Evaluating offer that is a promo but low-ball stock

Uber szIh40
Oct 28 25 Comments

Currently a 5a at Uber, got a staff engineer offer at a fast-growing startup called Sonder (staff for them being like Uber's L5b or high L5/low L6 in general) in the bay area that recently became a unicorn. They claim to be a rocketship, constantly compare themselves to Uber, Airbnb, etc.

Salary: 205k
Bonus: none
Stock Options: $220k worth (at preferred price) over 4 years.

I feel like this is crazy lowball stock options, but they insist it's a great offer because it'll come out to market rate when they 5x in valuation in the next 2 years. They have been growing rapidly and just raised a series at a 1B+ valuation, and I can see them potentially growing 5-15x in the next 5 years as they think they will, but this seems optimistic. They'll need to continue beating out other well funded competitors in the hospitality space (essentially leasing buildings as hotels). That all said, it just seems crazy to me to expect 5x growth just to get to market rate comp. Data on stock options offers are pretty limited on Blind, so looking for advice and perspective.

Expected 2020 Uber TC: 315k (salary 175k)
YoE: 4 + PhD
Location: SF

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TOP 25 Comments
  • Uber ajQi76
    Remember our recruiters promising the same thing? Don't count on 5x growth.
    Oct 28 1
    • Uber szIh40
      OP
      *sigh* I do remember...
      Oct 28
  • Uber
    TC || πŸ‘‰

    Uber

    PRE
    Google
    TC || πŸ‘‰more
    Sounds like a scam. All the responsibility and half the pay. I think they believe you were laid off. They are trying to benefit from that possibility.
    Oct 28 0
  • Google foony
    Did you not hear the recruiter? That 220k is gonna be worth 220M next year when they IPO. What are you waiting for?!
    Oct 28 0
  • Cruise Automation gasp
    If you name the company, people may have real world insight that can help you see past the marketing fluff.
    Oct 28 4
    • Uber szIh40
      OP
      Updated. Was worried about identifying info...
      Oct 28
    • Cruise Automation gasp
      Eh. Maybe a valid concern but not really an issue.

      Looking at their crunchbase profile, it doesn't look like they've got any particularly interesting investors. Looks like they've already done a Series D. Depending on the IPO plan you may or may not actually see $220k from stock.

      Market viability is questionable, just like it is with WeWork, just like it is with Airbnb. Their product (tailored Airbnbs) means they'll have slower growth, and I'd honestly question the go-to-market strategy -- I haven't previously heard of them, which is surprising given their claim to be so star spangled awesome.
      Oct 28
    • Uber szIh40
      OP
      Thank you, this is great feedback
      Oct 28
    • Sonder 3xyz789
      See my other post re: investors: maybe not your typical Silicon Valley brand names but strategic and people who would expect to understand the space.

      As far as comparisons to WeWork, understandable why outsiders may draw a general connection but our unit economics are much stronger. And we don’t have serious issues with corporate governance or financial discipline.
      Nov 13
  • Twitch yikesman
    After weak tech IPOs and a bursting VC bubble, I'd value options at 20% of what they're saying.

    Startups compensate YOU for risk with a higher potential reward. This is the opposite.

    If you're ok with the base and the opportunity, take it. But don't fool yourself about equity. And keep in mind they'll struggle to hire a team around you if they're lowballing.
    Oct 28 2
    • Uber szIh40
      OP
      I'm ok with the base and opportunity, but I'm not willing to sacrifice this much on equity earning potential. I actually like my current position at Uber, so it's not a matter of leaving for whatever I can get. I can also just keep interviewing...
      Oct 28
    • Twitch yikesman
      I think that's wise. You can express that when you decline. They may up their offer.
      Oct 28
  • Airbnb dlo
    Sonder’s business model is more similar to WeWork than Airbnb, a tough sell when the recession hits.
    Oct 28 1
    • Uber szIh40
      OP
      Agree completely.
      Oct 28
  • Sonder 3xyz789
    No interesting investors? Try Bezos Expeditions, Laurence Tosi (former CFO of AirBnB), the former CEO of the Hyatt Development Corp, Greylock, etc.

    Some resources below β€” best of luck:

    https://www.msn.com/en-us/news/video/find-out-why-jeff-bezos-a-rod-are-investing-in-this-modern-hotel-company/vp-BBWuhtl

    https://www.forbes.com/sites/bizcarson/2019/07/11/sonder-apartment-airbnb-hotel-business-billion-valuation/#3e44ceff50f9
    Nov 13 0
  • Samsung / Eng a7bz59!
    I would be careful with their business model. For Airbnb the cost of acquiring new inventory is very less. Looks like sonder is high touch and lot more effort/$$ to get inventory out. So dig deeper into their hyper growth story and profitability. Also 300k today is better than 1M after 5 years
    Oct 28 0
  • New / Mktg
    SrZeroCool

    New Mktg

    PRE
    IBM
    SrZeroCoolmore
    In 4 years? Your options will probably time out or be diluted. That means bigger risk which means they need to pay more
    Oct 28 0
  • Apple aabbcc0081
    Name the start up
    Oct 28 1
    • Uber szIh40
      OP
      Eh, what the hell. Sonder, a hospitality startup.
      Oct 28
  • Salesforce PxpN70
    Is the role something good for you and your career?
    Oct 28 1
    • Uber szIh40
      OP
      Opportunity to be a tech lead and grow a team, which won't happen at Uber with the layoffs. However, technical learning/growth and problem space would still be much better at Uber.
      Oct 28
  • Broadcom Ltd. zaqwertfx
    did you take the offer?
    Nov 4 0
  • NVIDIA / R&D BubbleT
    You should be getting at least 400k over 4 years, quite a low ball.
    Oct 28 0
  • Flipkart / Eng
    kpuch

    Flipkart Eng

    BIO
    interested in distributed systems. looking for a mentor in this field. going to meetups regularly. have 2 years of full time exp in fk.
    kpuchmore
    Nah, don't do it
    Oct 28 0
  • Snapchat QaH7er3PxL
    Not sure how they claim equivalence to 5b. Comp? About 2-3x short. Other than that, no concerns.
    Oct 28 0

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