How to keep your development team happy and motivated for the long haul

In the fast-moving world of startups, it’s extremely difficult to keep a highly valuable dev team engaged and on board for multiple years. Given the above, how can you count on your people to be equally motivated and committed to your company’s success?

Stock options are a very popular option choice in startups to keep their employees motivated. They give developers the right to buy company stock at a specific price, which can be a big win if the company grows and goes public. This form of equity compensation aligns the team’s interests with the company's goals, encouraging them to stick around and help drive growth.

RSUs are less complex than stock options and still offer significant value. They provide employees with company shares that vest over time, ensuring your team benefits from the company’s success even if the stock price declines. The downside, though, is that they become taxable upon vesting. 

An ESPP is a benefit that allows employees to purchase company stock, often at a discount, through payroll deductions.  It also motivates employees to ‘own’ the company’s future and risk creating a strong bond. Even though they are rarely offered in tech startups, ESPPs can be an important piece of your compensation puzzle.

Phantom stocks give employees company stock without actually issuing the company’s stock to them. SARs (Stock Appreciation Rights) provide a right of payment equal to the appreciation in price per share of a designated number of shares between the date of grant and exercise. Instead, they take a cash payout or shares of equal value only if the company meets certain benchmarks. This binds the rewards to the company's growth and inspires employees to work in a direction that leads towards the company’s growth.

Performance shares vest when employees meet specific Key Performance Indicators (KPIs). This approach ensures that rewards are directly linked to individual and team performance, driving productivity and commitment.

Starting with no equity compensation is okay, but it’s crucial to offer competitive salaries and exciting projects. A great product, a modern tech stack, and no legacy code can attract and retain top talent. Remember, you can always introduce equity compensation programs later as the company grows.


Using one or more of these compensation tools, you can ensure your development team remains motivated and has “skin in the game,” driving them to create a successful startup. Partner with experts like us to help you implement these strategies and ensure your team’s loyalty for years to come. Let's grow together!


Remember, investing in your team is investing in your future. Choose the right mix of compensation strategies to keep your developers happy and your startup thriving.