Being offered 0.1% equity options, not RSU with 1-yr cliff and 4-yr vesting. Post-money valued at $100M with $20M series A funding. Assuming they become a $1B company in 4 years, and it takes Series B and C to reach there, what could my options be worth after 4 years?
0.1% x $1B = $1M Assuming Series B C will dilute further by factor of 4 So it's $250K in 4 years
^ Not to mention it's not guaranteed they'll get 1B valuation with just series C. And it could take years to get that valuation.
Series A to unicorn IPO in 4 years is extremely unlikely. I’d discount the paper value even further to account for lack of liquidity and the far more likely outcome that your stock never becomes liquid or that it won’t until 5-10 years later. Plus you’re going to get screwed by liquidation preferences. Also don’t forget time value of money. The 100k your stock is worth in 6 years is worth a hell of a lot less than 100k today or spread out over the next few years. Basically the first guy nailed it. Unless you’re reporting to the CEO it’s best to consider your equity a lottery ticket and focus on cash comp.
What's your Total Years of Experience? What role are you going to play at the company? Do you have domain experience relevant to the start-up?
4 YoE. Role is senior software engineer. No domain experience. Cash is 190k
You shouldn't assume any upside to the equity value because you'll be disappointed when things don't work out. Join series A startups if you're passionate about the work/product. In case you were wondering, 0.1% of $1B is $1M.
Shares get diluted each round that gets raised because you have to give out more shares to new investors. Your .1% will become smaller and smaller during each round and likely will look like .06% or .07% after two rounds.
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Don’t count unicorn dust. What’s the salary?
Cash 190k