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Honestly, I think most startups are betting that employees don’t know any better. This was true up to maybe 5 years ago, but sites like levels.fyi have really

by lumost 4y ago

Honestly, I think most startups are betting that employees don’t know any better. This was true up to maybe 5 years ago, but sites like levels.fyi have really made this trade off clear to potential employees. Half the time when I talk to a potential hiring manager at a private company, they really don’t know what the equity is worth or how it’s structured. I’d argue that an effective 20-30% discount on 409A for employees in series C+ is about right. On a successful, but expected, exit - this gives the employee some premium compared to working at a public tech company in exchange for deferred compensation and liquidity risk.

tfehring 4y ago
> Honestly, I think most startups are betting that employees don’t know any better. Yeah, that's probably accurate. For whatever reason, many seem to view equity as a "check the box" formality rather than a material part of your compensation. I mostly avoided non-unicorn startups during my last job hunt for that reason, but the few that I got around to talking numbers with offered <$50k in equity over 4 years (and in the form of options to boot); the equity comp for the role I ended up taking is around an order of magnitude higher.