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Why is the assumption of 0.01% absurd? From what I have seen, that's exactly what an early employee can expect. 10% of the available stock gets split between th

Why is the assumption of 0.01% absurd? From what I have seen, that's exactly what an early employee can expect. 10% of the available stock gets split between the early employees, most of which (9%) goes to the founders/c-suite. The other 90% is reserved for investors, of which the founder(s) may be one. If you have 100 employees by the time you exit, and 1% of the stock was divided among them (exactly the situation where I am), each would get.. 0.01%. That is 0.0001 of the issued shares..... as options. This is no longer uncommon.

scosman 9y ago
That's not correct. The founders already have stock before any round. They typically don't get any of the ESOP. In early rounds the ESOP is essentially carved out of the founders stock, it doesn't make sense to give some of it to them (just negotiate a smaller ESOP). Also, founders are not considered investors in the sense you mention (different stock classes). Secondly "by the time you exit" isn't relevant. Your stock is setup by when you join. If you join a company with 100 people, sure you get less. But 0.01% for Seed/A isn't even close. If that's what you get offered, don't take it.