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The strongest case for startup equity as compensation is made by Ben Kuhn, in my opinion, and it amounts to: you can diversify your equity exposure in more comp
by shuckles 5y ago
The strongest case for startup equity as compensation is made by Ben Kuhn, in my opinion, and it amounts to: you can diversify your equity exposure in more companies than you could as an angel because (i) the best companies will want to hire you and (ii) you can quit your company as soon as it appears to not be a rocketship, something you'll have insider knowledge of. https://www.benkuhn.net/optopt/ https://www.benkuhn.net/optopt/
- spamizbad 5y agoThe fact that this is the strongest argument is pretty damning. Most startups aren’t offering 1%. And that percentage will be diluted as the company works through various funding rounds. Likewise, if you quit, you generally have a limited window to exercise your options, and you have to shoulder the tax consequences when you exercise even if the company hasn’t had a liquidity event.
- tempforquestion 5y agoThat is actually a good point and the kind of info I was looking for. Paying for equity is "work" means I could stop working whenever I felt like, where a VC cannot (easily) ask the money back.