How Often Do/Should Start-up Employees Get Raises?

First. If a company can afford annual raises to at least stay current with cost of living, they should do so.

Second. Start-ups often consider cash to be a basic foundation with all incentives coming in the form of an increase in value of equity compensation (stock options, etc…).

Third. Raises are given for three common reasons, 1. Cost of Living Adjustments (COLA) increase in the cost of just being a living human being (see the first comment above) 2. Merit. Better pay related to better performance, skills, etc.  3. Promotion. You have new responsibilities, title etc that drive a new level of pay.

Merit increases may not happen at most start-ups.  This is mostly because people are just expected to perform well.

While most public companies give promotional raises as they occur, start-ups may give them infrequently or never. But, the cool thing about a start-up is that they don’t need to  follow “the rules”.  They can give a raise to someone in advance of a promotion.  They can more easily give a far bigger promotion (skipping multiple levels) if it is warranted.

Mostly people at start-ups need to be prepared to ask for, and defend the need for, raises.  If you cannot define a reason better than “but I can make more someplace else”, you really aren’t trying hard enough.