Should I join a post Series B startup

New nBno00
Mar 3 20 Comments

I have three offers

Dropbox, SF - TC ~450K as an EM
AutoDesk, SF - TC ~230K as an EM
Startup, LA - TC ~180K (plus 100K equity/year) as a Dir of Eng.

Now I am mostly lingering between Dropbox or the start up. Even though the start up is paying less cash their equity is pretty decent with a good upside if they have a good exit. Now this is where I am a new bee in terms of start up maturity levels. So I did some research and below is what I know about this start up and I need some guidance from people who are working with start ups. For extreme anonymity reasons (a bit ironic though) I'm not naming the startup.

About the start up
They are an E-Commerce company competing with Amazon, Walmart and Costco within a niche vertical.

Year 1 - Self funded and kicked off the company
Year 2 - Raised $7.5M in Series A with $50M in Sales.
Year 3 - Raised $120M Series B, with a valuation of $600M, sales at $100M
Year 4 - Sales around $150 to $200M
Year 5 - Sales at $200M
Year 6 is 2019

Burn rate is ~$20M/year.

When asked if when they are planning to raise a Series C they said that they are not looking to raise a new round at least for the next 2-3 years. Overall, as I am trying to dissect this it feels like a pretty matured growth company that could have a decent exit in the next 3 years. However they are not profitable and are planning to be profitable by 2020.

Worst case I will be left stranded with their equity which may not mean anything unless they have a good exit.

Their team on paper and track record looks solid and their offer matches with my current base.

What do you think? Any guidance or suggestion would be very helpful. Thanks in advance.

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TOP 20 Comments
  • dropbox. you'll be up $1M in TC after 4 years. do you think your startup equity will make up the difference?
    Mar 3 1
    • New nBno00
      OP
      Start-ups as you know are uncertain. But this one with their history in sales and a recent big acquisition of one of their prime competitor at ~$10B makes me wonder if I would regret not taking this path. Anyways thanks for sharing your thoughts.
      Mar 3
  • Facebook / Eng Pong Lenis
    Dropbox has a great name and great food. Unless this e-commerce startup’s vision speaks very near and dear to your heart, forget it.
    Mar 3 0
  • Intel ArminVanBu
    Let's say it takes ~3 years to IPO, if you're lucky. In that 3 years you'll have made likely $900,000 more at Dropbox ($270k higher pay x3 and round up with perf reviews). How strongly do you feel that startup equity will be worth more than a million bucks? At 200m in sales I gather they have several hundred employees, probably 500-700. So you're not a foundational hire. Your equity could devalue if they raise more capital. The title is nice tho. And LA is better than SF (to live, perhaps not career wise). Its a tough call. Hard to leave a 450k offer on the table today for the promise and hope of lottery tickets later. A bird in hand...
    Mar 3 2
    • New nBno00
      OP
      makes sense and thanks for sharing your thoughts.
      Mar 3
    • It’ll be more than $900k more at Dropbox. Our on target annual refresh grants are for 1/3 of what we’d make for an external new hire grant. So 3 years in you’d have received a lot more Dropbox stock along the way.
      Mar 4
  • How large can the startup be? Currently $600M valuation. Assuming it can go up to $3B? It’s 5X. Your $100K will become $500K w/o any dilution.

    So more likely you will see $400K. Far less than Dropbox TC.
    Mar 3 1
    • New nBno00
      OP
      Not sure but this is exactly how I am trying to process this. Thanks for sharing your thoughts.
      Mar 3
  • LeanTaaS ♥️ data
    What's the current valuation?

    How many stock's you are getting and at what price?

    You can get that $100k from series B company in Bay area any day.
    Mar 3 2
    • New nBno00
      OP
      30K common stock options at $2/each (strike price).
      Mar 3
    • LeanTaaS ♥️ data
      Trust me bro, Nothing special about this offer. You can get that kind of offer every day in Bay Area.

      Dropbox it should be...
      Mar 3
  • Square / Eng SQ
    Why the fuck wouldn't you do Dropbox LOL. It's an absolute no brainier. The startup's sales YoY is actually really bad.
    Mar 3 3
    • New nBno00
      OP
      ohk, would love to know why do you think so?
      Mar 3
    • Lyft RanJMac
      Little to no growth.
      Mar 3
    • Square / Eng SQ
      It went from 50M sales to 100M to ~150M to 200M. That's literally linear growth. As a series A-B you should be hitting 100% YoY. They're already failing that. The last year's sale growth was 33% YoY growth which is actually horrible. PayPal gets 27% YoY growth in the billions of revenue to put it in perspective.

      The company's sales it indicates it's going no where.

      Not to mention a Series B could take 5-7+ years to IPO, if ever. You're being underpaid 270k yearly that you could be investing better than the startup grows each year. Given techs recent rise, you're looking at 100% growth on your stocks between this 5-7 year.

      So you're going to take a million dollars (minimum, likely closer to 2 after 5-7 years) to the roulette table and betting it all on a number. Not even black/red/even/odds. Just all in on a number. And you're wondering if this is smart.
      Mar 4
  • Walmart.com QTFP86
    Do not join that start up, love your life and family. I REPEAT do NOT join, numbers are illusional...
    Mar 3 0
  • Unity bushes
    No brainer drop box
    Mar 4 0
  • Axon
    cwixjwicn

    Axon

    PRE
    Axon, Uber, Facebook
    cwixjwicnmore
    He probably just got out of a startup
    Mar 3 2
    • New nBno00
      OP
      ?
      Mar 3
    • Axon
      cwixjwicn

      Axon

      PRE
      Axon, Uber, Facebook
      cwixjwicnmore
      Oh. That should be a reply. Dude, join Dropbox
      Mar 3