I’m in the position of being a very early SWE at a startup (employee #3, startup is now 270 people) that might have a successful exit in a couple years, and I’ve been advised from various people (outside the company) that I should stay until the end because there will likely be an additional pot of gold to be split among key people like me, regardless of the final valuation. I have a very good relationship with CEO, CTO and several VPs and they highly value my work, but I’d also like to have an experience at FAANG (I have standard offers at FB E5 and Netflix). Have you ever had this experience? Would I really leave a bunch of money on the table if I left before the exit? Consider I already have a bunch of equity under the form of vested and exercised options because I’ve already been here a few years. My equity on paper is worth about 4M and I would bring that with me if I were to leave (startup valuation is 500M at the last round, I originally had 2% that went down to slightly less than 1% due to dilutions). A few friends experienced with startups told me it’s not uncommon to see amounts of 1-5M being thrown at key employees on top of the equity cashout, as a retention package to have them stay a couple years after the acquisition. If it wasn’t for the money, I would be 100% out of here, since my growth is stagnating, and I’m feeling the opportunity cost of waiting for the carrot stick. Thanks
Are you sure there are no more opportunities left where you are? A company looking to IPO in a couple of years surely would have interesting opportunities it's still going after as it works towards an iPo. Being #3, you are in the best place to grab those. You won't get such opportunities at FB or Netflix
Yeah. We’re not a sexy unicorn, to put it bluntly we are a boring b2b enterprise startup which is mostly dominated by sales people these days, the tech is pretty much done and we are in super conservative mode when it comes to innovation. Sales is where the action is at these days.
Don't leave yet. Facebook, Google and Netflix will be around forever. This sounds like a once in a lifetime opportunity.
Once in a lifetime opportunity that has already lasted 4.5 years..... I’m so bored!
Realize that average exit time is typically 7-10 years, so you are possibly only half way. If thjs is about money why not talk with founders/ceo frankly about this? If you are critical I would think they would make this right or want to work to get you the exp you are after. You are in a way better spot at this startup then being 1 out if 1000 hire at FANG
There is no question that if you are acquired and seen as ‘critical’ staff you can get a big payday on top of the exitable event. I have seen this as 0, $250k, up to millions so it is a wildcard. The real question is would the CEO/founders drop your name and fight for you in negotiations to be sold? The reality is if you try and leave and they dont make a big fuss, they wouldnt look out for you in form of acquisition retention outside of whatever standard deal they put in place. Make sure you have read your ISO stock agreement if you decide to leave. Whole lot can change once you leave even if you are vested. It can be common to have a timeline in which you would need to execute options or forfeit them which can be shitty if the company isnt exiting...
I believe they would, though that’s clearly just my opinion. When I tried to leave a couple years ago they made a big fuss about it and basically convinced me to stay with good incentives. I don’t have ISO anymore, I exercised as they vested and have common stocks now. Contract should be clean, no clawback clauses or other shady stuff, I read it entirely several times over the years.
That is great, but I would get a lawyer if you leave and be sure. When companies get acquired or go public you can get fucked hard. Dilution is real easy if they introduce new share classes and nobody is looking out for you. If you are critical and the team is supporting you, I would stay....You are doing grass is greener type shit...
Why don’t you try to get an offer outside, do the math, and if you have good relationship, share this with your founders? I think you can make them part of your decision making and raise your concerns about wanting liquidity. Tell them you need to buy a house, provide for family, etc etc. Also, you probably already got bulk of the benefit and the retention may not be as high as you think. Question: is 2% seed stage equity?
Thanks for your comments. Yes, 2% was when I joined, right after the founder secured the seed stage. I should have asked for more but I just had 3yoe at that time.
If you end up leaving, make sure you hire a lawyer to review your docs and have everything in writing. Costs around 200-300/hour and will give you some sense of security. What do you think did the YOE 10 at Seed stage or Series A got? I’m in that current situation, thanks again!
If you get acquired by a shit company, they can actually unvest your vested shares and make you stay to re-vest. Seen it happen, not sure how it was legal. Definitely YMMV. Also additional pot of gold can be tied to aggressive revenue targets. Depends on how your founders negotiate.
I’m really curious how the re-vest part can be legal: and what happened to the employees who left and brought equity with them? They sure cannot make them revest, so did they just find a way to cancel their equity?
Seen it happen too. Truth is they can put whatever they want on a piece of paper for you to sign and if you sign it then you’re bound to it. The only way you’d be able to push back is if you had some serious leverage like you’re named a key person for the deal to go through.
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Stay if you still enjoy being at the startup. You’ll likely miss the autonomy and pace you now enjoy after moving to a much larger company.
That’s a good point, though I’m really looking forward to new challenges, and I sort of peaked at my company, I basically spend all my time training and mentoring others, which is not as rewarding as tackling new problems.