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Ask HN: Should I join startup for less-than-expected equity?

16 点作者 cuca_de_chumbo大约 10 年前
- startup is SF-based company<p>- pre-series-A<p>- significant traction already with customers you&#x27;d recognize<p>- likely to raise good series-A round<p>- about 8 engineers, 18 to 20 employees in all<p>- me -- 20+ years significant SW dev experience<p>- me -- would work remotely most of time<p>- offer: $130K range, 0.2% equity (seems low-ball to me, or inexperience on part of founders ... or lack of respect for the position or me)

22 条评论

rgbrgb大约 10 年前
First off, it&#x27;s probably not lack of respect. If you really think that and you can&#x27;t get it out of your head, then don&#x27;t join the company. To me, that seems like a market salary. For better or worse, experience doesn&#x27;t count for that much in the market for software engineers.<p>You could probably trade some salary for equity. It&#x27;s all about your personal situation and how much cash you need. For me, 130k would be a bit overkill and at this point I&#x27;d try to trade 30k for an extra half point or so (I&#x27;m betting they&#x27;d cap the equity at .5% total or something though).<p>That said, if they&#x27;re hiring a 20th employee at 130k and you&#x27;re confident that there&#x27;s enough money in the bank + revenue that doing so makes sense (that&#x27;s something to check), then the risk factor is a lot lower than a 4 person startup burning through seed capital who will offer you the 1-2% you&#x27;re after. There are a lot of those in SF that you can join. You probably won&#x27;t have a nice office or free meals but you&#x27;ll make a bigger dent at a smaller scale and therefore get a bigger piece of a smaller pie.<p>In short, from the info you gave, I don&#x27;t think they&#x27;re necessarily low-balling you. But if you do, don&#x27;t join. If you&#x27;re good, there are at least 50 other companies in the bay who will give you an offer like that tomorrow.
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habosa大约 10 年前
I&#x27;ve never worked at an early-stage company, so I have more questions than answers. Isn&#x27;t 0.2% basically nothing? Even if GoogleSoftBook buys the company right now for $100M, you get (at best) $200k. And that&#x27;s not going to happen. Probably more money will be raised, your 0.2% will be diluted, and a $100M exit is rare. So you&#x27;ll end up with less than 1yr of salary for all that risk and lost salary&#x2F;benefits in the meantime.<p>I know it&#x27;s not all about the money, but in this conversation we are only talking about money.
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cuca_de_chumbo大约 10 年前
Also, I&#x27;d be leaving a job I really don&#x27;t like at a Silicon Valley spinoff. $150K salary, 0.75% equity, shiny CEO with regular Fox-Business-News appearances, rising company notoriety, selling into a hot market. The company will never raise more &quot;venture&quot; funding, the parent will structure future injections as debt (at a reasonable interest rate, likely, but probably less onerous than VC).<p>This current company has a highly dysfunctional development culture, no automated testing, poor choice of deployment vehicle, a VP high on the DK spectrum. I can&#x27;t bear it.<p>The place has a very high likelihood of acquisition in the next 2 years. It&#x27;s a question of how long product dev can go on before the product implodes vs how quickly the shiny CEO can attract a good buyer for the polished turd. I lose a bit of my soul every day.
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_b大约 10 年前
The offer isn&#x27;t generous but it is reasonable.<p>Sam Altman estimated that employees 10 through 30 combined should get at least 5% of the equity, That implies an average of 0.25%, which is fairly close to 0.2%.<p><a href="http:&#x2F;&#x2F;blog.samaltman.com&#x2F;employee-equity" rel="nofollow">http:&#x2F;&#x2F;blog.samaltman.com&#x2F;employee-equity</a><p>If you want to work for the company, equity is important to you, and you think the offer is below was your contribution to the company will be, then negotiate for the right amount of equity.
aetherson大约 10 年前
What do you think you could get in terms of salary at the best-paying company that you could be happy working at?<p>EDIT: Actually, let me expand.<p>1. That does seem like lower-than-expected equity for a senior employee at a small start-up that&#x27;s pre-series-A.<p>2. But on some level, I don&#x27;t think that should be the controlling factor. I&#x27;m assuming here that this is a pretty run-of-the-mill seemingly doing-well pre-series-A startup. That is, it&#x27;ll be at least five years, and probably more like ten, before it monetizes, and the chance of it monetizing is sub-10%. And your options would vest over the course of 4 years with a 1 year cliff.<p>3. So that said, if you&#x27;re going to be there 4 years, and the company is going to do well enough over those 4 years for us to care what your equity is, then I would assume that 4 years from now, you&#x27;ll be a critical member of the leadership team. The company will have had to grow a lot, you&#x27;re senior already, so... right? There&#x27;s plenty of chance to, in that case, have your equity position &quot;right-size&quot; with the company. To, in other words, re-grant stock based on whatever inflation happens and based on how you work out as a member of the inner team of the company.<p>4. And given how far off any equity payout is, and how uncertain it is, I&#x27;d think that your decision to go with the company should be based on salary, what you expect the salary to do in the next year or two, and whether you believe that you can become a member of the leadership team of the company and whether you would enjoy all of that.<p>5. If, on the other hand, this company has some kind of special sauce that means that equity payout is more likely or more near-term, then, well, maybe that justifies the lower equity award.
sharkweek大约 10 年前
I&#x27;ve received equity in three companies in my 10 year career thus far and have seen exactly zero dollars from any of it.<p>Maybe I&#x27;m jaded, but I&#x27;m not sure I would ever again consider the equity portion of a job offer unless it&#x27;s a stock option at a publicly traded company.
webwright大约 10 年前
That is low, but that&#x27;s a big headcount for pre-A-- did they raise a huge seed?<p>That aside, you earn equity with risk, so my question to you would be: &quot;What are you risking?&quot; Certainly there&#x27;s an opportunity cost (you&#x27;re risking not working somewhere else). If you think your work-remotely-market-rate for a non-startup (i.e. no stock) is X, then you are risking X - 130k per year for 0.2%&#x2F;4 (vesting over four years). So if X is $150k, you&#x27;re buying those shares for $80k (4 years of salary difference). Is that a good bet in your eyes? It&#x27;d only be a good bet in mine if I had fairly heroic belief in the startups shot at &quot;unicorn&quot; status or if I was really excited about the work&#x2F;team.<p>However, if you think $130k is a reasonable salary for remote work and the contribution you&#x27;ll be making (it could well be), then the stock is a high-risk bonus.<p>Regardless, you should certainly negotiate for more salary OR equity (whichever you care about more) every time.
smt88大约 10 年前
Equity is worth nothing, especially when it&#x27;s that low. Don&#x27;t even consider the equity when you make this decision.<p>Honestly, a healthy company that really believes in a strong exit in the future should be willing to match your previous salary. You should ask for $150k and skip the equity. If you work there for 5 years, an extra $20k&#x2F;year is worth more than 0.2% in a $50M exit.
wheaties大约 10 年前
Assuming a $100M exit, no dilution, $150k&#x2F;yr elsewhere, no gains from investing the salary difference, same salary raises per year, no additional equity.<p>after 5 years, you net even. Anything longer than that you lose out. Anything shorter, you make more (sans taxes.)<p>Seems like a risky bet to me.
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mbesto大约 10 年前
Two key considerations:<p>- Does the company (and it&#x27;s investors&#x2F;accelerators) have some sort of prestige that many people outside of the company would recognize? (i.e. if you put it on your resume will it look good later)<p>- Ignore equity at this point (as the chances of it really paying off massive dividends are unrealistically low). Is $130k range in line with what you expect to earn?<p>(note - $130k is comfortably livable in pretty much anywhere in the SF Bay area)
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cj大约 10 年前
$130k is well above average for a pre-funded startup in SF - Where are they getting the cash to pay you? Are they profitable?<p>0.2% sounds a bit low.<p>IMO it&#x27;s not a bad starting point for a negotiation. If you&#x27;re expecting something significantly higher, it might makes sense to look at later stage companies (or a company like Google or Facebook if you want to maximize your earning potential)
brudgers大约 10 年前
It doesn&#x27;t sound like it&#x27;s your dream job. It might or might not be good enough for now.<p>I wouldn&#x27;t take the low equity offer personally, at 8 engineers, you&#x27;re not their first hire, and the position is more or less &quot;need another engineer&quot; at this point. On the other hand, it does mean that hiring you in particular is not the priority.<p>It&#x27;s ok to be ok with that and its implications for the way your role will be perceived in the workplace over the short term. It&#x27;s ok not to be ok with that. Working remotely may or may not be worth it.<p>In the end, I suspect that top pay and wow! equity aren&#x27;t going to attach themselves to many <i>advertised</i> remote positions. It&#x27;s when remote work is how a company gets the specific individual they want that those are more likely.<p>Good luck.
lojack大约 10 年前
The first thing I&#x27;d do is look up their funding on AngelList. This can be an indicator of what the equity is worth -- without knowing the terms it&#x27;s only an indicator though. These numbers are also useful for determining how stable the company is. If they have 8 engineers and 10-12 other employees but only had a $500k seed round, it&#x27;s a very risky job -- if its closer to $2m, its a bit safer.<p>As far as actual numbers go, that&#x27;s entirely dependent on what you think you&#x27;re worth, and what you think that equity is worth. You&#x27;re the 21st employee, and they are raising money, so it isn&#x27;t exactly a red flag to me. Treat the equity as a bonus that may never come to fruition.
gyardley大约 10 年前
Almost twenty employees, working remotely so you&#x27;re probably not management, significant traction already, likely access to additional capital - okay, the equity seems a little low for 2015 but not <i>obscenely</i> so. There&#x27;s more equity out there, but for riskier situations - earlier employees at companies with no prospects of further funding at their current level of traction.<p>Since your equity has a relatively small chance of being worth anything anyway, &#x27;significant traction&#x27; or not, I&#x27;d focus on the things that&#x27;ll definitely be a factor in your life - things like the work, the people, your salary, and so on.
omgitstom大约 10 年前
Talk to them about it.<p>Are you excited to join the company? Do you believe in their vision? Do you find excitement in the problems that they are helping their customer&#x27;s solve? Do you feel good cohesion with the founders and the engineering team?<p>Answering those questions are far more valuable in deciding to join a startup vs compensation. The compensation piece, if you feel is low, research and negotiate for it. If you can&#x27;t find a common ground on compensation that would make you happy to work there, then don&#x27;t join them.
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Bahamut大约 10 年前
0.2% is way too low IMO - it&#x27;s possible to get that type of equity from a post-series A startup.<p>That salary is also low for SF based on what I&#x27;ve seen too.
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frozenstorm大约 10 年前
Ultimately it needs to sit well with YOU, right?<p>Negotiate for more equity and weigh<p>- the final offer vs. what you think you could get in the rest of the market<p>- how much happier you&#x27;d be at the new gig vs. waiting around for another gig<p>I know nothing of how much equity is &#x27;fair&#x27; for early hires but ultimately it&#x27;s about where you&#x27;ll be happiest, money &#x2F; equity aside. Do what makes you happy and you won&#x27;t have regrets.
benwerd大约 10 年前
It&#x27;s probably inexperience. I&#x27;d try and talk them up a bit.<p>But other commenters are right: pay attention to the salary, the benefits and the position itself. The equity is a lottery ticket. I do believe they should correct the amount to make you feel valued, but that&#x27;s the only reason.
heimatau大约 10 年前
I&#x27;d ask for either more money or more equity. Don&#x27;t short change yourself. If your overall goals are just looking for more experience then go for it if you think it would be fun.<p>Corporations assert their power all the time. There is nothing wrong with you asserting your worth. Good luck!
meritt大约 10 年前
The salary is low and the equity is hella low too. You&#x27;d do better to negotiate some sort of bonus structure instead of equity.<p>What do you want outside of financial incentive? Is it something you&#x27;re excited about?<p>What&#x27;s your background? A lot of us are hiring.
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copsarebastards大约 10 年前
0.2% equity isn&#x27;t worth considering. At best it&#x27;s maybe a years&#x27; pay 5 years from now, and the best is not likely to happen. A $20K increase in salary would make you that with much more certainty in 6 years.<p>I&#x27;d look at salaries for your skillset and location on GlassDoor, compare that to the $130K, and make your decision based on that.<p>In any case, I&#x27;d go back to them with a counteroffer. If you want more equity, I&#x27;d ask for 2% and hope for something like 1.2%. But unless you&#x27;re very confident in the direction of the company, I&#x27;d choose salary over equity any day.
iuyoiuyy大约 10 年前
Been there done that. The answer is: No! Think of a start-up founder like a con-man trying to sell you snake oil.
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