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If they are getting a salary, that's probably right. The general rule is the first hire gets about 1% and it goes gown from there. But, the range for 1-10 emplo
by relaunched 5y ago
If they are getting a salary, that's probably right. The general rule is the first hire gets about 1% and it goes gown from there. But, the range for 1-10 employees is about 1-0.1%. It doesn't sound like much, but think about it this way. 0.1 percent, when the company goes IPO at a 10 billion market cap is probably 40-50 million dollars.
If you aren't getting a salary, but are working, you're a co-founder and the equity should be higher.
- javert 5y ago.1% of $10 billion is $10 million. His share would be .2%, so $20 million. But that's not factoring in any potential dilution.
- closeparen 5y agoNow supposing it takes 8-12 years to see liquidity, compare to what you could make in a FAANG career… perhaps $4-5 million? Whole lotta risk for maybe 5x upside.
- deleted 5y ago[deleted]
- relaunched 5y agoI was doing quick math and was off by a factor of 10, inclusive of dilution. Sorry.
- sp332 5y agoIsn't there going to be a lot of further dilution between when a startup hires its 10th employee and when it goes public at $10B? Getting 0.1% to begin with is going to be a lot smaller when the money comes in.
- javert 5y agoYes, I'm curious about this too. How much dilution should be expected? Is there a way to think about this? (OP here.)
- singron 5y agoI've heard 10-20% dilution each round (assuming the company is doing well), and probably 3-6 rounds before liquidity or indefinite illiquidity. Obviously there are circumstances outside of that, but that already ranges from barely any cumulative dilution to having a third of you original stake. If the company isn't doing well, then dilution can be worse, and your valuation will also be lower, so you will own a smaller piece of a smaller pie.
- grammarnazzzi 5y agoHow much is the company worth today? That will tell you what the percentage points are worth.