My partner and I have been able to bootstrap the business so far and develop a fair amount of functionality. Hiring contractors, though, has prevented us from moving the product development along as quickly as we would have liked. Hence the need for a full time developer that has some skin in the game. My thoughts are the following: Salary of around $100K per year Either performance based bonuses or vesting schedules to earn a modest amount of equity. Goal: Incentivize the developer from working hard for us but ideally not looking to give away equity.
SImple and easy. Cash + equity. Equity should be based on a vesting schedule, most common and probably most "fair"
-1 year cliff (no stock vests until he/she is with the company for a year. This prevents bad fits from walking away with a chunk of the company)
-4 year schedule
-Monthly vesting for the next 36 months
This is pretty much the gold standard for tech hires.
The % equity is going to be up to you and the new hire. Ballpark 2-3% depending on a multitude of factors. For a better benchmark, I'd recommend checking out AngelList's hiring product. You can certainly see what other companies are offering in your area in terms of cash/equity.