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Just week ago there was discussion about options and people shared this tool (https://tldroptions.io/ https://tldroptions.io/) to calculate amount of money an e
by Mikho 9y ago
Just week ago there was discussion about options and people shared this tool (https://tldroptions.io/ https://tldroptions.io/) to calculate amount of money an employee gets based on round and % of the company as options.
Despite the fact that in reality even in best case scenario the sum is rather small -- like 0.01% of a Series A startup with $1B exit will give you like $40K for your 6 year work -- more important issue is different liquidation preferences VCs get for their money.
So, each of many many VCs that invested in a startup by the time of exit exercises own liquidation preferences to scrape every possible dollar -- and in many cases disproportionately more than their fair shares of the startup due to liquidation preferences. As a result there is not so much money left to share among employees after all investors in aggregate get out their money and exercised preferences.
And this is best case scenario. So, a startup needs to have multi-billion exit for employees could make any real money.
- emmett 9y agoIf you join a startup immediately following a Series A and you only get 0.01%, you almost certainly got screwed. We were fairly stingy with equity, and an engineer joining then would have gotten around 0.5%, 50x what you're basing your math on. And over a 4 year vesting period, not a 6 year one. $2mm ($40k x 50) for your 4 years of work is substantially less bad. And employees who stayed with us tended to get new equity grants over time as well. So yeah, don't take a startup job for tiny amounts of equity. You should get significant equity for joining that early with that much risk.