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That's actually so much of why people feel underpaid. Pay varies incredibly widely. The job also varies quite widely, but when you're not in the job, IC sound
by codefreeordie 4y ago
That's actually so much of why people feel underpaid. Pay varies incredibly widely. The job also varies quite widely, but when you're not in the job, IC sounds a lot like IC. You could be an IC with a total compensation of $80k (and actually getting $80k), you could be an IC with a TC of $300k (and actually getting $300k), and you could be an IC with a TC of $750k (and actually getting something like $200k-250k because your employer is private and your equity is all hypothetical)
- scarface74 4y agoIf your employee is private, it is silly to count non liquid statistically meaningless “equity” as part of your compensation. “compensation” is something I can trade for cash once I have earned it and then exchange for good and services.
- TooKool4This 4y agoIt’s also incorrect to assume the expected value of the equity is zero. It’s much more useful to model it as E(x)=x*p(x), especially if you have some useful information on estimating p(x) that a person working at a startup might.
- scarface74 4y agoEvery startup thinks their company is going to be successful. No matter what the person thinks who is working their, they don’t know when the investors will cut their losses or when the market isn’t hungry for money losing startups and the VCs have to put off going public…like now.
- lhorie 4y agoPaper equity for late stage startups can be traded for cash in secondary markets like EquityZen
- scarface74 4y agoIf your company allows it and it will probably be at a discount.
- pyuser583 4y agoOnly if the company allows it. Many don’t.
- thrwy_ywrht 4y agoIt's also silly to discount the value of non-liquid equity to zero, unless you think there is literally zero chance of experiencing a liquidity event.
- scarface74 4y agoIf only 1 out of 10 startups “succeed” where success is defined by “the investors got their money back”. What are he chances for you as an employee getting any meaningful returns? The investors are well diversified, you aren’t as an employee. Besides that, it takes the average startup 7-10 years to exit. As opposed to a public company where you can diversify your risk every three to six months depending on your vesting schedule.