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We need to know the answers to a few questions: Do you know how the equity is currently divided? Is it 40-40 for the two founders (assuming only 2) and 20% lef

We need to know the answers to a few questions: Do you know how the equity is currently divided? Is it 40-40 for the two founders (assuming only 2) and 20% left over? Have they taken any equity funding yet? Is it just starting out, or would you be employee number 13? Knowing what they have available to offer, where they are along the start-exit line, and their current equity position will give you a good idea of how to negotiate. Another angle, will you be taking a salary? If you're making a modest salary then it is perfectly acceptable to be offered only a small fraction of equity. You may very well be making more than the founders are. If you want more equity in the company, offer to forgo a salary or take only what the founders are taking. working at a startup is riskier for employees than for founders. I disagree. The founders take the most risk, and get the most reward because of this. Founders typically make millions or $0. Employees don't typically make millions, but it's against the law for them to make 0. They earn a regular salary, which is less than the millions the founders might make, but they earn it consistently. There's a trade off.

bobp 19y ago
I'm not sure how the equity is currently divided, but these are very good questions, thanks. The company had an A round and it has about 10-15 employees. I should have said that founders are exposed to greater risk in the very early days of the company, but afterwards the chance of meaningful financial payoff for employees becomes much smaller. Most startups won't be the next Google or Ebay, and I think they should take that into consideration when incenting their employees with stock options.
- dkokelley 19y ago
  If the company already has about 10-15 employees, you're not looking at much equity left, assuming that the other employees get the same you do. If 2 founders and 10 employees got equal amounts, you would be looking at 8.3% per person, and if there were 17 people total (15 + 2 founders, not including you) that puts the company at 5.9% per person. This is just a starting point, You have to assume that the founders have the lion's share of the equity, and that the amount of equity per additional employee trends downward the later the employee joined. It could be that the company only has 5% equity left for future employees, and so they have to offer only a small percentage of the equity. In any case, try to see what they have available, and again, offer to take only a token salary if anything in return for a greater equity share. Good luck!

bobp 19y ago

I'm not sure how the equity is currently divided, but these are very good questions, thanks. The company had an A round and it has about 10-15 employees. I should have said that founders are exposed to greater risk in the very early days of the company, but afterwards the chance of meaningful financial payoff for employees becomes much smaller. Most startups won't be the next Google or Ebay, and I think they should take that into consideration when incenting their employees with stock options.

dkokelley 19y ago
If the company already has about 10-15 employees, you're not looking at much equity left, assuming that the other employees get the same you do. If 2 founders and 10 employees got equal amounts, you would be looking at 8.3% per person, and if there were 17 people total (15 + 2 founders, not including you) that puts the company at 5.9% per person. This is just a starting point, You have to assume that the founders have the lion's share of the equity, and that the amount of equity per additional employee trends downward the later the employee joined. It could be that the company only has 5% equity left for future employees, and so they have to offer only a small percentage of the equity. In any case, try to see what they have available, and again, offer to take only a token salary if anything in return for a greater equity share. Good luck!