Equity in a late stage startup

Samsung goonda
Apr 16 15 Comments

I am negotiating an offer for a role of Head of Partnerships for a late stage startup (last valuation of ~$5B). Its going to be a VP level role. What is the equity range that I should expect? Currently they have offered stock options worth $200k vesting over 4 years.

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TOP 15 Comments
  • Daimler
    noDoubt

    Daimler

    BIO
    It's not personal. It's just business and I am a businessman man.
    noDoubtmore
    Counter with 400K and see what they say. Also, understand that they can do 3/1 reverse stock split just before IPO like Redfin did.
    Apr 16 11
    • Daimler
      noDoubt

      Daimler

      BIO
      It's not personal. It's just business and I am a businessman man.
      noDoubtmore
      It means if you got 3000 shares you have 1000 shares after a 3/1 reverse stock split.
      Apr 16
    • But if you do the reverse split wouldn’t the share price triple by definition? You can’t manipulate a cap table like that.
      Apr 16
    • Daimler
      noDoubt

      Daimler

      BIO
      It's not personal. It's just business and I am a businessman man.
      noDoubtmore
      Not if you are trying to raise money from Wall Street and you find out you are worth $5 a share but want to be listed at $15 on opening bell. And then the stock tanks before you can sell because the real stock value is closer to $5 a share.
      Apr 16
    • Well sure, but that would happen anyway, in the sense that if the reverse split wasn’t made the stock would get listed at 5 (overpriced) and then drop as 1.5 as well, so in the end the drop in market cap should be the same. I don’t exactly see the correlation with the split event.
      Apr 16
    • Daimler
      noDoubt

      Daimler

      BIO
      It's not personal. It's just business and I am a businessman man.
      noDoubtmore
      The thinking is get as much stock as you can!
      Apr 16
    • GoodRx BobAxelrod
      A reverse split means youd have a third less shares at triple the value. It's a net neutral event. If you think you're getting jobbed then I have some land for you in Florida.
      Apr 16
    • It's just mental thing. Often startups would offer X number of options at a strike price of Y. The employee may think that the company will go public at $10-$20 range(like most startups), and expects he will be millionaire with worth between 10*X to 20*X. Just before the ipo the company does a reverse split of 1 to 10 ( to bring share price between 10 to 20), and the employee equity is now 1*X to 2*X.
      Happened to me at roku, 6 to 1 reverse split.
      Apr 16
    • Daimler
      noDoubt

      Daimler

      BIO
      It's not personal. It's just business and I am a businessman man.
      noDoubtmore
      There are people who take stock in lieu of competitive pay. I have seen this happen and all I am saying put as much upfront cash and stock in your pocket as possible.
      Apr 16
    • Samsung goonda
      OP
      But the reverse split should not affect the payout of anyone. As someone else posted above, it's just about optics
      Apr 16
    • Daimler
      noDoubt

      Daimler

      BIO
      It's not personal. It's just business and I am a businessman man.
      noDoubtmore
      As I said the more shares you get the better. Splitting 900 shares is a lot better than splitting 300.
      Apr 17
  • New NcEf26
    Mind if I ask the base?
    Apr 16 1
    • Samsung goonda
      OP
      The base is $270K
      Apr 16
  • Consider pre ipo options at zero, unless you have strong belief in the company. 5B valuation implies that stock is already diluted too much, they should either offer RSU or increase options
    Apr 16 0

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