In the late stages at a Series A startup. Haven’t had the comp conversation yet, but I’m a good culture and skills fit. They’ve raised a decent chunk of capital (20m) but not sure their valuation. They are quiiiite small, quite small indeed. But great product and seeing adoption already. Is there an objective way to think about what I should ask for? I see people say 0.1 equity, 0.25, etc… but is there an easier way to frame it? for instance, the risk of this company not raising another round is 50%, i feel safe in my current role, so maybe ask for my TC x2? even if most of it’s paper money idk. seeking insights here. thanks Blind! tc: 500+ #google #netflix #coinbase #meta
This is one example: https://images.app.goo.gl/eh8emJerC6bu7qrA6 I'd ask them what they want to optimize for, preserving equity vs. saving dollars for burn rate. Let them identify those relative priorities in order to find a comp package that aligns well.
great advice, thanks 😊
The risk isn’t about getting to the next round, it’s the risk of getting to a liquidity event. The risk of the company not getting there is way higher than 50%.
+1 i’ve heard some companies have liquidity events during funding rounds but yes this is a good point. i suppose i was being charitable to the startup
If they raised $20m, they are likely worth between $40-60M. 0.1% means $40-60k. That’s not worth a lot even today even in the best case scenario. In 99% cases, it is worth $0. You’ll get diluted to 25-50% of this by the time they reach an exit Because you are taking so much risk, wouldn’t you want to get more upside. Sounds like a terrible offer honestly if you are less than 100 employees.
what are your thoughts then? should i ask for 1%?
Depends on location, base salary and number of employees Logically, you can calculate it from your value or expected (E)TC ETC = base + equity Because equity is high risk, probably 1.5-2x for the risk Actual TC = base + ((ETC-base) * (1.5 to 2))
I think I know which startup, security firm?
oh crap!
Haha we may be working together someday :)
Only blind manages to make me feel poor
1 BJ
20m for 10-20% then 100m-200m val In terms of risk adjusted, they wont be able to offer better than your current tc. And it’s A, your TC suggests staff+ assuming not including appreciation so shoot for head of xxx, 3+% equity - even this will not worth much unless it IPO+ 100b cap. I am assuming youre in engineering/stem role.
There is no way they are worth that much, assuming they had a seed and series A, probably gave away 35-50% of the company, given the current funding environment
Unless you are able to sell the value is $0
i appreciate this fact, but it doesn’t help me