[Series B] Sr Director Eng

Uber Pronto
Mar 21 15 Comments

Need some valuation. Planning to leave upon IPO. Currently managing around a dozen Eng.

Current TC: 700K (Base 255K)
Startup: Base (260K) + 0.5% Options

Startup is actually profitable and planning to raise Series C next to expand operations. In Enterprise business area. 170+ Employees target growth to 350 by end of year. Valuation around 100M current.

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TOP 15 Comments
  • Amazon Cynimist
    Cool story bro. Think about what needs to happen for this to be a good move. Lets talk about a 400M exit (300M in upside, half a percent of that is 1.5M, after dilution would be likely around 750k-1M). If that happened in 4 years time, you netted, optimistically, 510k a year. Oh wait, that doesn't look so hot after all. I am guesstimating you would need a 600-800M exit to breakeven with your current (inflated) Uber TC. You will do very well in a unicorn scenario. Estimate chances of these outcomes realistically, and then probability weight option value on exit. Discount for liquidity risk and divide over vesting period to calc your TC. Then again, as an engineering manager overseeing a 12 person team your actual market value is closer to 400-500k tops, assuming you are absolutely amazing in technical and leadership competencies - in short, you have an awesome deal at Uber. 0.5% options is a great offer for series B, but actual value is highly dependent on team, product market fit, market size, execution quality, and luck.
    Mar 21 1
    • Uber Pronto
      OP
      Thanks for this information super helpful on getting the guidance. The TC is for current and then drops after my soon to hit 4 year cliff by 200K or so. So your market value estimate of 500k+ is probably roughly correct.
      Mar 21
  • DoorDash P7gw9j2ha
    If you don't see the company having a reasonable chance to 10x from here and some chance to 25x from here, your risk vs reward ratio doesn't really work in your favor. You are giving up potentially 300k of RSU based compensation every year from top unicorns and FANG. Also, if getting acquired is the company's goal, it may not present any growth to your equity. All the preferred investors need to be paid out before you are. If the valuation doesn't hold up, you may not be getting much.
    Mar 21 0
  • CareZone P|_|N!$H€R
    Your current comp is great!
    1. How many options are 0.5%?
    2. How are you planning on making money from options?
    Mar 21 3
    • Uber Pronto
      OP
      1. 160,000
      2. Sell back to company when I leave to liquidate it
      Mar 21
    • CareZone P|_|N!$H€R
      Can you sell back to the company though? Those won't be RSUs. You will have to buy and then sell it them. Not sure why a company would want to do that.
      Mar 24
    • Uber Pronto
      OP
      Usually growth startups want to purchase back the shares for 2 reason
      1. They can buy back shares before raising the next round so buy cheap sell it to investors at a higher valuation
      2. More equity for the founders and company

      But the problem becomes of they are not growth and you get stuck with it. This is why RSU is generally a safer bet but options could also be valuable in very rare cases.
      Mar 26
  • Cadence / Product HCBabeL6
    What is the question? You need to provide current valuation and current outstanding shares.
    Do you know how much are they rising for Series C, it will dilute your 0.5% holdings
    Mar 21 2
    • Uber Pronto
      OP
      I don’t know how much they plan to raise for Series C. Current valuation was on the low 100M because the founders wanted to keep the valuation low for a potential exit sooner than later

      Question is trying to evaluate the startup comp being fair from other folks who jumped from FANG++ to a mature startup
      Mar 21
    • Cadence / Product HCBabeL6
      Every year you are losing 500k in TC from your current cash flow.
      So 0.5% of 100M valuation is pretty low... if they raise 50M round money it will dilute you much if the valuation doesn't fly 10x, i think one of the valid questions is when was the last valuation made and what were the assumptions if its a recent valuation then this is a very risky move as the next round will dilute you significantly...
      If you can negotiate it up to 1.5%+ (seems too high from the starting point) it will give you a lot of backup and dilution recovery for at least 3 years assuming they don't screw up

      The question is fair.. the main problem is that your starting point is so high.. so anything except a unicorn will seem like a lose situation
      Mar 21
  • Cisco abbaba
    If they raise series C, your 0.5% will be diluted. By how much depends on the terms of Series C. Let's say it gets diluted to 0.4%. Then do your calculations on various exit scenarios and see what range of upside are possible and compare that with Uber or other offers. At 12 directs, you are a good Sr engineering manager. Startup titles mean little so unless you expect to stay and see the company through exit, the title change won't matter much. End of day it's about where you want to grow, and what you want to do next, not always about TC.
    Mar 21 1
    • Uber Pronto
      OP
      Completely agree with this sentiment. You don’t join a startup for TC but for the mission. Im just trying to evaluate if the options should be valued close to $0 or $100k or $XXX year. It will be a huge comp cut regardless but want to assure it’s a fair option equity.
      Mar 21
  • Uber iScp63
    100M seems like low valuation for the size of the team. What’s your current role?
    Mar 21 1
    • Uber Pronto
      OP
      Senior Manager. They just closed Series B within the last 6 month. Expecting Series C in the next 12 month
      Mar 21
  • Uber ldkd
    I'm in same boat. Want fresh air but Uber IPO making other offers seem small n risky
    Mar 21 0

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