What to negotiate for when working in a start up?
Feb 4
10 Comments
As far as perks go, would you want stock? Any perks? New to this, any insight is appreciated
As far as perks go, would you want stock? Any perks? New to this, any insight is appreciated
comments
If youre experienced theres no reason to work at a start up without Equity or a solid title. But i wouldn’t expect large pay comp. Usually startups have lots of Equity to give out but less Base pay.
If youre entry level, the goal should be to acquire skills and experience. If you can pick up some equity even better but start ups are the best ways to kick off a career.
If youre mid level, i would ask for reasonable pay and more equity and better title.
So if you want to be a millionaire after IPO you need to get $1,000,000/$20=50,000. 50,000 of shares. But you have to buy them. So this is a second number to consider: current share price. If its $1, you’ll have to pay $50,000 + taxes and maybe they’ll IPO, so you can get profit, if no IPO, you basically lost this money.
I’ve been in 2 startups, first offered 15,000 shares for $5 each, but has never IPOed, another offered 2500 for $0.90-$2, after IPO price was around $10. So the profit after IPO just $25,000 minus what I’ve paid for them.
Really low, if you get a side gig for example making websites or find a part-time job, you can get more without all the hassle of investing cash into private company stock, IPOing, selling it and taxes.
My point is you can make profit of the IPO only when you get a shitton of stock (50,000) for less than a dollar each, otherwise you’ll not get anything.
If they don’t offer good stock plan, try to negotiate length of PTO, reimbursement for courses/conferences, etc. So you can improve yourself and switch to another company.
And here comes the basic truth, if join FAANG you increase your chances to get a million/buy a house.
No stock plan at the startup can beat the FAANG RSUs even with a 1 year cliff. Also ESPP will give you some gains at public companies.
So, negotiate the stock, if they give you a lot, that’s cool, if not try to find other benefits which works for you