Startup Compensation help
Currently work at a FANG and am exploring an opportunity with later stage start up with 4 hundred or so employees. Company is generating positive editda and well funded. I am sure that the hiring manager or hr is going to bring up expected comp in next convo before we get too far along and I have no idea what to say. I get that the upside could be big if it works depending on equity offered but that is Monopoly money and it is a start up and so it’s statistically more likely to be worth $0. Looking for any advice on how to handle the comp question with start ups and how to evaluate TC that is liquid to TC that is not liquid. Role is for “VP” of a business unit. My current TC is $360k. Non tech role.
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For a VP you could go for a $250k base and then heavy up on equity. Since it is a big startup, assuming $500M valuation, if you get 0.50% that would be $2.50M with probably 4-6x upside. Of course the downside risk is greater and if you are less confident then you could do a $300k and 0.30% etc. pick what you want, more equity or more cash.
Thank you!
While the general advice is to consider startup equity as worth ~0, this is not great advice for later-stage startups with strong foundations and high growth velocities. Your relevant considerations are: What are the terms of the equity you are being offered? (RSUs? Options? If options, strike price and exercise window if you leave before a liquidity event? 90 days is standard and bad, try to negotiate for 7 years; there are a few larger companies that do this that you can use as an example) What were the terms of their previous fundraising? Your equity is more or less guaranteed to be less valuable than that of the equity held by the VCs, but things like the liquidation preferences held by the VCs at various rounds can make a huge difference in how much you get from an exit event, if anything. Your personal time-horizon/risk tolerance? Joining a large, still growing startup as VP is one of the few "reliable" ways to climb the corporate ladder more quickly, which may be worth a temporary sacrifice in earning potential. It's not by any means guaranteed to work out, but it's one of the only ways to get to the top of the executive hierarchy without starting your own company (riskier) or dedicating your life to one company (still risky, and you only get one shot).
Thank you for the thoughtful reply!
u mind sharing what non-tech role ur are?