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The real truth is that equity is primarily used as a way for startups to pay lower salaries. 3 and 4 year vests further reduce the likelihood you will ever see
by anonnel 8y ago
The real truth is that equity is primarily used as a way for startups to pay lower salaries. 3 and 4 year vests further reduce the likelihood you will ever see the equity offered. Let alone that you will have usually a one month period to put up the purchase price of your options. So if you don’t have an extra 2-10 grand lying around (because you were given equity instead of salary, for instance) you will forfeit your equity. Founders and execs also get waay more equity than than the code monkeys, and exercise priority.
I’m not saying don’t think about equity, but don’t let someone sell you a bill of goods either.
- rco8786 8y ago2-10 grand is way low. I’ve bought out my equity from two startups and they were both over 15k despite only vesting a small portion of the overall grant.
- anonnel 8y agoGood data point. Yes, very few folks have it available. Especially younger folks who get talked into equity comp. Sure, you can get a loan or something. But it’s a lot to ask for most people.
- lutorm 8y agoYes, especially if you wait a while and get hit with the massive ISO exercise AMT tax because the fair market value is now high. I've paid well over $100k in AMT because of this.