Received an offer from a Series A startup in the Bay Area recently and I don't know how to evaluate my offer. For reference I am a new grad. Base: $125k Stock: 0.6% equity The startup has a valuation of $25M, not sure how meaningful this is. Assuming not really at all in terms of actual realized value. TC: 0 for now 😢
Ignoring TC, having worked at large companies and startups I personally think starting off your career at a startup is the best thing you can do. Be ruthless in learning new things and try various lines of work. About your TC- - 0.6% equity is really good for new grad. - what is the strike price of the option? If you haven’t asked, ask them. This is the price you pay per option to own them after you quit the company - Base: it’s a bit on lower side but manageable if you share an apartment and not aim for a baller of a life. Good luck
Go for it. I’m a new grad landed in Amazon and I’m regretting now. I’m not doing any meaningful work here. Who knows? Your startup could become as big as FAANG one day. Even though chances are really low, you can try.
Get to know your Strike price and outstanding shares (preferred and iso). Expect a 4x-15x dilution for next round (unless you are a company like Notion). Also know your cliff and hold to buy time, when and if you leave the company (read about Pinterest as to why). Also agree with 450k, aka 2x-4x base at current value
Please elaborate on the $450k
Just a trend companies have while giving out stock options for recent grad to mid role. Msft gives 1-1.5x base as stock, Google/Facebook gives out 2-3x base as stock. Assuming joining a startup is 50:50, 2x of the avg stock option which Tier 1/tier 2 gives out seems to be fair. Hence given base 125, I'd ask for stock between 125*3(375)-125*4(500) knowing the strike price.
OP was offered 125x1.2(150) less the strike cost
Nah .6%x25mil aka 150k - doesn't work that way ... There are preferred stock and then iso (or at least how I have simplified them) So I'd rather go for strike price and multiply that with actual # of iso offered, to at least know your worth at the time of joining
So you are saying OP’s strike x units should equal 350-500k?! That would be absurd
That would be over 2-3% ownership which startups at Series A do not regularly hand out to new grads
Normal for a startup. Low base for any real company. There’s a 1% chance that equity turns into USD, although it’s a pretty high amount. 0.25% is more common as employee 20-100, but whatever they’ll dilute you as much as legally possible at the next round (you’ll eventually own 0.01% or something but legally you’re entitled to at least $450k based on current post-money valuation if they’re not snakes with the paperwork.) It’ll also be shit work with a whole bunch of “don’t you want to work 60 hours a week because you believe in us?”. Good experience though. Take it and don’t be afraid to keep looking.
My favorite startup idiot founder quote: (in negotiations to sell my company to a bigger startup for $5m) “Is money really your only motivation? Don’t you strive for something more in life?” I about lost my shit. Made it very clear though, I love futurism and tech and let’s-make-it-all-better but for fuck sake where I’m from we start businesses to make money. You’ll learn a lot from these Stanford rich kids though. Just not in the ways you’d hope.
“Legally you’re entitled to $450k based on current post-money valuation” Uh what?