I am currently a Director with TC 520 and received an offer from a Series B startup valued $400 mm post money in Jun 2021
I have curent offer from Series B firm
300 cash
50 annual bonus
They low balled on equity 175k for 4 years which is almost 0.045%.
have competing offer from Amazon just under 500k but move to Seattle. I am also in advanced talk with a couple of startups in Seattle and Europe. One of the VP roles has me reporting to ex Lyft VP with a larger scope and team (7 person going to 14 next year)
All roles are VP Product in supply chain and logistics firms . I will not accept this offer for sure but I have 3 questions
1) I value equity at (last funding FMV in June 2021 - strike price ) * no of shares. Is that fair?
2) what is fair equity for VP product at series B which grew valuation by 3.5x in last 3 years?
3) Finally, is such low balling fair game in industry or should I just skip negotiations as it is either bad faith or huge expectation gap on part of leadership and wait for other offers?
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comments
They will be hiring VP Engineering too and we both will report to CTO. The company has been operation led rather than product led. I think they are just lowballing.
I am turned off by that as it means they view hiring as transactional. Would they want me to be motivated to grow the business or rather think how I got tricked and how can I get out? Very short term thinking IMHO.
Is your title going to be VP? I didn’t realize Series B companies give that sort of titles for PMs even if they held that in big companies… if it is just PM perhaps you will get more equity as you expand your role into director or VP.
you can’t “value” the equity. you can only compare to a median offer.
for VP eng this is a disgusting low offer. for logistics I don’t know. I know logistics is critical function but don’t know how rarified the labor market is.
this particular company valuation is low. they are not on the fast track. it is great for 5+ years ago valuation but these days hot companies are 1bn by series B. the 3.5 growth is good tho.
offers really go by valuation not series. we use series as a proxy for median comparison. if you want to use valuation for comparison you need to subscribe to a salary service which is stupid expensive so only available to VCs and their portfolio companies, not to individuals. the information assymetry sucks. at VP level you might be able to get the comp data from the company tho.
3. if this is a low ball offer just pass. again for logistics position i don’t know
Would you counter or just pass? I asked if 50k per year or for 4 years.
Can you elaborate on 1.25% with single trigger? Is it 1.25% of 400MM firm valuation and single trigger will be in case of acquisition?
This was good info. You have no idea, how much I appreciate this!
That said, the cash salary for a start up is pretty high. The question is how much do you value equity over base?
series b means that they have already validated the market: so anyone joining after that should earn equity over time using tenure and not on their initial grant.
not to take anything away from what you bring in: i feel like you’re undervaluing what they have already built and expecting a lot more equity..