Hedging my offer
I got an offer at a small 100 person start up in sf. TC is 150k + stock options. Thing is, I just started interviewing for a subsidiary of google and they can take up to a month. Definitely more excited about the google opportunity but have no idea if I will get an offer. 1. What are some questions I can ask to get a better understanding of the value of the options from the startup? I will ask for strike price but will the company give me info on the valuation? Should I ask for total number of shares outstanding? 2. Should I just take the offer and continue interviewing for google? In the event I get an offer, how will it look to leave the start up after a month? 3. Should I just turn down the offer from the start up and put my eggs in Google? Between 2 and 3, seems like 2 makes the most sense but I don’t know what impression that will leave on the start up if I do go. How would you navigate leaving the company after a month?
Without relevant information about how the offer from the start up compare with your current TC, it is difficult to help. Let's assume the offer from startup is higher and it seems you are inclined to accept. In that case, accept it. It can take 2-3 months before you get an offer from Google and even after that you can ask to join after a couple of months. By then, you would have spent 4 months at a startup and then can consider resigning.
Ask what the companies funding rounds look like. You’ll want to know the valuation, shares outstanding, shares issuable (they can be authorized to issue x million shares but maybe only have issued y million, for example). You want to ask what percentage your grant would be... and then also do the math yourself. Grant / authorized = %. If you are being given 1/8th of 1 %... and the company is worth $100M ... you are looking at a fat $125,000 exit, when divided over 4 years vesting is $31,000/yr for your retirement fund. Also ask about how they will combat dilution. Will they offer refresher grants, or will they do stock buy backs... what’s the exit plan? Don’t hesitate to ask for more stock. I’ve gotten my startup equity doubled or tripled more than once, just asking. If they have had a recent 409a valuation, ask if you can see it. Also ask what % the founders have, and if they have liquidation preference. I’ve seen my founder walk with millions and tens of people laid off with $0 because the founder sold the company. As for the startup, or google... I’m sure either would wait a month while you figured it out. Ask what the hiring plan is for the startup. Is it “one more head for the next 6 months, so you should sign now”.... red flag... no growth...
This helps a lot. Will definitely ask these questions. What does getting information on shares issuable tell you? Does that just give you an idea of how many total shares there will be? How likely will they tell me their valuation? From my experience, companies usually keep # of outstanding shares or valuation under wraps.
+1 Very well stated and laid out for one who may be new to startup companies and shared equity. Thanks!
If you talk to your google recruiter they tend to be pretty good about expediting the process. Especially if you mention other offers
Appreciate the feedback. The recruiter will try and get more info by the end of the week wrt timing of it all. I don’t think they can speed it up to something within the next two weeks though