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Ask HN: How much equity in early stage startup for a developer?
How much equity can I get from a startup of about 10 people including the founders? Let's say I'd be developer #4 or #5. Other people aren't developers and they already raised a few millions in seed founding.
- smt88 10y agoWhatever you get, make sure you get paid a fair salary. Equity is cool, but you should pretend it's worth nothing at this stage (it likely never will be worth anything).
- mkhpalm 10y agoTotally undervalued advice these days. You can't eat equity.
- minimaxir 10y agoOn Tuesday, I published an interactive chart of Salaries/Equity offered to prospective job applicants in the Bay Area on AngelList: http://minimaxir.com/2016/05/sfba-compensation/ http://minimaxir.com/2016/05/sfba-compensation/ Since AngelList favors early-stage startups, that will give you a good starting point on equity amounts. (tl;dr: do not expect much)
- jstnjosepht 10y agoSam mentioned in How to Start a Startup that he advises giving 10% of the company to the first ten employees. Assuming even distribution, I've been curious myself to know if the founding team lacks technical co-founders, would the first engineering hire be worth more equity?
- jpeg_hero 10y ago1%
- jasonkester 10y agoZero. At least, it's best to go in knowing that that's what it is going to be worth in the end, so that you'll be able to negotiate correctly. They'll probably quote you a percentage and spin a story that ends with you walking away with a cool quarter million when they exit (assuming their optimistic math works out as expected). That's good, because you know that new startups fail outright roughly 90% of the time, and never pay meaningful equity returns the remaining 10% (with the actual exits that are good for employees living in the rounding error of that last number). But now you have something with a stated value that you can negotiate away in exchange for additional consideration on top of the market rate they'll need to bring you in. I personally used to prefer trading my options for extra paid vacation. If they suddenly decide that those options aren't actually worth all that money after all, now that you've decided to trade them away, you can start talking about that 90%/10%/0% outcome breakout above and bring in terms like "hazard pay" to offset the near certainty that you'll be back on the job market in eleven months time. This may affect their impression of whether you're going to be a "team player" who "shares their vision". Which is fine. You're trading your time for money. If they don't want to do that with you, they can keep looking and hopefully find that idealistic kid they're looking for who can't do simple math in the presence of a happy narrative. Good luck!
- mailslut 10y ago^ This!
- uptownfunk 10y agoLove this.
- iurisilvio 10y agoI totally agree with this response, but as first tech employee you have good leverage. Possibly only you know what's happening and the cost to change is high. You can try to negotiate equity to a CTO position instead of first developer. If they have more tech employees, you lose this leverage.
- alain94040 10y agoThis is a market, so check out similar offers. You'll find plenty on AngelList which will give you a pretty clear idea of where the market is right now in terms of equity for early employees.
- zer00eyz 10y agoIts not about how much you get, its about what the shares represent. Do you know what a CAP table is? Can you read one? Good your 1/2 way there. If they are brining you on at this point and balk at showing you a CAP table, run the other way.