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And this is why you should never agree to a cliff. Your shares, if valuable to you, better start vesting from day one - especially if you have accepted lower co
by horsecaptin 11y ago
And this is why you should never agree to a cliff. Your shares, if valuable to you, better start vesting from day one - especially if you have accepted lower compensation in exchange for more shares. Either that, or you want to negotiate some sort of a severance package BEFORE you join the company. Think about it: the company will try their best to have you accept the lowest dollar offer in exchange of equity in the distant future - what will you do to protect against the downside of losing your job in the less distant future?
- URSpider94 11y agoI have never heard of, nor worked for, a company that offers vesting from day 1.
- kzhahou 11y agoAnother reason why it's kinda plain dumb to work as a non-founder employee at any startup except those on a clear exit path. Founders enjoy too many benefits and advantages. If the company succeeds, they become megarich while you cash in a nice bonus. If a founder underperforms, only rarely does a board take immediate action -- in sharp contrast to employees. And like you said, employees vest slowly, while founder is usually vested on day 1.
- greglindahl 11y agoI've been a founder twice, I had a vesting schedule for options and for founder's shares. Our investors insisted on it, for obvious reasons. We insisted on it because we wanted out founding team to play nice.
- URSpider94 11y agoThanks, I was going to say I thought this was the usual case, but I don't have direct experience. It's only fair to have founders vest too, so a co-founder who walks out after the first month doesn't walk away with a third of the company!
- URSpider94 11y agoVesting shares or options makes you an owner in the company. Especially for a start-up, you want to keep the number of owners as small as you can. There's a valid business reason not to hand out stock with every paycheck. You want to make sure people are in it for the long haul before you give them an ownership stake. If you're worried about fairness, you could bridge the time pre-vest with a cash reward, or offer a pro-rated cash payment if you quit or are terminated before the 1 year mark.
- meric 11y agoYou could always play hard ball in negotiations and insist you receive market salary plus a little extra for working in a risky company. Could work if you're that good. Then invest that money as an angel in other companies or buy stocks and get megarich doing that.
- horsecaptin 11y agoI understand if the company is paying a good base salary, then the equity is basically bonus to compensate for working the extra hours and working in a company that could go out of business. There is a balance. If the company wants you to accept a lower base in exchange for higher equity - then you better ask yourself, "hey, does this mean that the remaining salary buys that equity? If so, then why don't I start earning it immediately?". Just because someone doesn't offer you a fair deal, doesn't mean you can't demand a fair deal!
- greglindahl 11y agoThat's a good recipe to not ever get hired... even if you are a hot shot engineer.
- horsecaptin 11y agoIf I am accepting a lower salary, then my equity better start vesting right away. I'm getting compensated in salary+equity aren't I? Engineers really should think about this - by accepting a lower salary, they are investing the remaining salary into the company. That and all the overtime they'll be working.
- meric 11y agoYeah, definitely insist on a full salary. Structure the extra portion as a loan from the company that you only need to pay back if and when the options vest. That way if you're let go before the options vest, you worked a year with full salary and they aren't tempted to fire you before your options vest.