i will be offered a role in a startup. They are in seed with 3mil+ in funding. i will be the #5 employee and most likely they will give 5%. how much should I ask. Also, with every round of funding the percentage will dilute. I dont know how the math works and is it worth even taking the risk. Just a thought, if after series A they are acquired, my percentage would be around 3.65% and assuming acquistion of 35mil, I would making around 800k which I can already do it if I stay at FB for 3 years. Any insights or experience appreciated
Kind of agree with the pessimistic view of startup equity... Go work there if you think it's an interesting challenge or you love the team. Otherwise, if you are just interested in TC, you're better off (from an EV perspective) to work at FANG.
It’s very difficult to go above E5 in Facebook. Also I don’t understand the perspective that you should not work for tc in a startup. If that were true then none of the early employee will make money
the expected value of your stock is 0. and yes early employee ratio of work to payout is slim compared to founder. by your logic then if every early employee makes fu money then every founder becomes billionaire?
the wisest thing anyones ever told me. ive done 5 early start ups as both founder and early emp. heres how to evaluate. take # of shares divide by percentage, multiply by chance of success, divide by years to exit and finally multiply by zero. thats how much the non cash part is worth
Finally multiply by 0. That's the important part.
If we go by that rule, then one would never work for a startup, even if you believe it would succeed