Hey folks, I need some advice on how to evaluate a startup offer. I’m a seasoned E6 TLM at Meta. Comp is down due to stock drop (450k now, but 650k at last year’s stock price). I’m a TLM for a team of 7, hopefully will be 10 next year but not sure. The startup was founded in Aug 2021, went through seed round and just completed preferred series A. 2022 will be end of year 1. Their stock price has tripled so far ($10 to $33 during preferred series A). They say the ‘true valuation’ now is around $90 per share given the product progression and MVP growth (can’t share details.) I’m sold on the startup in terms of their product, exciting work etc. The only concern is that of career progression and work trajectory. They don’t have any titles so I’ll be one of their “Senior Engineers”, there are only 80 eng+PM so far but growing rapidly. The people are very high caliber which is why I’m even considering the offer in the first place. Their offer is Base 260k Bonus 50k No sign on ISO (stock options) worth 600k vesting over 4 yrs with 1 year cliff. Strike price is around $10. No AMT to be paid when exercising ISO because it’s at par value. They say the growth of 3x - 3x - 2x 2x over first 4 years is pretty normal for Sequia backed companies and based on that, the TC after 3 years is lucrative even after assuming no refreshers. They have some big names (VPs, SVPs from FANG) on the engineering team, so I’m not worried about startup going bust at all. Just that they might not 40x either. If they 10x after 4 years, the offer isn’t lucrative compared to my current TC progression at Meta (remember they already 3x’d so far). The question is just around is the offer good? It’s paper value for 4-5 years at least, so shouldn’t I be asking more because of this? They seem to be very protective of their stock, and want to kee most of it for future ESOPs to avoid dilution.. Thanks folks.
Join for network and connections. Minor TC optimizations will not help you in the long way. I think I know what startup you are talking about. It’s always risky but there are smarter folks around to get to know and learn from. Does the name start with N?
Startups are about the risk/reward on the ISO lottery ticket. You don't move to a cash-flow limited company and expect more than an established company. If you want to take the risk you make sure the base salary is enough to live on, and then do your best to make sure you hit the jackpot. If there's already 80 people in the door, then they likely have established option packages per band/role which is based on reserving enough for another funding round, if needed. I would just make sure the 600k is 60k shares at the real $10 strike price and not 6700 shares at the unrealistic ego-inflating $90 value. If they succeed and go public you'll then get refreshers and RSU's to boost TC on top of holding options to cash in on.
unknowable with info given. need to know percentage. read holloway guide. as to the ‘true valuation’: LOLOL series A companies 1 year old do not have 80 people. more like 20. those are some low quality people i guarantee the base and bonus are good, very top of market they are projecting and selling you on a growth story that didn’t happen yet. this is extremely used car sales and you are falling for it. don’t. based on this shady practice i hold them in low regard already in cash terms you are taking a 200k pay cut
Thank you. The only intangible thing going for them is that I’d be reporting to 2 people one of whom is an ex-director of FANG and the other is ex-VP of another big tech (non FANG). How would you value that learning?
zero
Lol, whole point of joining a startup is to get a chance at that big lottery ticket. They're giving you jack shit in paper money, where they should be giving 2-3m "worth" of stocks instead. Stay away and just go to another FAANG to get 700k+
Yes, this is what I’m leaning towards too. Thanks
LOL, @Amazon never had a startup offer. A great Series A valuation is 100M, as per @Amazon, they should be giving you 2-3% of the company, when they already have 80+ eng and PM employees. I am wondering what their cap table looks like. Blind is a place for people with no experience to give "big advise".
i want to reemohasize that whether this offer is good is unknowable without percentage
I used to work in a startup for one year. Learning is amazing, senior managers (if previous VPs) very interesting to work with. But after employee number 10 to 20 there is not practically anything for you to call it a big money. I remember everyone was planning to join big enterprises to increase the income. Startups are good to join in earlier days which also has higher risk-reward. For this, you should know the founders like close friends and join them early. Otherwise, keep your job especially if you have family and kids to support. One question, what is the startup about?
It’s in FinTech but core work is ML based automation.
If you have a graduate degree and potentially more than 7 years and below 15 years experience, you’ll be still safe if you take the job. More senior you get, less opportunity to get back to FAANG. Director positions are rare.
What’s their valuation? Remote? YOE?
Yes remote. 10 yoe for me.
You should ask for more equity
Like, double?
I thought paper money offers should be a lot more than public company offers. You can get a much higher offer than this at public companies today. So you have to be really sold on their growth to go with it. They will probably have a lot of dilution along the way too. Without knowing about the product or the team, the offer itself doesn’t seem very enticing.
I know! This is exactly what I’m thinking too. I was surprised they matched my base salary ask but aren’t budging on the ISO. Their counter to this argument is that you can get back to FANG next year so there’s no risk. Here you get to work daily with very accomplished people..
That sounds like BS! You’ll be risking the paper money going to zero, while in a FANG you’d be getting actual stocks at $600K+ at close to market bottom values that could be worth a lot more by next year! Also you work a lot more in a startup than in a FANG, and this would be for lower compensation for the pleasure of their company!