4 ms·

Good call. I was going to suggest they should be able to see: * preference stack * strike price * last valuation with board/investors If you can't get those,

Good call. I was going to suggest they should be able to see: * preference stack * strike price * last valuation with board/investors If you can't get those, then unless the equity is just butter to you, walk .. as you don't really know what the comp looks like.

jiveturkey 8y ago
so are you saying you’ve ever been able to get those numbers? i never have.
- mikestew 8y ago
  I see this advice bandied about, and I have to assume that I've just never hit on one of those companies, or there are somehow two classes of interview candidates. Because I'm 0-3. And, when I think about it, hell no I'm not handing a cap table to some senior dev candidate. Higher up the chain, maybe, but not some NCO[0] with a fancy title. Taken another way, when companies refuse to give you the numbers to properly evaluate the potential value of equity, then you properly value it at zero and ask that salary be bumped up. And, yes, that works and much better than asking for numbers you'll never get. [0] https://en.wikipedia.org/wiki/Non-commissioned_officer https://en.wikipedia.org/wiki/Non-commissioned_officer
  - woolvalley 8y ago
    What happens if your cap table is public? I would imagine if your wooing investors, they will get to see the cap table + more even if they never invest. And VCs talk to each other, so they can probably find out if curious from other VCs. Why all the secrecy?
    - jiveturkey 8y ago
      I've only ever heard of one company with a public cap table. After a bit of googling, I found them again: https://open.buffer.com/buffer-open-equity-formula/ https://open.buffer.com/buffer-open-equity-formula/ . EDIT: lol the same link is in TFA. The problem with a public cap table is that it amounts to a public salary database. Usually companies (and employees) don't want everyone to publicly know everyone else's salary. When people do jobs you don't understand (like marketing, for the tech crowd here), or are perceived as underperforming, removing all doubt about their compensation breeds contempt. Anyway, even buffer doesn't publish enough information as they don't publish the "preference stack". Whether by design or an oversight is hard to say. And you can't really publish it as it will lead to difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity. Sure, VCs talk but (speaking as a not-VC) I doubt they are going to share cap tables and such. They are busy people. If you, as a VC, care, talk to the company yourself. Even if they would share peer-to-peer, you are not a VC so you are not going to be privy to this VC-public info.
      - woolvalley 8y ago
        I think not revealing individual employees stocks is probably fine with most employees if the company doesn't have public salaries. You would put that in a summary 'employee stock' category in the cap table. "difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity." So basically looking for useful idiots as they really realize that the startup is definitely not a good deal? They are investors after all, but investors without full disclosures.
      - vkou 8y ago
        > Usually companies (and employees) don't want everyone to publicly know everyone else's salary. Actually, employees would love to know everyone else's salaries. This gives them a stronger negotiating position.
- icedchai 8y ago
  I have... but you have to be within the first 10 employees or so.
  - jiveturkey 8y ago
    well, within the first 10 employees you are coming in just before or just after series A. You can just assume what the stack looks like.
    - icedchai 8y ago
      Not really. Two startups can have vastly different cap tables, even before the A round, if they even make it there. I have witnessed this first hand. Some have trouble raising seed money and blow 50% or more of their equity just in the seed round alone. Others are more promising, may only give up 10 or 20%...
- ironchef 8y ago
  Yup. If I can't then I'm treating the equity as $0 as I don't have a realistic view of what's happening. Which _can_ be ok... if salary plus bonuses are high enough... then you're not betting on your horse to come in anyways, you're betting on putting your nose down and getting things done.
pge 8y ago
if the company won't share the preference stack with you, look up the total amount of capital the company has raised (or ask the question that way - that may be more likely to get an answer). In most cases, the preference stack = total capital raised.
- ironchef 8y ago
  I _think_ you mean most cases preference stack is _at least_ total capital raised... and therein lies the rub... if you have some latecomers coming in at 1.5 or 2x that drastically affects payouts.

jiveturkey 8y ago

so are you saying you’ve ever been able to get those numbers? i never have.

mikestew 8y ago
I see this advice bandied about, and I have to assume that I've just never hit on one of those companies, or there are somehow two classes of interview candidates. Because I'm 0-3. And, when I think about it, hell no I'm not handing a cap table to some senior dev candidate. Higher up the chain, maybe, but not some NCO[0] with a fancy title. Taken another way, when companies refuse to give you the numbers to properly evaluate the potential value of equity, then you properly value it at zero and ask that salary be bumped up. And, yes, that works and much better than asking for numbers you'll never get. [0] https://en.wikipedia.org/wiki/Non-commissioned_officer https://en.wikipedia.org/wiki/Non-commissioned_officer
- woolvalley 8y ago
  What happens if your cap table is public? I would imagine if your wooing investors, they will get to see the cap table + more even if they never invest. And VCs talk to each other, so they can probably find out if curious from other VCs. Why all the secrecy?
  - jiveturkey 8y ago
    I've only ever heard of one company with a public cap table. After a bit of googling, I found them again: https://open.buffer.com/buffer-open-equity-formula/ https://open.buffer.com/buffer-open-equity-formula/ . EDIT: lol the same link is in TFA. The problem with a public cap table is that it amounts to a public salary database. Usually companies (and employees) don't want everyone to publicly know everyone else's salary. When people do jobs you don't understand (like marketing, for the tech crowd here), or are perceived as underperforming, removing all doubt about their compensation breeds contempt. Anyway, even buffer doesn't publish enough information as they don't publish the "preference stack". Whether by design or an oversight is hard to say. And you can't really publish it as it will lead to difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity. Sure, VCs talk but (speaking as a not-VC) I doubt they are going to share cap tables and such. They are busy people. If you, as a VC, care, talk to the company yourself. Even if they would share peer-to-peer, you are not a VC so you are not going to be privy to this VC-public info.
    - woolvalley 8y ago
      I think not revealing individual employees stocks is probably fine with most employees if the company doesn't have public salaries. You would put that in a summary 'employee stock' category in the cap table. "difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity." So basically looking for useful idiots as they really realize that the startup is definitely not a good deal? They are investors after all, but investors without full disclosures.
    - vkou 8y ago
      > Usually companies (and employees) don't want everyone to publicly know everyone else's salary. Actually, employees would love to know everyone else's salaries. This gives them a stronger negotiating position.
icedchai 8y ago
I have... but you have to be within the first 10 employees or so.
- jiveturkey 8y ago
  well, within the first 10 employees you are coming in just before or just after series A. You can just assume what the stack looks like.
  - icedchai 8y ago
    Not really. Two startups can have vastly different cap tables, even before the A round, if they even make it there. I have witnessed this first hand. Some have trouble raising seed money and blow 50% or more of their equity just in the seed round alone. Others are more promising, may only give up 10 or 20%...
ironchef 8y ago
Yup. If I can't then I'm treating the equity as $0 as I don't have a realistic view of what's happening. Which _can_ be ok... if salary plus bonuses are high enough... then you're not betting on your horse to come in anyways, you're betting on putting your nose down and getting things done.

pge 8y ago

if the company won't share the preference stack with you, look up the total amount of capital the company has raised (or ask the question that way - that may be more likely to get an answer). In most cases, the preference stack = total capital raised.

ironchef 8y ago
I _think_ you mean most cases preference stack is _at least_ total capital raised... and therein lies the rub... if you have some latecomers coming in at 1.5 or 2x that drastically affects payouts.