Lantern: Team Structure & Compensation
Overview
This document outlines the founding team structure, roles, responsibilities, and compensation framework for Lantern. All founding team members begin as equity stakeholders with compensation deferred until revenue generation.
Founding Team Philosophy 🎯
Core Principles
- Founding members: All C-level roles are founding positions with equity ownership
- Compensation: Cash compensation begins once the app generates sustainable revenue (target: post-pilot validation and initial merchant traction)
- Equity-first: Founding members receive equity grants that vest over 4 years with 1-year cliff
- Lean operation: Minimize burn rate during pilot; transition to salary once product-market fit is validated
Revenue Trigger for Compensation
- Target threshold: Sustained monthly recurring revenue (MRR) of 10,000+ OR successful seed funding close
- Timeline estimate: 6–12 months post-pilot (optimistic), 12–18 months (conservative)
- Interim: Founders may receive stipends or expense reimbursements for critical business expenses
C-Level Roles & Responsibilities
Chief Executive Officer (CEO)
Role: Strategic vision, fundraising, board management, and overall business leadership
Key Responsibilities:
- Set company vision, mission, and strategic roadmap
- Lead fundraising efforts (seed, Series A) and investor relations
- Manage board of directors and stakeholder communications
- Own company culture and hiring strategy
- Final decision-maker on product direction and pivots
- External partnerships and business development
- Legal and compliance oversight
Ideal Background:
- Product/business experience in tech or location-based platforms
- Strong communication and storytelling for fundraising
- Existing founder with web/app analyst background (YouTube) fits naturally
Time Commitment (Pre-revenue): 40–60 hours/week Equity Range: 25–40% (founder shares) Salary (Post-revenue): 100,000–150,000/year initially, scales with funding
Chief Operating Officer (COO)
Role: Day-to-day operations, merchant success, operational efficiency, and execution
Key Responsibilities:
- Oversee merchant onboarding, retention, and success programs
- Manage pilot operations and coordinate merchant acquisition
- Build and optimize operational workflows (onboarding, support, billing)
- Own merchant NPS and satisfaction metrics
- Coordinate cross-functional teams (product, sales, support)
- Vendor and contractor management
- Operational budgeting and resource allocation
Ideal Background:
- Service industry professional with venue/merchant relationships (co-founder partner)
- Operations experience in hospitality, retail, or small business management
- Strong customer success and relationship-building skills
Time Commitment (Pre-revenue): 30–50 hours/week Equity Range: 20–30% (co-founder shares) Salary (Post-revenue): 80,000–120,000/year initially, scales with funding
Chief Technology Officer (CTO)
Role: Technical architecture, engineering leadership, product development, and infrastructure
Key Responsibilities:
- Own technical architecture and technology stack decisions
- Lead product development (PWA, Firebase backend, integrations)
- Manage engineering team (hire, mentor, performance)
- Ensure security, privacy, and compliance (GDPR, CCPA, data encryption)
- Build and maintain CI/CD pipelines, testing, and deployment infrastructure
- Technical due diligence for investors
- API design and third-party integrations (Stripe, POS systems)
Ideal Background:
- Full-stack or backend engineer with 5+ years experience
- Expertise in Firebase, React, PWA development
- Security and privacy experience (encryption, GDPR)
- Startup or fast-paced product development experience
Time Commitment (Pre-revenue): 40–60 hours/week Equity Range: 15–25% (founding technical lead) Salary (Post-revenue): 120,000–160,000/year initially, scales with funding
Chief Financial Officer (CFO)
Role: Financial strategy, fundraising support, unit economics, and financial operations
Key Responsibilities:
- Own financial planning, budgeting, and forecasting
- Build and maintain financial models (LTV, CAC, unit economics)
- Manage accounting, bookkeeping, and financial reporting
- Oversee billing, payment processing, and merchant payouts (Stripe)
- Support fundraising (investor decks, due diligence, financial metrics)
- Tax compliance, legal entities, and corporate structure
- Financial risk management and fraud detection
Ideal Background:
- Finance or accounting background with startup experience
- Strong modeling skills (Excel, financial projections)
- Experience with SaaS or marketplace unit economics
- Familiarity with Stripe, QuickBooks, or similar financial tools
Time Commitment (Pre-revenue): 20–30 hours/week (part-time until revenue) Equity Range: 5–10% (founding CFO, part-time initially) Salary (Post-revenue): 80,000–120,000/year initially, scales with funding
Chief Marketing Officer (CMO)
Role: User acquisition, brand strategy, growth marketing, and merchant marketing
Key Responsibilities:
- Own user acquisition strategy (organic, paid, viral, partnerships)
- Build and manage brand identity and positioning
- Lead growth marketing experiments (referral programs, Wave adoption, gamification)
- Manage merchant marketing materials and campaign templates
- Oversee content marketing, social media, and PR
- Analytics and attribution (track CAC, LTV, conversion funnels)
- Partnership marketing (influencers, local communities, events)
Ideal Background:
- Growth marketing or performance marketing experience
- Consumer app or marketplace experience
- Strong analytical skills (attribution, funnel optimization)
- Content creation and storytelling skills
Time Commitment (Pre-revenue): 30–40 hours/week Equity Range: 5–10% (founding CMO) Salary (Post-revenue): 80,000–120,000/year initially, scales with funding
Chief Growth Officer (CGO)
Role: Revenue growth, merchant sales, strategic partnerships, and market expansion
Key Responsibilities:
- Own merchant acquisition strategy and sales pipeline
- Build and manage merchant sales team (SDRs, account executives)
- Lead geographic expansion strategy (San Diego → LA → SF)
- Strategic partnerships (POS systems, local business associations, hospitality groups)
- Revenue optimization (pricing experiments, upsells, retention)
- Track and optimize merchant LTV and churn
- Manage key account relationships and enterprise deals
Ideal Background:
- B2B sales or business development experience
- SaaS or marketplace sales experience
- Strong relationship-building and negotiation skills
- Experience scaling revenue teams
Time Commitment (Pre-revenue): 30–50 hours/week Equity Range: 5–10% (founding CGO) Salary (Post-revenue): 80,000–120,000/year initially, scales with funding
Equity Distribution Framework
Sample Founding Equity Split (Total: 100%)
| Role | Equity Range | Rationale |
|---|---|---|
| CEO | 25–40% | Vision, fundraising, ultimate accountability |
| COO | 20–30% | Co-founder, merchant relationships, operational execution |
| CTO | 15–25% | Technical leadership, product development |
| CFO | 5–10% | Financial strategy, part-time initially |
| CMO | 5–10% | User growth, brand building |
| CGO | 5–10% | Revenue growth, merchant sales |
| Employee pool | 10–15% | Reserved for future hires (engineers, designers, ops) |
Note: Exact splits negotiated based on individual contributions, time commitment, and funding dilution strategy.
Vesting Schedule
- Standard vesting: 4-year vesting with 1-year cliff
- Cliff: No equity vests until 12 months of continuous service
- Monthly vesting: After cliff, equity vests monthly over remaining 36 months
- Acceleration: Single-trigger acceleration on acquisition (50% immediate vest) or double-trigger (100% if role eliminated)
Compensation Framework (Post-Revenue)
Salary Ranges (Phase 1: Post-Pilot, Pre-Seed)
Once monthly recurring revenue (MRR) reaches 10,000 OR seed funding closes:
| Role | Annual Salary (USD) | Notes |
|---|---|---|
| CEO | 100,000–150,000 | Below-market to preserve runway |
| COO | 80,000–120,000 | Below-market to preserve runway |
| CTO | 120,000–160,000 | Competitive for technical talent |
| CFO | 80,000–120,000 | Part-time initially (0.5–0.75 FTE) |
| CMO | 80,000–120,000 | Below-market to preserve runway |
| CGO | 80,000–120,000 | Commission incentives on top of base |
All values in USD. Note: Tables avoid dollar signs to prevent rendering issues.
Salary Ranges (Phase 2: Seed Funded, Revenue Validation)
After seed round (500K–1M) and validated revenue model:
| Role | Annual Salary (USD) | Notes |
|---|---|---|
| CEO | 150,000–200,000 | Market-rate adjusts upward with funding |
| COO | 120,000–160,000 | Full-time operational lead |
| CTO | 160,000–200,000 | Competitive retention for technical lead |
| CFO | 120,000–150,000 | Full-time financial operations |
| CMO | 120,000–160,000 | Growth marketing at scale |
| CGO | 120,000–160,000 | Plus commission on revenue targets |
Incentive Compensation
- CGO commission: 5–10% of new merchant ARR (annual recurring revenue)
- CMO bonus: Tied to user acquisition cost (CAC) and monthly active user (MAU) targets
- All roles: Annual performance bonuses (10–20% of base) tied to company OKRs
Interim Compensation (Pre-Revenue)
Options for Founders
While building toward revenue trigger:
- Expense reimbursement: Business expenses (travel, tools, services) reimbursed
- Stipend: Small monthly stipend (500–2,000/month) if founders need financial support
- Sweat equity: Pure equity until revenue or funding; standard for early-stage startups
- Deferred salary: Accrue salary that converts to cash or equity upon funding
Recommendation: Pure sweat equity with expense reimbursement is cleanest and preserves capital for product development and pilot.
Hiring Roadmap (Beyond Founding Team)
Phase 1: Pilot (Months 0–6)
- Contractors:
- Part-time QA tester (contract, 1,000–2,000)
- Part-time designer for merchant materials (contract, 2,000–5,000)
- Part-time customer support (contract, 15–25/hour)
Phase 2: Post-Pilot (Months 6–12)
- First hires (equity + salary):
- Merchant Success Manager (40,000–60,000 + 0.5–1% equity)
- Full-stack Engineer (80,000–120,000 + 0.25–0.75% equity)
Phase 3: Seed Funded (Months 12–24)
- Team expansion:
- 2–3 additional engineers (backend, mobile, frontend)
- Sales Development Representative (SDR) for merchant outreach
- Marketing Manager or Growth Lead
- Operations Coordinator
Decision-Making & Governance
Board Composition (Initial)
- CEO (chair)
- COO (co-founder)
- 1–2 independent advisors or angel investors
Board Composition (Post-Seed)
- CEO
- Lead investor (Seed or Series A)
- Independent board member (experienced operator or advisor)
Decision Authority
- CEO: Final decision on strategy, fundraising, pivots
- COO: Operational decisions, merchant policies, support workflows
- CTO: Technical architecture, security, infrastructure
- CFO: Financial policies, budgets, contracts
- CMO: Marketing strategy, brand decisions
- CGO: Sales strategy, pricing, partnerships
Consensus model: Major decisions (pivots, funding, acquisitions) require majority board approval.
Key Considerations & Trade-offs
Why Defer Compensation?
- Preserve runway: Every dollar saved extends product development and pilot timeline
- Align incentives: Equity-only compensation aligns founders with long-term success
- Standard practice: Common in early-stage startups; demonstrates commitment to investors
Risks of Deferred Compensation
- Founder burnout: Long runway without income can stress personal finances
- Retention risk: Competitive offers may lure founders away before vesting
- Mitigation: Set clear revenue triggers; provide stipends if needed; transparent communication
Equity Dilution Strategy
- Founding team: 85–90% total (including employee pool)
- Seed investors: 10–20% (typical seed round)
- Series A investors: 20–30% (typical Series A round)
- Target founder ownership post-Series A: 40–60% (sufficient control and motivation)
Next Steps for Team Formation
Immediate (Pre-Pilot)
- [ ] Finalize founding team roles and equity splits (legal agreement)
- [ ] Sign founder agreements with vesting schedules and IP assignment
- [ ] Set up Delaware C-corp or LLC (standard for US startups)
- [ ] Issue restricted stock or stock options to founders
- [ ] Draft employee handbook and equity grant policies
Months 1–6 (During Pilot)
- [ ] Identify contractor needs (QA, design, support)
- [ ] Build job descriptions for first hires (engineer, merchant success)
- [ ] Create equity grant framework for employees (option pool)
- [ ] Establish performance review and OKR processes
Post-Pilot (Months 6–12)
- [ ] Hire first employees (see roadmap)
- [ ] Formalize compensation committee (CEO, CFO, board member)
- [ ] Build salary bands and equity guidelines for future roles
- [ ] Transition founders to market-rate salaries (if revenue or funding achieved)
Summary: Compensation Timeline
| Milestone | Founder Compensation | Team Size | Focus |
|---|---|---|---|
| Pre-pilot (Months 0–3) | Equity only + expenses | 2–4 founders + contractors | Product build, merchant recruitment |
| Pilot (Months 3–6) | Equity only + expenses | 2–4 founders + contractors | Validate product-market fit |
| Post-pilot (Months 6–12) | Equity + stipend or deferred salary | 4–6 (founders + first hires) | Scale merchants, refine revenue model |
| Seed funded (Months 12–18) | Equity + market-rate salary | 8–12 (team expansion) | Geographic expansion, product features |
| Series A (Months 18–36) | Equity + competitive salary | 15–30 (scaled team) | National expansion, profitability |
This document is a living framework. Update equity splits, salary ranges, and hiring roadmap as the company evolves and funding progresses.