4 ms·
Never ever compromise salary for equity. The equity is what you get in exchange for the risk that the company will not be successful; and for all the extra hou
by horsecaptin 9y ago
Never ever compromise salary for equity.
The equity is what you get in exchange for the risk that the company will not be successful; and for all the extra hours you'll probably be working.
The salary is what you get because that is how much your position pays in the market.
Things to compromise salary for:
- You need a job badly. You're already planning your own exit.
- If you were to get a higher salary somewhere else, you'd still prefer to work here.
- You don't need the money.
- brianwawok 9y agoIf you go by this, no one would bootstrap. By definition you give up salary for 100% equity. Dont sacrifice salary for not enough equity is a better rule.
- joshvm 9y agoArguably that falls into the last category. If you can work for nothing but equity, then somehow or other you don't need the money (right now).
- john_moscow 9y agoMaybe the key here is distinguishing equity from actual control. Non-controlling equity in a private company is like buying a bond with no maturity date, relying on the founders' good faith.
- morgante 9y agoYou probably shouldn't compromise much on salary, since plenty of startups are happy to pay market salaries. The trade-off for startups vs. big companies is really in whether you're getting liquid RSUs (with clear cash value) or private options (with more upside), not so much on the salary side—especially these days.
- curun1r 9y agoThere are good reasons to want to work at a startup. The biggest is that you'll be allowed to get in over your head more so than you will at a more established company and putting yourself in sink-or-swim situations is the fastest way to learn to swim, so to speak. After having been through two acquisitions now, I've grown faster during the "whatever it takes" periods than I have in the golden handcuffs times that followed. But the rough formula I've followed is to calculate my "investment" in the company and compare it to the company's other investors. I look at the company's last round and figure out how much the investor(s) paid and what percentage the investor(s) got. Then I can look at the offer and see what percentage I'm getting and work out how much that would have cost in the most recent round. If the salary hit I'm taking is considerably more than that, I either ask for more equity or walk away. If a company won't give me the information necessary to perform this calculation, I walk away. It's not perfect, but it's close enough that I can make a somewhat logical decision and not simply cave in to my preference for working in a startup environment. Investor's shares can be somewhat more valuable due to liquidation preferences and other favorable terms, but employees can also get retention grants if the company is acquired, so I haven't figured out a way to balance those considerations.