The pay gap is real and defensible. A senior backend engineer in Latin America runs roughly $36k-$54k a year. In Eastern Europe it is closer to $42k-$60k. The same person in a US tier-one market costs $150k-$200k. When you are pre-seed and every month of runway is a live decision, hiring your first senior engineer outside the US can nearly double the months you get from the same salary line.
So founders location-adjust the salary. Good instinct. Then they try to location-adjust the equity by the same ratio, and that is where a strong offer quietly falls apart.
Salary is a local market. Equity is a bet on one shared outcome
Salary tracks the cost of living and the local labor market. A great engineer in Krakow or Sao Paulo genuinely costs less than one in San Francisco, and paying the local rate is not exploitation, it is how markets work. Discounting the base is fine.
Equity is different. Equity is a claim on the single company you are all building. If your startup exits, it exits at one valuation for everyone. The engineer in Sao Paulo who took a founding-level risk carried the same risk as the one in Austin. There is no local discount on the outcome, because the outcome is not local. The moment you hand a global hire a materially smaller grant for the same role and stage, you are telling them their bet is worth less than a US colleague's bet on the identical company. Anyone who has worked inside a US-backed startup already knows the liquidation-preference math, and they will read that offer for exactly what it is.
What parity actually looks like
For a first senior or founding engineer before a Series A, grants commonly land somewhere between 0.33% at the median and above 1% at the high end, depending on how early and how critical the person is. The number you choose is your call. What matters is that you choose it based on the role and the stage, then apply it regardless of geography.
Concretely: adjust base by location, keep equity at the US benchmark for the role. A LatAm senior at $48k base with a US-benchmark 0.8% grant is a coherent, honest offer. The same person at $48k base with a location-adjusted 0.25% grant is an offer that says you view them as cheaper labor, not a founding bet.
Why the discount backfires in practice
Three things go wrong when you shave the equity.
First, you lose the person you actually wanted. The strongest global engineers have options with US-headquartered companies that already pay parity equity. Your discounted grant self-selects for people who either do not understand the math or cannot get a better offer. Neither is who you want as employee number one.
Second, first hires set the template. The second and third engineers will hear what the first one got. A geography-based equity ladder becomes a permanent, resented artifact in your cap table conversations, and it surfaces at the worst possible moment, usually during diligence when someone maps grants against roles.
Third, the savings are trivial. The difference between a 0.25% and a 0.8% grant is a fraction of a point of a company that may be worth nothing. You are trading a large hit to trust and retention for a rounding error on an outcome that is not guaranteed. That is a bad trade at any stage, and an especially bad one when the person is load-bearing.
The overlap advantage you are underpricing
There is a reason LatAm keeps winning US seed-stage searches specifically: time zones. A senior engineer three hours off your time, not thirteen, means real-time standups, same-day code review, and debugging a production issue together instead of leaving notes for the morning. That overlap is worth more at five people than almost any salary saving, because at five people the cost of a slow feedback loop is measured in shipped features, not payroll. Price the overlap into the decision, not just the salary.
How to structure the offer without overthinking it
Decide the grant from the role and stage first, in a vacuum, before you know where the person lives. Write it down. Then set the base to the local senior market. If you find yourself wanting to cut the equity because they are remote and cheaper, that is the signal to stop and re-read the first section.
If you are hiring across borders for the first time, get the employment mechanics right too, because a founding engineer you direct daily is usually not a contractor for long. Managing that relationship well from day one is its own skill, and it is worth reading how founders handle running a distributed offshore team before the first offer goes out.
The honest version of a global offer is simple: local base, global equity, real ownership. Everything else is a story you are telling yourself about saving money you were never really going to save.
FAQ
Should equity ever be adjusted for location?
For base salary, yes, adjust to the local market. For equity, no. Equity is a claim on one company with one exit valuation, so the same role at the same stage should get the same grant regardless of where the person lives.
What equity is normal for a first senior engineer before Series A?
It varies widely, but grants commonly range from around 0.33% at the median to over 1% for the earliest, most critical hires. Pick the number from the role and stage, then apply it consistently.
Is it cheaper overall to hire a senior engineer abroad?
Usually yes on salary, often by 40% to 60% versus a US tier-one market. But the real advantages for a seed-stage team are frequently time-zone overlap and availability, not just the base rate. Factor those in rather than optimizing for salary alone.
We are not sure whether to hire at all yet. What then?
Then the first question is not where to hire but whether a full-time senior hire is the right shape of help right now. If you want a second opinion on the decision before you spend the runway, book a call to talk it through before the offer goes out.