I've been talking to quite a few people who are interested in joining, and I had to look up the best way to explain the equity structure for employees. And the following 3 links seem to have the most relevant information for a startup equity structure:
- http://www.thedailymuse.com/toolsskills/getting-start-up-equity-everything-you-need-to-know/
- http://www.quora.com/How-much-equity-(-)-should-be-in-the-employee-pool-at-an-early-stage-(angel-round)-company
- http://mashable.com/2011/07/18/negotiating-equity-tips/
Bottomline is to give 0.2-0.5% for regular employees and contractors. 1% for directors. And 3% for VP levels. If they have any cash contributions, they could take more equity.
One of the most important things is to implement 1 year cliff and 4 year vesting period, even for the founders. If things don't work out with your employees or co-founders, you have one year to let them go without giving up your equity. It sounds harsh, but it provides protection for the company. Trust me, you will run into plenty of people who make a lot of promises and never follow through.