Cash vs equity TC

Uber jf583us
Apr 24, 2018 10 Comments

Which annual TC comp would you prefer in the bay area? Let’s say equity would be in a late stage private company that’s close to going public. Think Airbnb, Lyft, Uber, or docusign/Dropbox/Spotify a year or two ago.

Assume all else equal

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TOP 10 Comments
  • GE / Sales
    donkey1027

    GE Sales

    PRE
    Accenture, Schneider Electric, Startup Shell
    donkey1027more
    This is a flawed poll because illiquid assets create a premium. The payments should be the same. Should be 250 cash, 275 some equity, 325 a lot of equity. That’s more realistic. And I’d still take the cash at my stage in life
    Apr 24, 2018 3
    • Uber jf583us
      OP
      I’m assuming these are offers and making it easy. Obviously there are hundreds of variables and equity value depends on when you joined, if and when the IPO happens, vesting, etc.
      Apr 24, 2018
    • GE / Sales
      donkey1027

      GE Sales

      PRE
      Accenture, Schneider Electric, Startup Shell
      donkey1027more
      Notes but keeping them equal makes it a ridiculously easy choice. If i get no uplift for the downside risk of equity why would I even entertain it?
      Apr 25, 2018
    • Uber jf583us
      OP
      I’d ask people to assume it was a Lyft, Uber, Airbnb like company 1-2 yrs away from IPO. So it’s up to the voter in this poll to value the upside risk of the $100k in equity, if any
      Apr 25, 2018
  • VMware yootube
    Flawed poll. Where's my option to take 250k equity?
    Apr 24, 2018 2
    • Samsung LVRr10
      If you want 250k in equity, I’ve got an idea for you. I promise the equity will be worth 10 times by the time you completely vest. 🤣
      Apr 24, 2018
    • VMware yootube
      Scratch that, where's my option to take 100k in equity?
      Apr 24, 2018
  • Facebook sizz1e
    "Assume all else equal." Makes no sense. There are too many variables.

    1. Equity is usually granted over time. Sign ons are all at once.
    2. Equity is only taxed when you sell it. Are we assuming long term capital gains then?
    3. Do you actually believe in the company?
    Apr 24, 2018 1
    • Uber jf583us
      OP
      It’s per year so assume equity is vested within that year. Agree though, too many variables this I tried to make it easy
      Apr 24, 2018
  • Microsoft / Eng Koukin
    Cash is king
    Apr 24, 2018 0