I'm in a process of deciding if I have to accept an offer from an series A startup. The market they are in is niche but very good potential to be acquired. I'm thinking about the connections and exposure I would get working there and how it could help me long term. Offer - 195K, 10%, .3 Current TC - 450k Location - Bay area H1b and GC will be taken care. Total 14 years (10 various + 4 product) I would like to hear your thoughts on folks working in startups or people who this know this area. Appreciate the feedback 🙏 #startup #equity #tech
strong offer
Equity could be higher (.35-.4). Salary could be higher if they raised a big A round. Don’t forget to early exercise.
Ignorant here: may I ask what early exercise mean?
VP should get 1%
Can you explain what you offer mean (195k,10%,.3)
This would be... Base: 195k Bonus: 10% base yearly (19.5k) Options: 0.3% of all shares available currently** With each raise they create new shares so your % ownership will keep stopping 10-25% a round usually.
Thanks for sharing this I was also confused
Remember just one thing, not every startup is a place to learn . I have worked for one which had worst culture ever. They would suck the blood out of you and it was filled with incompetent and groupie kind of people. The only point was the CEOs dad was a big gun and he could somehow find big clients. It was a hellhole totally. So talk to people who are working there for more than 6 months and then decide it.
How can he reach them. Linkden?
This. Ask to talk to folks, and backdoor through connections if you can. Even a good startup will be rough in the early years.
Don't do h1b GC with startup.
Can you please explain why?
Usually they do shady things with employment that fuck up your GC or hire shitty lawyers that screw up your process.
I don’t understand your current offer vs current TC. Can you kindly break it down by base, bonus, sign on and RSU please
195k with 10% is 214.5k. Difference in comp is 235.5k per year, which is 942k over 4 yrs. So 942k / 0.003 = $314 million. So you’d need to get an exit for at least $314 million to break even with your current TC. Then there’s all the opportunity cost of refreshers, promotion, etc. Plus the fact that investors hold preferred shares and get to cash out their investment first usually and then the rest gets divided up, plus the shares will be diluted in future rounds.
Am I the only one is lost at $314m ? $314m to break even for $942k, What does that calculation even mean?
You are not mate
If you want to make money on startups have a normal job and angel invest as your only high risk investment, until you can angel invest without a day job. Then consider starting or joining once you know how they work. Compensation on startups is tricky and usually everyone is getting nothing out of it. If you like the work and want to learn something new then join. Startups will usually let you work on cool shit or get into management even if you don't know what you are talking about because the risk is already so high.
How do you angel invest? Are there sites that let you do it?
Not that I know of. You just find people trying to do startups and give them money. You need to be good at having a network of people that are entrepreneurial. If there's a website it's probably shit and full of scams.
Don’t join a startup unless you are a founder or can’t find a job
This applies if TC is your main goal in life.
Not TC, but wealth creation, and if this isn't your main goal post your initial years in industry, you might want to think again
Don’t do an early stage startup for the money. There are countless ways that your equity goes to zero. Once you join, you are handcuffed due to AMT and exercise window. Even if they give you an insane amount of equity, it’s still not worth it. Startups are fun, if you’re into trying to create something from nothing and living day by day. Just don’t do it for the money even if all the cards are stacked in your favor. Having an early exercise at low strike, multi year exercise window, or NSU(founder shares) are the only conditions I would take during series A and it’s still dicey. Anything else is pure exploitation since you don’t know how this works.
I was told it is a 4 years vesting. With an initial cliff that is one year and then every quarter. Opportunity for the options to grow as I grow in the role.
That’s a standard vesting schedule and literally 10% of the info you need to make this decision.