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On the contrary, because it has a low perceived value they make up for it with volume. Look at how Uber throws insanely high paper-valued equity to its hires. S

On the contrary, because it has a low perceived value they make up for it with volume. Look at how Uber throws insanely high paper-valued equity to its hires. Similarly when I worked for a startup I was promised almost a full percent of a company they expected to grow to a hundred-million dollar valuation. $1m for a year's work? Can't go wrong with that. (Side note: I didn't get the equity as I was conveniently laid-off a few days before my cliff vesting date. Lovely...)

tptacek 10y ago
I haven't seen that happen but I totally believe that it does. So there's two different ways things go haywrite because nobody knows how options work.
- user5994461 10y ago
  I've done the other way around. Leaving before 1 year and not giving a f* about options. Even if the company makes it big later (hundreds millions), a diluted infinitesimal percentage is peanuts compared to a better offer right now. By the way, totally used the imaginary lost-stock as leverage in the negotiation. That was probably the best way to cash it out. :D
  - DaiPlusPlus 10y ago
    When seeking unvested equity matching, what kind of evidence does the hiring company typically seek to verify your request - or do they just take you by your word? I wonder if I could apply to Google or Facebook and claim I have $2m of unvested equity from an unnamed startup...
    - user5994461 10y ago
      Noone verifies anything. It's the usual dance where you say what it will take for you to join them and they ask your current salary. Should be part of that conversation: The £10k of stocks you'll loose when joining them [low minimum, at current valuation]. It was named startup (that noone knows). It was featured in various news as a top X startups to watch in the UK.
planteen 10y ago
Ouch. Did they reach $100MM valuation or were they below that?
- DaiPlusPlus 10y ago
  They're still in submarine mode, though with fewer employees there now than when I was there. They have enough VC funding to last them a couple of years of zero revenue, though a friend of mine who is still there says they've secured a couple of high-profile business deals. That's all I know. The founder has a good track record - though I think he's looking to sell it before it gets that big. My friend there thinks whatever stock options he has will simply be diluted by equity sales during future investment rounds anyway.
user5994461 10y ago
> $1m for a year's work? It's usually 4 years vesting. So obviously, it is NOT $1M for a year work.
- DaiPlusPlus 10y ago
  Sorry, yes, it was to vest over 4 years, but extra stock would be added annually - so after 4 years my equity might be $4m cumulative, which is $1m/yr on average.
  - user5994461 10y ago
    No you won't... unless you've got that in writing... and even there it's not guaranteed. Companies say all kind of fake promises, don't trust them. Sadly, being laid off on your last month is a lesson of that ^^
icedchai 10y ago
I've never met an entrepreneur who didn't expect their company to grow to a huge valuation. Did you believe them? Your 1% would probably be diluted down to 0.25%... maybe less... by the time they hit that valuation. Factor in the salary you possibly gave up. Factor in the taxes. Factor in the odds of even having a liquidity event. Your expected return is a lot less than $1M.

tptacek 10y ago

I haven't seen that happen but I totally believe that it does. So there's two different ways things go haywrite because nobody knows how options work.

user5994461 10y ago
I've done the other way around. Leaving before 1 year and not giving a f* about options. Even if the company makes it big later (hundreds millions), a diluted infinitesimal percentage is peanuts compared to a better offer right now. By the way, totally used the imaginary lost-stock as leverage in the negotiation. That was probably the best way to cash it out. :D
- DaiPlusPlus 10y ago
  When seeking unvested equity matching, what kind of evidence does the hiring company typically seek to verify your request - or do they just take you by your word? I wonder if I could apply to Google or Facebook and claim I have $2m of unvested equity from an unnamed startup...
  - user5994461 10y ago
    Noone verifies anything. It's the usual dance where you say what it will take for you to join them and they ask your current salary. Should be part of that conversation: The £10k of stocks you'll loose when joining them [low minimum, at current valuation]. It was named startup (that noone knows). It was featured in various news as a top X startups to watch in the UK.

planteen 10y ago

Ouch. Did they reach $100MM valuation or were they below that?

DaiPlusPlus 10y ago
They're still in submarine mode, though with fewer employees there now than when I was there. They have enough VC funding to last them a couple of years of zero revenue, though a friend of mine who is still there says they've secured a couple of high-profile business deals. That's all I know. The founder has a good track record - though I think he's looking to sell it before it gets that big. My friend there thinks whatever stock options he has will simply be diluted by equity sales during future investment rounds anyway.

user5994461 10y ago

> $1m for a year's work? It's usually 4 years vesting. So obviously, it is NOT $1M for a year work.

DaiPlusPlus 10y ago
Sorry, yes, it was to vest over 4 years, but extra stock would be added annually - so after 4 years my equity might be $4m cumulative, which is $1m/yr on average.
- user5994461 10y ago
  No you won't... unless you've got that in writing... and even there it's not guaranteed. Companies say all kind of fake promises, don't trust them. Sadly, being laid off on your last month is a lesson of that ^^

icedchai 10y ago

I've never met an entrepreneur who didn't expect their company to grow to a huge valuation. Did you believe them? Your 1% would probably be diluted down to 0.25%... maybe less... by the time they hit that valuation. Factor in the salary you possibly gave up. Factor in the taxes. Factor in the odds of even having a liquidity event. Your expected return is a lot less than $1M.