Startup UI/UX designer Offer evaluation
Location: Seattle Currently MSFT UX designer YoE: 2 Cash: 120 (I think that’s very reasonable) Equity: less than 0.1% (I’m employee 10) I’m underwhelmed by equity... should I be? Less than 0.1%. Of course founder/VPs tell me it’s 500M to many billions of dollars business. I wouldn’t be joining unless I thought they had a good chance of success. If it was a billion dollar business, my equity nets me less than 680k after tax, dilution and options cost. Not so impressive They explained that their model is to give grants each year, though likely less in size. My initial grant isn’t the only one they say. I’m not really familiar with this model (and startup compensation in general). Sure, performance should be rewarded and vested out employees probably need new grants, but the fact remains the initial grant for an early employee is lower than anything I’ve seen. Any advice? Edit: raised ~2M seed last year
Are they going to be acquired or go public in the next 2-3 years? Do you plan to stay with them for the long-haul? If no to either one, it’s not worth negotiating equity. You’re more likely to leave the startup before equity means something.
Thank for your reply. There exit plan is to IPO or be acquired. If they grow at the rate they claim (and I like it), then I don’t see why I wouldn’t stay for the long haul.
That is everyone’s plan... it’s a matter of how long it will take, do they have enough runway for it to happen or will someone come along and do it better? If you believe in the startup go for it. But don’t believe the hype around equity. You’re (specifying in general) more likely to leave the startup before it sees real success. And that’s just more of a typical behavior for those who are just starting out in their careers.
Lmao $2M seed and they are already telling you it's a $500M+ company?! Run away, fast. The legal value of the company at this point is <$20M. Realistically, <$10M Delusional, dishonest and self-aggrandizing startup founders have failed 100% of the time in my experience. If the company is worth your time, they don't need to lie to make you stay.
That’s a bit unfair on them, and that’s poor articulation on my part. Of course they know it’s not that company today, though they talk about it being (in the future) an extremely valuable company like it’s just a matter of time - I guess you’ve got to have that attitude if you’re leading/hiring for the company. The founder and first few employees had successful careers at tech giants
Every startup founder says that, and 19/20 of them turn out to be wrong when their company fails, as is statistically almost inevitable. TBH the fact that they are saying that means they are far less likely to succeed than founders with the degree of realism, self awareness and cynicism (plus luck) required to deliver what is needed to be be one of the rare successes.
A successful careers at tech giants doesn’t mean anything. There’s a huge difference between building a startup and operating within a tech giant. But Bloomberg does have a point. The company is only worth whatever their current valuation is. And I would gauge your equity on that alone.
Agre 100%. Performance in Startup and BigCo are different, but being a GM at a tech bigco is probably more akin to running a company than being a junior dev at one. I dont know how much that translate to improving your chances of success. Maybe more for aquihire exits? These guys were general managers, heads of development
Treat options at a startup, especially how you’re describing this one, as a lottery ticket. If it pays out, great. What you’re going to get from this that might be worth it, is accelerated experience. I was employee #2 at a startup after 3YOE and it leveled me up several times over.
Cash is really good for yoe and startup, I’m with the other posters, startup founders vastly overestimate their likelihood of success so I wouldn’t count equity as anything but can’t hurt to ask for more (try .5%). Also, are they sharing runway, revenue, addressable market size and share structure with you?
Cash is good. Equity would be closer to 0.1+ but only 2 YoE makes it hard to negotiate for more. My advice would be to take the job if you think you will learn a lot and not get so hung up on the equity. Most startup equity never liquidates.
Thanks for the advice.