Reference

GTM and Startup Recruiting Glossary

This glossary defines the compensation, equity, recruiting and go-to-market terms used at venture-backed startups. Each entry gives a plain-English definition in its first sentence, followed by the nuance that usually causes confusion. It covers how sales pay is structured, how startup equity actually vests, what the different recruiting engagement models commit each side to, and which hiring metrics measure what.

What do startup sales compensation terms mean?

Sales pay is split between guaranteed and earned money. These are the terms that describe how that split works.

The Bridge Group's 2026 research across 158 B2B companies put median account executive OTE at $200,000 against a median quota of $960,000 — a quota-to-OTE ratio of 4.6x — and found ramp time had reached 6.2 months, the highest in that study's history.

The Bridge Group · June 2026

On-Target Earnings (OTE)

On-target earnings (OTE) is the total cash a salesperson earns in a year if they hit exactly 100% of quota, combining base salary and variable compensation.

OTE is a target, not a guarantee. Only the base half is contractual; the variable half depends on performance. Two roles with identical OTE can differ enormously in risk — a 50/50 split puts half the number at risk, a 70/30 split puts less than a third at risk.

Base Salary

Base salary is the fixed, guaranteed portion of cash compensation, paid on a regular schedule regardless of performance.

For go-to-market roles the base is only part of the picture, which is why quoting a sales salary as a single number is usually misleading. Non-quota-carrying roles are typically all base.

Variable Compensation

Variable compensation is the performance-dependent portion of pay — commission, bonus, or both — earned by hitting defined targets.

Sometimes called incentive comp or the variable. For an account executive it is usually commission against a revenue quota; for a sales engineer or customer success manager it may be a bonus against a team or retention target.

Pay Mix

Pay mix is the ratio of base salary to variable compensation within on-target earnings, written as two numbers that sum to 100 — commonly 50/50, 60/40 or 70/30.

A 60/40 mix on $200,000 OTE means $120,000 base and $80,000 variable. Mix generally tracks how much control the role has over the outcome: closing roles carry more variable, roles that influence rather than close carry less.

Quota

Quota is the revenue or bookings target a salesperson is expected to achieve in a period, and the denominator against which variable compensation is calculated.

Usually expressed annually and measured quarterly. The ratio of quota to OTE is a useful sanity check on whether a plan is realistic.

Commission Rate

Commission rate is the percentage of closed revenue paid to the salesperson who closed it.

It can be flat across all deals or tiered, rising once quota is passed. The rate alone says little without knowing the quota and the mix it sits inside.

Accelerator

An accelerator is an increased commission rate that applies to revenue closed above quota, paying more per dollar for over-performance than for on-target performance.

The mirror image is a decelerator, a reduced rate below a performance threshold. Accelerators exist to make the top of the range worth chasing rather than sandbagging into the next period.

Draw

A draw is an advance against future commission, paid to a salesperson before they have earned it.

A recoverable draw is repaid out of later commission; a non-recoverable draw is not. Draws are most common during ramp, when a new hire has no closed pipeline yet.

See also: Ramp Time, Commission Rate, Clawback

Clawback

A clawback is a contractual provision allowing an employer to reclaim commission already paid, typically when the underlying deal churns, is refunded, or never collects.

Clawback windows vary widely and are one of the more consequential terms in a comp plan, because they determine whether commission is genuinely earned at signature or only at payment.

Ramp Time

Ramp time is the period a new salesperson is given to reach full productivity, during which quota is reduced or waived.

Ramp length tends to follow sales-cycle length: a role selling a long enterprise cycle cannot reasonably carry full quota before roughly one cycle has elapsed.

How does startup equity work?

Equity is the part of a startup offer candidates most often accept without understanding. These are the mechanics.

Stock Options

A stock option is the right to buy a set number of company shares at a fixed price, rather than a grant of the shares themselves.

Because it is a right to buy, an option is only worth something if the company's value rises above the price you can buy at. Options at US startups are typically ISOs for employees or NSOs for contractors and advisors, which are taxed differently.

Strike Price

The strike price, also called the exercise price, is the fixed per-share price at which an option holder can buy their shares.

It is set at the fair market value on the grant date, determined by a 409A valuation. The gap between strike price and current value is the paper gain.

Vesting

Vesting is the schedule over which an employee earns the right to their equity grant, rather than receiving it all at once.

A four-year schedule with a one-year cliff is the most common arrangement at US venture-backed startups. Leaving before an amount vests forfeits it.

Cliff

A cliff is an initial period during which no equity vests at all, with the entire portion for that period vesting at once when it ends.

With a standard one-year cliff on a four-year grant, someone leaving at eleven months keeps nothing; at twelve months and a day they keep a quarter. After the cliff, vesting usually continues monthly or quarterly.

Fully Diluted Shares

Fully diluted shares are the total shares that would exist if every option, warrant and convertible instrument were exercised or converted.

It is the only honest denominator for an ownership percentage. A grant described as a percentage is close to meaningless unless you know whether the denominator is fully diluted or merely issued shares.

409A Valuation

A 409A valuation is an independent appraisal of a private company's fair market value per share, used to set the strike price of employee options in compliance with US tax rules.

Typically refreshed annually or after a priced round. It is deliberately a different, usually lower, number than the preferred-share price investors pay.

What are the different recruiting engagement models?

Agencies and in-house teams work under a handful of distinct structures. The differences are about commitment and exclusivity, not effort.

Contingent Search

Contingent search is a recruiting engagement in which the fee is payable only if the client hires a candidate the recruiter introduced.

The recruiter carries the risk, so contingent roles are often worked non-exclusively and alongside other searches. Best suited to roles with a broad candidate market where speed matters more than exclusive focus.

Retained Search

Retained search is an exclusive recruiting engagement in which the client pays a portion of the fee upfront to secure dedicated capacity on the role.

The upfront commitment buys prioritisation and, usually, a defined process and reporting cadence. Standard for senior and executive hires, and for confidential searches where a role cannot be advertised.

Embedded Recruiting

Embedded recruiting is a model in which a recruiter works inside the client's team, systems and process for a fixed period, typically billed as a monthly fee rather than per hire.

Sometimes called RPO at larger scale. Suits companies hiring several roles at once, where per-hire fees add up faster than dedicated capacity costs.

Executive Search

Executive search is recruiting for senior leadership roles — typically VP level and above — usually conducted as a retained, exclusive and confidential engagement.

Sourcing

Sourcing is the practice of proactively identifying and contacting candidates who have not applied, as opposed to processing inbound applications.

Most senior go-to-market hires are sourced rather than inbound, because the strongest candidates are usually employed and not searching.

Talent Pipeline

A talent pipeline is a maintained pool of qualified candidates kept warm for roles that exist now or are expected later.

Applicant Tracking System (ATS)

An applicant tracking system (ATS) is software that stores candidates and moves them through defined hiring stages, acting as the system of record for a company's hiring.

Which hiring metrics actually matter?

Four numbers describe most of what is knowable about a hiring process. They are frequently conflated.

Ashby's 2026 Talent Trends Report, drawn from more than 54 million applications across 93,000 jobs, put median time to first fill at 52 days for junior roles, 71 days for senior roles and 75 days for technical roles.

Ashby · data to March 2026

Time to Fill

Time to fill is the number of days from a role being opened to an offer being accepted.

It measures the whole process including the time spent defining the role, which makes it the number a hiring manager feels. Distinct from time to hire, and the two are often reported interchangeably by mistake.

Time to Hire

Time to hire is the number of days from a candidate entering the process to that candidate accepting an offer.

It measures the experience of the person who got the job, so it is the better proxy for whether a process is fast enough to hold a competitive candidate's attention.

Offer Acceptance Rate

Offer acceptance rate is the percentage of extended offers that candidates accept.

A persistently low rate usually points at compensation set below market, a process that took too long, or a role that was sold differently from how it was scoped.

Pass-Through Rate

Pass-through rate is the percentage of candidates who advance from one hiring stage to the next.

Read stage by stage it localises where a process is failing: a low rate at first screen suggests a sourcing or calibration problem, while a low rate at final stage suggests the bar moved mid-process.

Quality of Hire

Quality of hire is a measure of how well hired candidates perform once in the role, usually assessed on ramp speed, performance rating, or retention past a defined period.

The only hiring metric that measures the outcome rather than the process, and the hardest to instrument, because it cannot be known until months after the hire.

What do go-to-market job titles mean?

Go-to-market titles are used inconsistently across companies. These are the common meanings at venture-backed startups.

Sales Development Representative (SDR)

A sales development representative (SDR) is a salesperson responsible for qualifying inbound interest and generating qualified meetings, which they hand to a closing rep rather than closing themselves.

A business development representative (BDR) is the same function weighted toward outbound prospecting. Many companies use the two titles interchangeably.

Account Executive (AE)

An account executive (AE) is a quota-carrying salesperson who owns deals from qualified opportunity through to close.

Usually segmented by deal size — SMB, mid-market, enterprise — with quota, sales cycle and pay mix all scaling with segment.

Founding Account Executive

A founding account executive is the first dedicated salesperson at a startup, hired to sell alongside the founders and to establish a repeatable sales process rather than to execute an existing one.

The role blends closing with the work a sales leader would normally do — building the pitch, qualifying the market, defining the process — which is why it usually carries more equity than a later AE hire at the same base.

Revenue Operations (RevOps)

Revenue operations (RevOps) is the function that owns the systems, data and process connecting sales, marketing and customer success.

In practice: CRM architecture, forecasting, territory and quota design, and the reporting leadership makes decisions from.

Chief Revenue Officer (CRO)

A chief revenue officer (CRO) is the executive accountable for all revenue-generating functions, typically sales, marketing and customer success together.

Distinct from a VP of Sales, who usually owns the sales organisation alone. The distinction matters when scoping a search: the two roles draw from different candidate pools.