Please help me evaluate startup offer

Intel BOhw04
May 4 12 Comments

I have the following offer from a Series B startup in the Deep Learning HW space:
Base: 175k
Equity: 25k shares worth $500k at current valuation (~$800M), strike price $5 maybe (not sure)
Management claims they're hot in this space and looking at 10x multiplier.

My current TC: slightly over 400k (300k base+bonus, 100k equity), plus extra ~$100 cash this year only from an earlier one-time grant.
14yoe

Most likely scenario is a startup exit between $3-$4B in 3-4yrs which makes my risk adjusted upside small. But I'm very conflicted because I believe the learning experience will be great.

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TOP 12 Comments
  • Airbnb YdSR51
    “Most likely scenario is a startup exit between $3-$4B in 3-4yrs “

    The recruiters must have brainwashed you. This is not the most likely scenario for any series b startup in 3-4 years
    May 47
    • Kaspersky Lab aye dais
      Why not? If they are growing fast, 3-4B valuation is not that high these days. Important questions are profitability, revenue and why they believe in 800M current valuation.
      May 4
    • Intel BOhw04
      OP
      I should have worded it differently: That $3-$4B exit is *my* expectation of their *best case* exit given the strength of their team and tech stack. Of course, they say that's a pessimistic number and quote a 10x multiplier or higher.
      Plus as the poster above said, $1B+ valuation startups seem to be a dime a dozen these days.
      May 4
    • Kaspersky Lab aye dais
      Intel, the question here is why this job attracts you. I’m sure you understand all risks and potential outcomes.
      May 4
    • Intel BOhw04
      OP
      True dat. The last time I worked for a similar startup, I grew tremendously as an engineer and person. And fortunately, there was a decent financial reward. But that was early in my career where the opportunity cost wasn't that much.
      Now that I'm older, I'm wondering if the cost/benefit ratio still makes sense. Maybe no one can advise me on that and I'm wasting everyone's time :)
      May 4
    • Kaspersky Lab aye dais
      It’s not only about cost/benefit, I think, it’s also about feeling happy and fulfilled using your talent and intelligence to solve problems that challenge you.
      Can you take 2 weeks vacation in Intel and work for this startup for 2 weeks to see if a satisfaction you may feel makes it for lost stability and lost cash?
      May 4
    • Intel BOhw04
      OP
      Thanks for the advice. Unfortunately the "try it out" scenario isn't possible. Plus I'm pretty sure that's a quick way to get fired from my current role.
      May 4
    • Kaspersky Lab aye dais
      Sorry about that. Then collect as much info as possible and meet as much people from that startup as possible.
      Another question is whether you’re really done with Intel and ready to move on.
      May 4
  • New fFVE56
    For most startups. Base == package
    May 40
  • Uber / Engfudhbe47
    More interested with your current TC. $300k cash as base salary and cash bonus? That’s really good!
    May 41
    • Cadence / Product
      luna.

      CadenceProduct

      BIO
      .
      luna.more
      240k with 25% bonus here you go
      May 4
  • New / Eng
    errfileno

    NewEng

    PRE
    Microsoft
    BIO
    Senior Software Engineer. 15yoe. Seattle. ~$400k TC
    errfilenomore
    Equity: those numbers don't add up. Be wary. If the current valuation is really $500k, 25k shares by definition would have a strike price of $20. If they're telling you 25k shares at about $5/each, then the actual valuation is somewhere near $125k.

    ISOs and NSOs by definition have zero net value to you at the time of grant, and are only worth something if (a) the company valuation increases, (b) there is a liquidity event, and (c) you have the spare cash with which to exercise (or the company provides a cashless exercise program).
    May 40

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