3 ms·
This is a straightforward, if not simple, math problem. Likelihood of happy path * happy path exit amount / happy path years until liquidation + equity-heavy s
by mchannon 8y ago
This is a straightforward, if not simple, math problem.
Likelihood of happy path * happy path exit amount / happy path years until liquidation + equity-heavy salary
A few considerations in terms of populating those numbers:
1. The entrepreneur's fallacy: You expect it'll either go gangbusters or fail suddenly and spectacularly, but the third case is most likely: the zombie case, where the company isn't thriving, but isn't dying either. You're still expected to work at that below-market rate for that underwhelmingly-performing equity.
2. Stockholm Syndrome fallacy: You assume that the company will vest according to plan, and future investors won't wash out your equity. Sometimes early employees make out like bandits when the company does well, but other times the management will get in bed with partners who sportf••• the early employees out of their share at the last possible minute.
I'd head over to thefunded and do your own due diligence on the prominent companies and VC's. Are they the sorts who dance with the girl they brought, or toss her aside and laugh about it later?
- muzani 8y agoThe zombie option is by far, the worst. You'll still keep going at a large opportunity cost. Nobody will want to end it and often the first who does becomes the scapegoat. Better to be unemployed than stuck in a job nobody wants.