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Hi, I got a job offer for a leadership position at a B series startup. 195k base and .4% equity over 4 years (current evaluation about 900k but with large growth potential). Base pay and benefits are less than current package and equity is of course uncertain. Any recommendations on how to compare this to current non-startup comp (TC 700k). Thanks!
define leadership. and you can’t compare to non startup (hard cash) company. you can only compare to other startups. you’re trying to compare an apple and a giraffe
Director role
maybe a little low but not terribly so. like amazon said you’ll want to verify the numbers behind their valuation and other data around their fundraising activity. i can’t possibly go into it all in a simple blind post. but you can look at a single simple metric like revenue multiple and yoy traction (user growth or whatever metric they use). if the valuation is like 150x ARR this is a highly risky bet considering what’s happening right now in short term markets
Nice
.4% equity is a solid offer for Director at Series B. I don’t know why everyone else keeps talking about valuation when stating equity as a percent normalizes for that. Normally this is only an issue when the company gives you a dollar figure but not a %. Then you need to understand the valuation so you can derive the %, which is all that matters. In joining an early stage startup, there are only two things that matter: 1) your % ownership 2) what value you *think* the company will achieve at exit, or at least by the time your share becomes liquid The second one is completely subjective and impossible to predict with any sort of precision.
because we are in the midst of a correction and 2021 valuations are well off the mark. this is going to significantly negatively affect private companies. there’s a guy did an analysis that it seriously affected later stage companies in the last 3 crashes. not so much on earlier stage but it remains to be seen how they will fare
% means nothing if it’s non-preferred stock. in a correction, investors get as much money back as they can. what’s left goes to founders, etc.
0.4% at 225M valuation, Series B is not bad specially if the growth is high. It is already de-risked significantly given that it is Series B. You can ask for more base, they can probably afford it.
Depends on what you mean by "de-risked". 88% series B startups don't exit (IPO or aquisition) eventually. Here is the source: https://medium.com/journal-of-empirical-entrepreneurship/dissecting-startup-failure-by-stage-34bb70354a36
It is better than Series A, Seed series and pre-seed startups. Also, most series B startups equity can potentially be sold in the private market.
Director eng? Or something else?
Yes
No. Stay at NVIDIA unless you really are passionate.
Man, if you have 700K TC, why for have you even started thinking about this offer?..🙈
More money creates quest for more money 😊?
Terrible offer. A set of professional investors whose job is to value such companies valued it at x. That means X is as accurate a value as you're going to get. Your TC is $425k in this offer. Since the stock is riskier that your current employer they should be paying you a premium - not the other way around. I would ask them to increase the equity at least 3x to make it remotely worth it. If you really believe in the company as an investment, buy their stock in the secondary market (at this stage it probably exists). That way you're not going to have emotional attachment.
Excellent
💯 sorry for cluttering the thread with a simple emoji but very well put. It helped me understand better
Terrible offer
It’s literally impossible to answer this question without knowing the company and what space it’s operating in Funding rounds this last year have been so massive that it’s hard to recommend a startup to anyone. Basically: If your company is one of those that raised > $50m at series B and has a crazy valuation it’s a terrible offer t
The company is in the AV space. Can you elaborate on why it’s a terrible offer? Because current evaluation is presumably inflated?
Yes, as everyone on this app knows growth stocks are taking a huge beating and that hasn’t carried over yet to the private markets Embark trucks has IPOd @ $10 per share and is in the AV space. Currently it’s sitting at $3.65 Unless you really really believe in the startup or have some strong connection to it I’d hold off. The equity they’re offering probably isn’t worth what they say it is