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Your not paid a little less, your paid a lot less, especially as the years go by. For example: Enter a startup as a sr.eng employee, and you get the same sala
by mahyarm 10y ago
Your not paid a little less, your paid a lot less, especially as the years go by. For example:
Enter a startup as a sr.eng employee, and you get the same salary that you got working at google. Instead of google equity & bonuses you get startup stock options.
Google gives you $150k/year salary & $100k/year in equity & bonuses for a total of $250k/year.
By entering the startup you have a good chance of losing that $100k/year you gave up because it fails. Over 4 years you have given up +$400k in equity compensation which is about $240k of after tax income. That is almost a quarter million dollars!
If that startup is successful later on, the IPO will likely be about 7+ years out. If the startup is sold in a few years, liquidity is 1-3 years out. That means the investment returns you would of gotten from those savings is also lost.
You should compare your equity grant to possible outcomes with something like this calculator:
https://friendlyoptions.org/#%7B%22numOptions%22%3A250000%2C%22strikePrice%22%3A0.08%2C%22numDilutedShares%22%3A50000000%2C%22numVestingMonths%22%3A48%2C%22numVestingCliff%22%3A12%2C%22optionType%22%3A%22ISO%22%2C%22optionsExpireValue%22%3A90%2C%22optionsExpireScale%22%3A%22days%22%2C%22optionsExpireEmployeeFriendly%22%3Afalse%2C%22earlyExercise%22%3Afalse%2C%22totalValuation%22%3A10%2C%22companyStage%22%3A%22seriesA%22%7D https://friendlyoptions.org/#%7B%22numOptions%22%3A250000%2C...