To answer your question narrowly, some VC or incubator came up with this title. It would be interesting to trace the history, or maybe, maybe someone here is or

To answer your question narrowly, some VC or incubator came up with this title. It would be interesting to trace the history, or maybe, maybe someone here is or knows the inventor of it. It simply means early employee and carries no other significance. It generally implies some technical seniority but I've seen this given to lower level or lower experienced folks as well. It's interesting that internally, if ranks (levels) are shared, that when the company reaches a hundred or hundreds of employees, the early engineers will be readily identifiable and perhaps command a certain respect or deference. I find it to be a form of title inflation, used to attract early employees. You are correct, that founders will have an order of magnitude more equity. But also, note that non-denominated plain ole "engineers" will have an order of magnitude less equity than founding engineers. Surely you must agree that they also carry nearly the same risk. As an employee earning startup market rate ($160-$180k) your risk is on par with those who come on at A or B rounds, so yes this is a sweet deal IMO, title inflation aside. In a very real way, your risk is actually much less than later employees, even series A. By that time, the equity is much more expensive to exercise. At "founding engineer" time, it's cheap enough that you don't even have to think about it. Just early exercise it.