Advice negotiating offer at seed-level startup
TC: $325k, 15+ YoE in ENG+Product, most of that in management roles. Negotiating an offer to join a 6-person startup in SF with $2.25m in seed funding to-date (looking to raise a bigger round within 6mo). Great product, great team, etc. Offer: Role: 1st product guy + manage most of the company + 10 other things (marketing, help raise the round, recruiting, etc.), which is cool. Comp: ~$135k (everyone is making that much or less) + X% of equity Question 1: what’s a reasonable X? Question 2: how long until I should expect a real salary?
What’s ur current role at sap ?
i would reject anything less than 2%, but it doenst mean i would accept if i got 2.1%
Clarifications: * There isn’t an A round yet (current $ is notes), but expecting one in 6mo. * Yes, there are 2 cofounders. * I’d be the most senior/experienced person there, including the cofounders (which is part of why they want me). * I would be part technical, part not. * I’m assuming a 20% option pool, but don’t know that for sure. They know I would never come for 0.45%. And agreed that 8% is too much for them to give up, out of a 20% option pool. #r3A1li - Your 20% of the remainder formula seems like a reasonable rule of thumb, but surely they would flex those numbers up/down based on level / whether the personal is technical / etc? Other thoughts?
1. ~8% (could wiggle down a point or two but nothing less than that). 2. Some time between 4 years and never (acquisition or failure). Right now you need to bet more on equity than salary which will be hard to justify more of for awhile.
8% as employee no. 7 isn’t going to happen. Assume the option pool is generous at 20% of the company. Founders have 60%, Series A investors have 20%. A generous offer is 20% of the available option pool for the first handful of employees. Assume 2 generous founders, 4 employees. Here are the numbers: 1. 4% to first hire leaving 16% in the pool. 2. 3.2% to the second hire leaving 13.8% in the pool. 3. 2.76% to the third hire leaving 11.04% in the pool. 4. 2.208% to the fourth hire leaving 8.832% in the pool. 5. Hi Blind poster. This is you. 1.7664% equity to you, the fifth hire in the best and most generous case. Assume things are less generous. The pool is only 10 or 15%, and only 10 or 15% of the pool is given away. Assume worse if your role isn’t technical and the job is to do whatever the founders don’t want to do. The other poster who said .45% wasn’t far off base.
1%-2%. First ten employees gets ten percent in total.