A startup in the fintech industry offered me an opportunity to join as a part-time PM. The terms they've proposed are: - A part-time commitment of 20 hrs/week - A cash compensation of ~$50/hr - An equity grant of 0.25%, with vesting starting after a one-month trial period and the possibility of increased equity as my responsibilities grow The company is currently pre-seed, with a prototype developed. They're on the verge of raising seed funding and already have customers in the pipeline, backed by LOIs. My role would primarily involve leading their product development and helping them scale. This is my first venture into such an opportunity. Is the offer reasonable, specially the equity component? If not, what critical questions should I be posing to them?
I would personally pretend the equity doesn’t exist and base your decision on the cash comp. There’s about a 1000 to 1 chance this equity is ever worth any money and .25% of a pre-seed company is literally worth about $25. An Angel looks to 100x their best Angel investments so in the 10000 to 1 chance it gets 100x’ed you’d be looking at about $2,500.
I get that, but my main concern is whether 0.25% equity is a fair offer. Should I push for more, especially considering the potential best-case outcomes?
Eh, I think it’s unlikely you’re going to get much more TBH. Whether it’s fair or not is totally subjective.
It’s surprising they’re offering equity at all for what amounts to hired guns. If the hourly is fair to you, go for it. 0.25% is low for pre-seed, but generous for anybody that’s not FTE (it’s at the level of an advisor). Realistically, your value at part time is limited and likely to never vest. If I were them, I’d work behind the scenes to hire a full time PM before you fully vest. So you should only value the equity if you intend to convert. You should therefor negotiate accordingly. I’d ask for 2x 4x that for an FTE conversion with some reasonable cutoff to claim the conversion offer such as 1 year.
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The key question is: whose idea is the part time role? Usually, startups need to have everyone go 100% all the time. If they’re offering you reduced scope, then you’re a stop gap. If they’re offering you this because that’s all you’re willing to take on, that’s fine.
It's the latter. I'm not interested in a FT position at the moment, but I might reconsider after they've successfully raised seed funding.