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The problem is that the expected value of the equity itself is negative in the current environment. If the tradeoff were to give up some guaranteed money for a
by lostdog 4y ago
The problem is that the expected value of the equity itself is negative in the current environment.
If the tradeoff were to give up some guaranteed money for a low shot at a big payoff, then that would be a reasonable tradeoff! But right now it's prohibitively expensive to exercise.
I'm surprised that YC doesn't lobby to fix the tax code so startup's can attract experienced people, but maybe YC is just about supporting founders, and there still enough employees willing to take a bad deal and work at an early stage startup.
- ska 4y agoI should have been clearer. I’m saying it is ok that the expected comp is lower. If the other things add up for you, it’s not necessarily a bad deal. (But it can be, you have to evaluate with clear eyes) Another way of thinking about this: developers aren’t really fungible , neither are roles.
- ska 4y agoFor clarity, although this is probably buried by now: I definitely think that if there is real upside at some point it should be shared with early employees, not just key senior hires later - and I push for this wherever I am. I just don't believe you can make this stick in a expectation-value sense. Certainly not rigorously.