead you to misjudge your own options.
Benefits gap gets glossed over
A few things that don’t show up in salary comparisons: large tech companies subsidize health insurance heavily. Google and Meta employees pay almost nothing for family health coverage that would cost $18,000 to $24,000 per year in premiums on the open market. That’s $1,500 to $2,000 per month of after-tax value that doesn’t appear in the base salary comparison.
Startups, even well-funded ones, rarely match this. A typical Series A company covers individual premiums but requires employees to cover dependents at partial or full cost. On a family plan, that’s often $800 to $1,200 out of pocket per month. Adjust for that before you do your back-of-envelope comparison.
Same applies to 401k matching. Many large tech companies match 50 cents on the dollar up to 6% of salary, which on a $180K base is $5,400 per year you’re leaving on the table if the startup doesn’t match at all.
What actually makes the startup worth it financially
If you want startup equity to matter, the specific conditions are: (1) Series A or later so there’s a real product and some market signal, (2) you join at an early employee number (ideally under employee 50), (3) the company reaches a $500M or higher exit within 7 years, and (4) you hold your options through the exit rather than letting them expire when you leave.
All four conditions have to be true simultaneously. The expected value math still probably doesn’t beat Google over a four-year period, but at least it’s in the ballpark. If the company is seed-stage and you’re employee 120, the equity case is very weak.
Go in with your eyes open. The people who get burned are usually the ones who accepted a startup offer at a $40K salary haircut because they told themselves the equity would cover the difference. Sometimes it does. Mostly it doesn’t.